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March 27, 2014, 11:10 a.m.

The newsonomics of NYT Now

The product is compelling and a big step forward for The New York Times in a number of ways. But can a $2-a-week iPhone app compete with the free and open web?

It’s an ambitious launch. Within it, we can hear many of the digital news buzzwords of the moment: mobile first, curation, paywall, native ads, voice. NYT Now debuts on April 2, side-stepping the foolish superstitions of a day earlier, and about five months after first disclosing its Paywalls 2.0 plans (“The newsonomics of The New York Times’ Paywalls 2.0”).

NYT Now’s timing seems right, and in my first testing of it, it offers reasons to believe it’ll get a lot of usage. But big questions loom as the final preparations for launch are made within the Times. The biggest, of course, is how many current non-subscribers will see enough value to pay. There are also questions about how NYT Now fits with the Times’ other native apps and mobile web experiences.

The positioning of the app shows the resurgent Times’ confidence, bolstered by the “They like us, they really like us!” success of the Times’ three-year-old digital subscription strategy. In fact, NYT Now can be seen in part as an Empire Strikes Back play: It aims to take readership back from Twitter and Facebook. It is an offensive move from a company — and an industry — that has seemed to be playing defense for so long.

“It’s the best Twitter feed I’ve ever seen,” one NYT Now tester told the team building the product, says Cliff Levy, the editor of NYT Now and a well-decorated and well-respected Timesman. That’s part of the idea: Take minutes of news usage back from Twitter and Facebook by offering a somewhat open but still corralled experience. NYT Now aims to take back that usage at the critical early-morning check-in times and later in the day, when data shows even news readers tend to migrate to social and games. How much of the world really wants a lassoing of content, bringing some finiteness to the infinity of news and opinion out there?

We know that Twitter faces its own issues of relevance, of user experience, and of how to help its users make sense of the madding digital world; just recently, the company acknowledged loss of minutes and new signups because it’s too complicated for many users. How NYT Now will try to bring simplicity to the complexity is the question. Let’s consider NYT Now in four quick parts: the product, its journalism, its user experience, and its business strategy.

The product

The product is straightforward. It’s mobile-only and, at launch, iPhone-only. On Android, the Times says, “We’re looking at it.” There’s no tablet or web access. As mobile usage surges past 50 percent in some parts of the day and week for the Times and other news companies, NYT Now aims to exploit the compulsive, near-OCD check-in behavior of 2014 life.

The app will be a standard, standalone iPhone app, not part of Apple’s Newsstand, where the Times’ core iOS app lives. Download the app and you get 10 free articles a month — the same way metered access works on the other Times’ digital products. The price is $2 a week or $8 for four weeks.


The journalism

The journalism is NYT Now’s foundation. Importantly, that journalism is both self-referential (which is what we’d expect  of the proud, sometimes haughty, news standard of the Times) and breaking new ground —  encompassing a wider world beyond the Times. So readers of NYT Now will get 30 to 50 Times stories in a given day, with stories appearing and being replaced throughout the 24-hour cycle. That’s roughly 10 to 15 percent of its total number of articles and blog posts it writes daily.

It’s an editor’s product, put together around the clock by an editorial staff of 15 to 20 (in addition to another dozen or so on the business side). Levy is modeling it on the success of New York Today, the blogging-from-the-five-boroughs section that he developed last spring and which has grown in reader (and publisher) appreciation over time. He and a growing staff have built NYT Now over nine months, starting with the idea of a “need-to-know” mobile product. Think of the content in three parts, each borrowed from New York Today:

  • Briefings: Adapted from the breezier, bloggier world of New York Today, NYT Now’s core personality is in the briefing. Friendly good mornings and good evenings greet readers and then offer a two- to three-paragraph take on “some of the things that caught our attention today.” Last evening’s: “Obama vs. Putin,” “The brothers Murdoch bounce back,” “It’s hard to be that bad,” (about the 76ers), “Rumors of North Korean hair rule may have follicle of truth,” “Pass the butter,” “‘Psych’ ends its eight-year run on USA Network” and “An energy drink cuts the caffeine.” There are no Mr. Putins and Mr. Obamas in the briefings. It’s the Times taking off its tie, and sharing. Expect Morning and Evening Briefings and Lunchtime and Midnight Reads — four segments a day, and each will flow into the relevant U.S. time zone; those of us on the west coast will no longer have to translate from Timesian ET.
  • Top News: A half-dozen or more top Times stories of the moment. Hard news, with “more news” and top opinion at the bottom of that page.
  • Our Picks: Finally, curation. The Times is acknowledging that there are indeed other worthy news providers out there, and here it picks out the stories it considers the best. Among the top brands noted: Wired, Reuters, Recode, CNBC, USA Today, The Guardian, Forbes — and even Nate Silver’s new post-Times FiveThirtyEight. Levy notes that the Times has been doing a bit of curation here and there, in its Science and Bits sections. And the Times’ Election 2012 iPhone app also pulled in non-Times stories that editors thought were important. But this is nonetheless a major leap. Levy puts it in cosmic terms: “There’s a tremendous collective intelligence in our newsrooms, but it’s only been internally focused” — meaning that journalists read a lot of stuff each day that others write, making judgments about what’s well done.

What is great aggregation or curation anyhow but great editing applied to deep knowledge. In Round 1 of Internet news, even the smartest newsrooms bottled up that value. NYT Now intends to harvest and monetize it. The eventual success or failure of NYT Now aside, the Times’ move into curation is long overdue and welcome. It’s about time that native journalistic smarts escaped their own four-walled newsrooms. The big question for a paid curation app: Does it offer enoughi curation to justify paying?

The user experience

It’s mobile first. Think Quartz, a mobile-first news leader, with more pictures and white space. It’s a long scroll, and meant for mobile snacking. It’s intuitive. Its three parts are easy to move between.

Regular New York Times subscribers will like NYT Now too. With the briefings and curation, in addition to the top news found on the Times’ own regular smartphone app, it may offer a more pleasing morning (and later) experience for subscribers. On the business level, that’s not an issue: Times subscribers get NYT Now access included in their subscription.

What I wonder about: How Times subscribers who prefer NYT Now for a quick morning reader will be able to move over to and within the fuller Times smartphone experience. The two experiences are related, but not completely synced up, as I currently understand it. On the core app, I can’t get to the breezy briefings or curation, though I can go as deep in Times content as I want. On NYT Now, I can get those, but then I have only access direct access — and view — of the limited number of Times stories on NYT Now at that moment, coming on and dropping off. (NYT Now-only subscribers will be able to read any and all NYT Now stories any time on the web; a green diamond next to a headline will indicate stories to which they have access).

Maybe that won’t be an issue, but on first use, it seems like a disconnect. If I were the Times, I’d be concerned about current subscribers feeling lost in transition. That should be a big point to ponder. As Cliff Levy shared with me, it’s Times subscribers who have disproportionately shown the love for NYT Now’s inspiration, New York Today. That New York Today experience, though, is seamlessly integrated within all the Times’ digital products.

What has worked about Paywalls 1.0 at the Times is great simplicity. You pay your money, and you get an all-access pass. All-access is a simple concept sweeping the newspaper, magazine, TV, and movie trades. Moves into product niches need to be tried, but complexity and confusion are the enemies of commercial success.

The business strategy

The Times’ strategy here is simple: “What would products look like for those willing to pay?” says David Perpich, the general manager of the Times’ New Digital Product Group and business head for NYT Now. The first answer is in, with the success of the full-access product. Now, the niching — Paywalls 2.0 — begins for the Times, and the rest of the news industry, which has followed the Times strongly and quickly into the paywall era.

Think of the segmentation as these three E’s:

  • Essential, which is NYT Now;
  • Extensive, to this point the only digital-only plans the Times has offered, and which have signed up 760,000 digital-only subscribers; home delivery subscribers are also considered to be in this segment;
  • Exclusive, the Times’ new “premier plan.”

Exclusive, which I first noted in November, has been priced. It’s the VIP level of Times subscription: $45 for every four weeks, which provides full-digital access to subscribers, in addition to the status benefits. That’s an additional $130 a year (or $10 for each four weeks) on top of the current all-access sub. Home delivery subscribers can also go premium, as of April 2, for the same $10 a week extra.

That’s a 28 percent increase on top of a Sunday print/digital sub or digital sub. That pricing parallels the Financial Times, which has pioneered the premium sub model. The FT charges 44 percent more for a “premium” sub than than a “standard” one. What self-respecting FT (or Times, or Wall Street Journal?) reader would be caught dead with a standard-issue subscription? We know that 33 percent of new subscribers preserve their self-respect by forking over the extra dollars, euros, or pounds for four added features.

The Times’ premium is for the influential and/or Times lover in the family: Times Insider for behind-the-scenes looks at the news sausage-making, videos of TimesTalks, Times ebooks, extra Times puzzles, and Times Store discounts. That’s the premium stuff. Premium is a nuanced upsell, as its benefits include two sharing features, which can essentially lower the price of shared subscriptions:

  • Family access: The ability to share their Times Premier account with two additional family members. Here, if we do the math, the Times is offering three subs for the prices of one. In its pre-premium, all-access plan, it has offered one additional family sub, or two in total. With a little planning and organization, consumers get a much better deal — and the Times locks in more everyday readers.
  • Gift subscriptions: The ability to give 12 weeks of Times digital access to up to three friends each year.

The pricing of the “essential” product, NYT Now, may be tricky. It’s only $2 a week, which gets you through-the-day reports plus a curated sense of what’s big news from elsewhere and the briefings. However, for $3.75 a week, you can get access to four or five times more New York Times content through its smartphone app — and full access to the on the web. So a side-by-side comparison may give buyers second thoughts. It’s more likely that Times strategy will be to put NYT Now front-and-center as the shiny new must-have thing, believing that comparison shopping won’t be of major consequence.

That comparative pricing is one place this strategy could go awry. There are others, and expect the Times to move quickly on its immediate experience. Perpich says user testing was deep, but involved fewer than 100 live users of the finished product. So real market data on usage and payment inclination will be hugely valuable as Times decides whether its research has oriented it correctly.

If the three E’s have it, the word to avoid starts with a C: cannibalization, as in NYT Now eating away at the Times’ own full-price digital subscriber base. The Times has examined three years of data on customer usage and interaction to figure not just which products they might pay for, but also the kinds of partial-content Times products that wouldn’t incentivize existing subscribers to downgrade — which would put a dent in that $150 million in new subscription revenue the paywall is pumping out annually. So NYT Now, the first of the three new niche paid products (food and opinion products will roll out this summer), is intended to satisfy, but not satiate, segments of readers.

How large might the NYT Now segment be? There is undoubtedly a vast potential audience that could appreciate a Times fast-read view of the world, but it’s a group that may be tough to get to pay. Two bucks a week isn’t much. But at that price, NYT Now isn’t competing against other $2 products. It’s competing against the enormous freely available web.

This first niche product is aimed at Americans. While more than 10 percent of the Times’ digital-only subscriptions come from outside the U.S., Perpich says, NYT Now is targeted for Americans across those four continental time zones. My sense: If a low-price, fast-read, original-and-curated product works, it could readily be tailored for Brazilian, Chinese, Indian, and Middle East markets.

Finally, NYT Now serves as the Times first home for mobile native ads, which it is calling Paid Posts. The Times may not be a leader here — in native ads, curation, mobile first, and the like — but it is becoming a faster follower.

POSTED     March 27, 2014, 11:10 a.m.
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