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March 17, 2011, 4:11 p.m.

“Please stop calling it a wall”: First thoughts on the Times’ pay plan

Editor’s Note: Now that we know the details of The New York Times’ long-awaited paywall plan, what’s the reaction to it? We asked some of our favorite media thinkers — including, of course, some of those who made predictions about the success of the paywall this December — to weigh in on the model’s pricing, packaging, and more. (Also asked: Are you going to subscribe?) 

Here are reactions from Steven Brill, Steve Buttry, David Cohn, Anil Dash, Jason Fry, Dan Kennedy, Martin Langeveld, Megan McCarthy, Geneva Overholser, Jonathan Stray, and Amy Webb. And please do share your own thoughts and reactions, as well.

Steven Brill, long-time journalism entrepreneur and cofounder, Journalism Online

I think it makes a lot of sense. My guess (actually not a guess because it is based on calculations using data from our Affiliates) is that this will produce about $100 million in annual revenue for the Times before too long. Plus, as Arthur [Sulzburger] rightly emphasizes, this will sustain the Times business model over the long term by eliminating the completely free alternative to its print product, while drawing in a global audience of now-paying digital readers. All in all, a smart, well-thought-out plan.

My only quibble is our data from our Affiliates’ experiences so far shows that it makes sense to give print subscribers a generous discount, but to charge them something, too. Our data shows that if, for example, the Times charged, say, $3.00 a month to print subscribers, they would actually get more sign-ups, or at least as many, as they will get offering it for free.

I think the packages make sense. My only worry is that the details may be a bit too complicated.

Yes, I’ll subscribe. More important, I bet my kids — in their twenties — will subscribe. But please stop calling it a wall. It’s not a wall. It’s a smart, flexible strategy that will produce a perfect blend of reader and advertising revenue. Walls turn people away and force a publisher to choose between advertising revenue and circulation revenue. This does neither.

Steve Buttry, director of community engagement, TBD

In answer to your “will I subscribe?” question: Ha! I know how to use Twitter and Google. Why should I subscribe?

I think the Times approach is ridiculous on multiple levels:

The Times already tried a paywall recently with TimesSelect (which I thought had a chance at working because of the high-value content involved). The Times knows paywalls don’t work. TimesSelect didn’t fail because they didn’t have the details right. TimesSelect failed because paywalls generally are stupid, as this one is.

This can’t possibly generate significant revenue. Because they don’t want to cut into web traffic (and thus web advertising), they have structured this to apply to a small segment of their online audience (people who who read more than 20 pieces a month who don’t subscribe to the print edition and don’t find them through search or social media). This will be a trickle of revenue, not worth the time they spent developing the plan.

This punishes their most loyal readers for their loyalty: If you really like us and keep on coming back, we’ll make you pay. The hit-and-run Times readers can read for free without ever being bothered. What the hell kind of business model is that?

Anyone who follows @nytimes can just click on every headline all day (one screen only goes back 10 hours right now) and read for free. Anyone can click five times per day from Google (that’s 150 stories a month) for free. This subscription is entirely voluntary. People who don’t want to pay can get out of paying with ease.

If it is voluntary, wouldn’t it be better to just ask for donations, like the Miami Herald did? You might get some donations from people who will be pissed off when they hit the paywall and from some people who will dance easily around the paywall.

My friend and former boss Jim Brady says that you can’t build a business model based on what people should do (and newspaper people believe in their bones that people should pay for their content). You build a business model based on what people will do. This tortured maze of exceptions and trigger points is a laughable effort to collect because people should pay but to find a way not to lose the people who won’t pay.

But here’s my primary criticism of the Times paywall: The New York Times had a lot of smart people waste a lot of time that should have been spent productively on a forward-looking approach. The Times could make a serious approach at a membership program that could generate some serious revenue by providing benefits beyond content (or perhaps including some high-value special content), as suggested by Steve Outing. The Times could become a leader in direct sales for customers or some other creative revenue approach that isn’t trying to cling to the subscription model of print. And every bit of corporate energy, time and creativity that has gone into this feeble plan is a diversion from the energy, time and creativity that genuine innovation require.

I am disappointed but not surprised that such an important news organization has wasted so much of its resources on a plan that won’t work.

I think this is a bold move by the Times. Anytime an organization of their size tries something new, it’s a good thing. I’d much rather see the Times try something and learn from it then sit on their hands and complain. That’s why I actually was happy to see the Dallas Morning News and their more traditional conception of the paywall, and am interested in seeing what happens with Murdoch’s paywalls.

I am less optimistic of the success of a hard paywall, but I am happy to see honest attempts at it. So note — there is a distinction between me encouraging an experiment and whether or not I think the experiment will succeed. One doesn’t necessarily require the other.

As for the Times paywall. First — it’s somewhat inaccurate to call it that. It feels more like a pay-ramp.

The NYT pay-ramp is a bit like that scene in Star Wars when Luke Skywalker has to shoot a photon beam into the Death Star — but the margin of error is really small. There is a mark to hit, but it’s 1 meter by 1 meter. Except in this situation, if the Times hits it, the Death Star won’t blow up, it will just create some nice revenue.

The next question is: If it does work and create some revenue (but again, I suspect it won’t be a game-changing amount of revenue), will it be something that other organizations duplicate? We won’t even start to ask that question until after the Times gives this a try, and that’s why I think it’s a positive development overall for this to take place.

Anil Dash, co-founder, Activate, and founding director, Expert Labs

While much of the focus is on the pricing and terms of the new paywall, one of the things that’s probably underestimated is how much the success of the effort depends on the user experience. It’s incredibly hard to understand a model that lets you read 20 stories a month, unless you’re coming from Google, where it’s 150 stories a month, but only 5 per day, unless you’ve paid $15 or $20 or $35 a month, except if you already pay for the print paper, but only if you’re in Canada, until it comes to the United States.

The usual industry angle on these things is to debate whether anyone is willing to pay, or what the price point is, or how it will affect competition. But as much as people point to the success of paid media like iTunes, they forget the key lesson of an average consumer being able to understand that a single song costs $0.99. What do I get from The New York Times for $0.99? Or for $99? I don’t really know, and I don’t know how long it will last. And if as a reader I can’t understand that simple transaction, and can’t anticipate how it affects my behavior of searching, reading, and sharing stories, then I might respond to the whole initiative by just throwing up my hands and going somewhere else.

Any news organization contemplating paid access faces at least two problems that afflict the industry as a whole: unfortunate vocabulary and outsized expectations.

First up, the industry ought to have a contest for a term to replace “paywall,” because it’s a self-defeating word for what organizations are trying to do. I’ve been thinking about this for a while, but a NYT reader’s comment on the announcement brought it home: “I am sorry to say that I will no longer be able to read the NYTimes online.” But she will! She can read 20 articles per month, and if she maxes that out she can read five a day through Google, or as many as she wants through Facebook, Twitter, or blogs. That’s quite a lot for free. What the “metered model” (a terrible term in its own right) really does is define who a publication’s most-loyal readers are and try to convert them to paid supporters. It’s more like a narrowcasted pledge drive than a paywall. If paid access were framed in those terms, I think there’d be fewer misapprehensions like the commenter’s and more support among loyalists.

But this gets us to my second point, about expectations. By their nature, paid-access approaches like this one are likely to yield relatively small returns. Even if they’re very successful in converting loyalists, they’re fishing in an awfully small pond — one that’s wisely chosen but far too small to sustain newsgathering operations of the size and scope seen in print’s heyday. The traditional newspaper industry is going to get a lot smaller even if approaches such as this one work. Pretending otherwise ensures that all paid-access approaches will be judged against something they can’t compete with, and will be seen as failures.

As for the actual plan: I think it’s too restrictive in some areas and too loose in others. Having a different cost scale based on device strikes me as a short-term approach that flies in the face of where our changing digital habits will lead us — the idea that people will pay extra for different experiences as delivered by different devices is worth exploring, but asking them to pay extra for the same information displayed in a different form factor won’t work in the long run. On the flip side, I think free access for all home-delivery subscribers is too timid — I’d gladly pay for the Times in digital form, but I don’t have to because I have Saturday/Sunday home delivery. By ignoring bundles of print twice a week, I actually save money on what I’d pay for full digital access. We should remember that this is the beginning of the Times’ strategy, not its finished form, but if they were asking me, I’d suggest looking at those two parts again.

Dan Kennedy, assistant professor of journalism, Northeastern University

The New York Times is taking a smart and nuanced approach. Times executives have struck an interesting balance between charging heavy users for access while remaining part of the free online conversation that’s become such an important part of the media ecosystem. I have no idea whether a limit of 20 free articles a month is too little, too much or just right, but I assume they’ll adjust in response to what the market tells them.

I was also pleased to see that print subscribers, including Sunday-only customers (like our family), will have free access to most of the Times’ online platforms. The Sunday paper remains a vital source of revenue for the Times, and it makes sense for Arthur Sulzberger, Janet Robinson and company to do whatever they can to preserve that money machine.

That said, the Times will no longer be able to make excuses for glitchy software and access problems. I’m reasonably happy with the Times iPhone app, but my wife reads the Times on her iPad, and it’s buggy. You can get away with that when it’s free. But once you put a price tag on your product, you’ve got to guarantee that it works — and be responsive to consumer complaints when it doesn’t. That’s especially true given that the Times is charging more for electronic access than many had predicted.

The news business may be watching this very closely to see what lessons can be drawn, but I’m not sure that there will be many, because the Times is such a unique product. For many people, the Times may be the one “newspaper” for which they’re willing to pay to read online. Rather than paving the way for other newspapers, the Times’ paywall may instead lead to a further stratification of the news business, as executives at other papers find themselves unable to emulate the Times’ success in persuading customers to pay for electronic access.

Martin Langeveld, executive vice president, CircLabs

This is a very porous paywall. It is as if the Red Sox sold season tickets for top dollar, but let in hordes of spectators for free — not only through a few loose planks on the outfield wall, but through many advertised, clearly marked free admission entrances. At the Times, to start with you have 20 free articles a month on the website, but beyond that you’ll be able to get Times content for free through Google (with a daily limit) and through Facebook and Twitter recommendations. You’ll be able to read all the top news for free on the iPhone app, without limit. The homepage will remain free, as will section fronts. And of course print subscribers get it all for free. I can understand all this; each of the loopholes makes sense. But when you add it all together, it looks like a confusing mess to consumers. The question they ask will be: “Everybody else seems to be able to read it for free, so why can’t I?” In the end, I think the Times will start to close the gaps in the wall, one by one, to arrive at a more consistent, and fair, pricing scheme.

I think the New York Times’s paywall is short-sighted and doomed. If they want to make the Times more valuable, they need to focus on changing their model of digital advertising to be as profitable as their print side. The Times has the clout to help Madison Avenue realize the value of online advertising. I’m not sure why they’d rather deal with the intricacies of custom subscriptions and meters instead of charging brands and agencies which hold much more money and can get much more value (exposure) from the Times in return.

In the end, I think the only people who will make money off of the Times’s paywall will be developers who code up a workaround and the lawyers hired to go after them. If the leadership of the New York Times actually thinks they can make their business more profitable while encouraging people to consume their information through means they can’t control (Twitter, Google, etc.), then the Times is in worse trouble than they appear.

The paper’s own story pretty much says it all.  Many say it won’t work; they may well be right. But surely journalism needs financial support. This seems an informed attempt. May the Times thrive, and may we all learn from it. As they say: There is no solution, seek it lovingly.

Jonathan Stray, interactive technology editor, Associated Press

We finally have some numbers to plug into the Paywall monthly revenue calculator. By default, that calculator uses a breakdown of the Times’ audience and effective ad rates that I estimated from public sources a year ago, so things may have shifted some. But doing the simplest possible experiment, I plugged in the Times’ 20 free page views per month and $20 per month subscription for the web/iPad combo. The calculator tells me that 38% of the most avid Times readers — those who visit the site several times per day — need to subscribe before the gain in subscription revenue offsets the loss in advertising revenue. That’s a much higher conversion rate than we’ve seen in any paywall to date (compare vs. Newsday, Times of London.)

Of course, this figure is wrong. The estimates it is based on are a year out of date, some people will purchase the cheaper $15 web only package or the $35 web-mobile-tablet offering, and the paywall may prevent erosion of print subscriptions. But if the revenue figures coming out of the current calculator are within, say, a factor of two of the actual economics, then I suspect the conclusion I came to last year still holds: this paywall will not change the revenue situation of the Times in any earth-shaking way. What it might do is collect credit card numbers from some fraction of the audience, which paves the way for other paid strategies.

Amy Webb, digital media consultant, Webbmedia Group

The NYT paywall is a long time coming. I do not believe that content should be free just because it’s digital. It takes time and effort to produce quality journalism, and simple logic would dictate that those involved in the serious production of online content ought to be compensated for their work. Frankly, I’m surprised it’s taken so many years to do what publishers should have instituted from the beginning.

The NYT has made a wise move in offering different subscription packages (vs one flat rate). And they’ve bundled packages by actual consumer use instead of using the traditional reader buckets (paper only, web only). Offering 20 premium stories for free each month enables casual readers to use the site, while power users will need a subscription. It may not be as cheap as other sites ($20 a month for the site and tablet access, for example), but the volume and quality of content isn’t really comparable to most other news sites. Now, here’s the rub. I agree with the paywall and the pricing strategy, but those readers who elect to pay a premium will likely tire of the obtrusive ads and what I sense will be a cumbersome registration system. At some point, the Times will need to address advertiser/sponsor messaging and access to subscribers.

POSTED     March 17, 2011, 4:11 p.m.
PART OF A SERIES     The New York Times’ new paywall
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