Thursday, January 21, 2010

New York Times to begin charging for content in 2011

Rupert Murdoch has been talking about it for a while now, but it appears that the New York Times will be the first of the major mainstream newspapers to begin charging for access to its content.

Niche publications such as the Wall Street Journal and in Australia The AFR have been using a pay system for a few years now with mixed results - certainly for the AFR which has long suffered from a poorly designed site.

It will be interesting to see how this plays out locally and if it is a system we are willing to accept for our daily newspapers or if it will be limited to the more business focused or niche publications.

NYT Confirms Pay-for-Online-Content Plans
Source: MediaPlannerBuyer - Published on January 19, 2010

The New York Times has confirmed that it will put a pay wall into place for its online content, allowing users to access a certain number of free articles per month but then charging for access beyond that.
The system will launch in early 2011; the newspaper did not offer any more details, such as how much access to the site will cost or how many free articles users will be able to access, writes The New York Times.

The New York Times is the nation’s most popular newspaper site in the country, pulling more than 17 million readers a month in the U.S., per Nielsen Online. Analysts also say the paper is tops in ad revenue.

Other Papers’ Approach to Pay Walls
Newspapers are increasingly considering making content available only for a fee. The Wall Street Journal has long charged for content, as has the Financial Times. Last year, News Corp chief Rupert Murdoch said all of the company’s newspapers would begin charging for content by spring, though he later said that that deadline might not be met. At least one of the company’s publications, The Times, is expected to meet that deadline.

The Times will charge a fee for 24-hour access to the paper’s website; readers will also be able to purchase subscriptions. Micropayment options for purchasing individual articles will not be offered.
Newsday has also erected a paywall, charging $5 a week for access to its website. The company hopes the subscription web service will help boost newspaper subscriptions.

MediaNews Group, publisher of 54 daily newspapers including The Denver Post and the Detroit News, is another company planning to charge a fee for its newspaper content online.

Risky Business
From 2005 to 2007, The New York Times charged $49.95 a year for access to editorials and columnists. The service attracted 210,000 subscribers, but the paper scrapped the model hoping the resulting boost in traffic would help boost advertising revenue. While traffic did jump, and ad revenue rose, the increase was not enough, and the paper lost $35 million in the third quarter of 2009, writes The Atlantic.

The move to a pay model is a risky one for any newspaper, and perhaps particularly for The New York Times because of its position as the top newspaper site in the country. The paper took months of discussions before the decision was made. As NYT digital chief Martin Nisenholtz pointed out, “At the end of the day, if we don’t get this right, a lot of money falls out of the system.”

With the move, the newspaper hopes to build a strong source of revenue through subscriptions, while still selling significant amounts of advertising.

Newspapers Believe Readers Will Pay
A recent study conducted by industry consultants Greg Harmon and Greg Swanson for the American Press Institute indicated that more than half of newspaper publishers believe readers will pay to access online newspaper content. 51% of publishers say they believe they can successfully charge for content, while 49% either aren’t sure or believe paying for content will not work.

68% of publishers said they thought that, even if readers object to paying for content, they would have a difficult time finding that information in other places, while 52% said they thought it would be either very easy or somewhat easy for readers to find replacement content.

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