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The great paywall debate: Will The New York Times’ new model work?

Editor’s Note: We’re wrapping up 2010 by asking some of the smartest people in journalism what the new year will bring.

Many of their predictions centered on what may be the most anticipated business-model shift of 2011: The New York Times’ shift to charging for full access to NYTimes.com next month. We found voices on both sides of the “will it work” debate. Here are Markos Moulitsas, Megan McCarthy, C.W. Anderson, Paddy Hirsch, Jason Fry, Nikki Usher, and Barry Sussman on how they see the metered model shaking out.

Prediction for 2011: The building up — and subsequent tearing down — of online paywalls for general news sites. The New York Times are planning to implement their paywall in January and I predict it will be modified enough — either by the Times themselves or outside developers — to be rendered irrelevant by March.

C.W. Anderson, assistant professor of media culture, CUNY

Faced with a massive migration of regular readers to the Guardian and the BBC, The New York Times will abandon its recently enacted paywall.

Now, since The New York Times “porous” paywall won’t even go into effect until early 2011, it’s possible the so-called “wall” will still be active as 2011 draws to a close. But the decision to ditch it will have already been made internally. The wall won’t affect many readers, but it will impact the obsessive news junkies, the people who want to trawl every WikiLeaks cable and parse every detail about the inner workings of the U.S. State Department. Where will these folks go? Will they pay up? Of course not — they’ll simply click over to the Guardian and the BBC, two websites that fit nicely into the demographic niche currently occupied by the Times. Links to the Times will dry up (despite the paywall’s porousness). The egos at 620 Eighth Avenue wont be able to handle the shift in the center of the news conversation across the ocean, and there will be more and more exemptions made to the types of online content that counts towards the meter. Columns will be first to go. The paywall won’t ever make or lose much money, but the real impact will be cultural and organizational — suddenly the Times won’t be the most important news institution in the minds of the American public. Finally, the whole thing will be quietly shelved.

Secondary prediction: The paywall won’t ever be launched, and the leaders of New York Times Co. will admit it was all hatched out in a moment of online madness that swept the industry in late 2009.

The New York Times’ switch to some sort of online pay-to-read system will be a financial success right off the bat — even a windfall for the Times.

Paddy Hirsch, senior editor, public radio’s Marketplace

While news outlets that are hewing to the pay-to-read model will persist in charging readers, the trend will continue to move against them. More and more content will be offered for “free” to consumers as distribution platforms continue to proliferate. Inevitably, this will erode the pay-model outlets’ readerships, and we’ll eventually start to see capitulation by all except the most “niche” journalism organizations, such as trade magazines.

Paywalls will succeed — to a point. The Times and other papers will have success with payment plans that hew to the metered model practiced by the Financial Times, Journalism Online [which owns Press+], and others. But this success will be limited: It will be effective in getting papers’ most loyal customers to pay, but that percentage of customers will be so small that such efforts will be largely seen as failures. We’ll still be talking about analog dollars and digital dimes and bemoaning the lack of a silver bullet. The subscription debate will have moved away from absolutist dogma to a more nuanced view, which will be good, but the level of frustration will remain high and contribute to a lot of noise in conversations.

Markos Moulitsas, founder and publisher, Daily Kos

The NY Times effort to implement a paywall won’t survive the end of the year.

The NYT paywall (with a few bumps and starts) may be the dawn of a new era for national news organizations, but it may be impossible to generalize to other, smaller, and more local news organizations. [Usher does some of her research on the Times, but notes that she has no insider knowledge on this one. —Ed.]

                                   
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  • http://thaiparampil paul joseph

    its the cheap greediness of top people in the newspaper industry…it should be defeated…its worse than enron or berlin wall….

  • http://jonathanstray.com Jonathan Stray

    My prediction: the NYT paywall won’t be a success on the web. But the Times will offer an integrated, cross-platform subscription package — paper, tablet, mobile, web — that could be a hit. Most people will still get their news from Yahoo, as they do now.

  • http://techinq.com kim kay

    I don’t know if the NYT paywall will succeed in it’s original state or not but one thing is for sure, paywalls are not going away and one way or another, they are here to stay, I just hope they could be something to encourage me to pay instead of just paying for access…

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  • http://culturalengineer.blogspot.com Tom Crowl

    RE Paywalls, the Commons and Scaling the Peer-to-Peer relationship:

    The first ICT was perhaps a bird call constructed out of a leaf made by a hunter to notify his mates of where the prey was…

    And the first journalism was Ooga running into camp and announcing she’d just seen the first spring sprout on a favorite berry bush.

    There was no gatekeeper, no intermediary… ICT AND JOURNALISM were BOTH strictly peer-to-peer.

    The same could be said for politics and charity within the hunter-gatherer world… peer-to-peer.

    The commercial transaction (and the creation of money, trade tokens, etc) arose with the need for interaction between larger or multiple ‘social organisms’… an important and needed development.

    I’m not going to write some long essay here but the bottom line is that transactions involving “Commons-oriented” functions… politics, charity, speech/journalism… dovetail in ways that suggest that solutions geared to those specific “Commons-oriented” functions will benefit by dedicated mechanisms designed for that purpose.

    Further a simple, secure and ECONOMICALLY VIABLE microtransaction must be enabled in this area through a Commons-owned entity or entities.

    HOW the Web evolves… how WE determine its evolution is critical for the future of civilization.

    There are NO issues more important than those revolving around the development… the evolution of this new LANDSCAPE.

    And that’s vital to remember. We are constructing a landscape which then shapes everything that comes after it… and is built upon it.

    Its more akin to the air, water and sunshine than it is to the invention of the printing press.

    And it may well be the first human created artifact to assume that level of evolutionary importance.

    THE DEVELOPMENT OF THE WEB IS THE MOST FUNDAMENTAL CHANGE IN PEER-TO-PEER RELATIONSHIP SINCE THE MOVE TO SETTLED EXISTENCE!

    The Commons-dedicated Account Network:
    A self-supporting , Commons-owned neutral network of accounts for both political and charitable monetary contribution… which for fundamental reasons of scale must allow a viable micro-transaction (think x-box points for action in the Commons).

    (I note that journalism is often a for-profit enterprise and that this presents a complicating factor. I believe this is an addressable issue.)

    I believe the development of such peer-to-peer structure(s) is inevitable. And I believe it will naturally concentrate. Hence I’d suggest that both its Terms of Service and the design for its governance under a commons-ownership are vitally important. There are both pitfalls and opportunities in such a structure that bear attention.

    BOTTOM LINE: With respect I believe the paywall issue is being viewed from the wrong end… it’s not about the NYT’s model or any other at that end of the relationship… Its about building the model for the reader’s participation that then ALL publishers can access.

    Patent review complete and approved for issuance upon payment of fees. Well, fees are paid (sold my car, house already foreclosed upon and through bankruptcy… its going to make a hell of a movie). I understand issuance and publication will take place within weeks.

    Anybody interested in USEFUL financial innovation coming out of Harvard? I’d love some helpful associations, participation and advice… and naturally food and shelter are needed for clear thinking.

    I admire many of you guys but your business school’s reputation has gotten a bit shaky.

    Re-Igniting the Enlightenment: On Building Landscapes for Decision
    http://culturalengineer.blogspot.com/2010/12/re-igniting-enlightenment-on-building.html

    Why Politics MUST be Localized
    http://culturalengineer.blogspot.com/2010/10/why-politics-must-be-localized.html

    On Creating Communities (Part 1)
    http://culturalengineer.blogspot.com/2009/08/on-creating-communities-part-1.html

    On Social Energy, Enterprise and Expanding the Technology of Money
    http://culturalengineer.blogspot.com/2010/01/on-social-energy-enterprise-expanding.html

    LinkedIn http://www.linkedin.com/in/culturalengineer

    P.S. I’m coming out of nowhere I know but pleased to see blog readership growing despite infrequent posts… especially from so many other countries. But let me know if I’m an idiot so I can stop this and start looking for a job at WalMart.

  • Barry Hollander

    God forbid people should pay for the news they consume. The paywall is a necessary experiment. Successful? Unfortunately, probably not. I suppose people expect journalists to work for free.

  • TRK113

    The paywall needs to survive if The NYT is going to survive. But, it probably won’t. The Times did themselves no favors by charging as much as they are. If they were to start at a nominal fee, like $15 per month, they wouldn’t bleed readers like they will at the current pricing structure.
    They’re charging as much as it they do for the physical paper which is crazy. It costs a great deal more to get the paper to your doorstep or to the newsstand than it does to post it online. It would be hugely profitable, but it will blow up in their face and cause them to abandon it altogether.
    Personally, I will wait and see. I signed up for the paid service about ten years ago and feel like a sucker for having done so.

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  • Tom

    Actually, it costs *less* to deliver the newspaper than the electronic edition — because the revenue brought in by print advertisements exceeds the printing and distribution costs of the physical product.

    Compared to print advertisements, online advertisements deliver nickels on the dollar.

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  • http://teleshuttle.com/FairPay Richard Reisman

    The Times might have better success with their pay wall if they combine it with a radically new pricing model called FairPay that is far more flexible and reader-friendly. FairPay develops
    a buyer reputation for payment, based on Internet feedback, to go beyond pay walls and “freemium,” to an adaptive hybrid of free and paid content.

    How FairPay works:
    1. Selectively offer to let the reader set any price he considers fair after each month of
    subscription (Pay What You Want, post-sale).
    2. Let the publisher track that price and use that information to determine whether to make
    further offers of that kind (FairPay gated renewals) to that buyer in the future.

    More about FairPay is at http://www.teleshuttle.com/FairPay/.

    A blog post specific to The Times is at http://www.fairpayzone.com/2010/06/fairpay-for-timesfor-journalismonline.html.

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  • Jeremy Mott

    As a subscriber to The New York Times, I’m glad that The Times is establishing a paywall. It doesn’t make sense to expect the print subscribers to subsidize the free-riders online.

    The outcry that has already PRECEDED the paywall proves the value of Times reporting. It doesn’t seem rational to argue that “You can’t take away the free Times content from me!” and then say, “If you do, I’ll go elsewhere!” Why haven’t those free-riders left already? What’s wrong with those free alternatives?

    Apparently, The Times offers something unique. I think it will be interesting to see if the free-riders can actually live without The Times. Cable TV isn’t free; magazines aren’t free; music isn’t free — at least not the worthwhile stuff.

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  • Sandra Loughlin

    The phrase “analog dollars and digital dimes” is exactly right from the point of view of changes in readership behavior — in addition to advertising revenue to which it originally refers.

    In the print world people tend to have one or maybe two newspaper they read and the annual subscription cost tends to be high, often $500+/year for each paper. People usu. read them in depth because that’s what they’ve got in front of them. But I think (without specific research to back this up) that when readers get used to finding sources online their reading behavior changes. Online readers have the ability to sample many sources, though still perhaps favoring one local and one national/regional paper. If a reader is accessing a dozen or more sources in a month, then clearly they aren’t going to pay at the print rate, even as they acknowledge that they should be paying something.

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