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Why The NY Times Paywall Business Model Is Doomed to Fail (Numbers)

from the dude-where's-my-math dept

Not considering technical details (every wall can be brought down), even by its own business model the New York Times' paywall is doomed to fail.

Last Friday's Financial Times had some interesting numbers.

  • Fact 1: According to analysts, the New York Times only needs to convert 1 to 10 per cent of the online visitors in order for the model to pay off.
  • Fact 2: NY Times chief executive Janet Robinson has stated that they only expect about 15 per cent of visitors to encounter the paywall, since visitors can read 20 articles per month for free.
  • Fact 3: Full website access and the mobile app are bundled for $15 per month. For the iPad app + web you pay $20 per month. $35 for all three.
  • Fact 4: One analyst argues that the NY Times could earn $66m per year if it converted just 1 per cent of the visitors. This would mean they go from paying nothing, to paying (at least) $195 a year.

There is no way these numbers add up. Consider fact 1 and fact 2. First of all only 1 per cent might actually not be all that easy, let alone 10 per cent. Secondly, the 1 per cent is misleading, as they'll actually have to convert 1 to 10 out of every 15 visitors to encounter the paywall. So they actually have to convert 6 to 66 (!) per cent.

Next, the pricing might be too high. $15 per month is a lot for consumers who are not used to pay for news online, especially since there's no additional value as Mike commented last week. I'm not saying nobody will pay, but dragging in the 6 to 66 per cent of the visitors will be challenging, to say the least.

I cannot imagine this paywall to be successful. They can probably kiss the $40m investment in the development goodbye.



Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    bob, Mar 22nd, 2011 @ 4:32am

    Too expensive?

    Let's start off by comparing the NY Times to the sleezeballs who are bastardizing the once wonderful USENET groups:

    Astraweb: $11/month
    Megaupload: 10 euro/month
    Giganews: $5-25/month ($5 is very limited.)
    Supernews: $10/month

    Sounds like the NYT is in the same basic range as these services. Of course you get a completely different collection of bits but the real difference is that the NYT actually pays the writers and editors unlike the mooching scum at the USENET services.

    Hey Mike, here are two article topics for you:

    * The USENET services "don't get it". They're trying to put up a paywall and it will fail because the only thing that's cool on the Net are free things that Google can sell ads against.

    * The USENET services are promising "unlimited" without actually delivering because nothing is unlimited. They're just like everyone selling bandwidth and not delivering it. It's so uncool how they meter and throttle the free pipes just to get us to pay for what we should get for free.

    So get to work.

     

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  2.  
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    Anonymous Coward, Mar 22nd, 2011 @ 4:49am

    FT paywall

    I can't read the FT article because of their paywall!

    Do you have another link?

     

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  3.  
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    Bas Grasmayer (profile), Mar 22nd, 2011 @ 4:56am

    Re: FT paywall

    Nope, sorry. I read it in the paper version of their newspaper.

    Anyway, I'm not sure if it's a paywall or just a 'login wall'. Annoying and ironic.

     

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  4.  
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    Anonymous Coward, Mar 22nd, 2011 @ 5:10am

    The more I read about this the more I think it's a conspiracy. The CEO must be sitting up in his tower wearing a tin foil beanie watching old Bond movies plotting world domination. This whole thing is so over the top and unlikely that only an 1980's super villian could come up with such an unlikely plan.

    I'm still waiting for the subliminal messages in the background images to be found: "submit and subscribe, you must pay"....

     

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  5.  
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    Bas Grasmayer (profile), Mar 22nd, 2011 @ 5:13am

    Re:

    Haha. Maybe he took "I shall make them pay for this!" too literally. ;-)

     

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    Sneeje (profile), Mar 22nd, 2011 @ 5:27am

    Way too simple an analysis

    I generally agree that they are overly optimistic about those that will decide to pay given the value degradation, however, I think this is waay too simple an analysis to support the rather dramatic conclusion.

    It seems ludicrous that people will go from $0 to $195, yes, but what evidence do we have that generally doesn't work? There are lots of things that are generally accepted that aren't true when you dig (pirated copy = lost sale anyone?).

     

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  7.  
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    Anonymous Coward, Mar 22nd, 2011 @ 5:29am

    I just love business plans that start with, "Dudes, if we only convert 1% of (population X), we'd be like, totally rich!"

     

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  8.  
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    Khstapp, Mar 22nd, 2011 @ 5:30am

    Times to change paper subscription pricing

    The Times announced updates to the subscription price of its print copy.  Readers who wish to turn the pages of the Times with their right hand will pay $1 per copy whereas left handed use will cost $1.25.  Readers can use either hand for $1.50 a copy.  If you carry your copy of the Times folded under your arm with the front page facing outward you will be charged an additional $.25 a copy in case a passerby reads the headline.  There is no carrying charge if you carry your copy hidden from prying eyes in your briefcase or backpack. For an additional $2 a month you will receive a 'clipping' license which allows you to cut out up to 10 articles per month to share with friends and relatives.  Print subscribers can share an unlimited number of clippings with other Times print subscribers.  Finally, for an addition $1 per month subscribers can purchase a 'pet rider' which allows you to line litter boxes and birdcages with used (at least 5 days old) copies of the Times.

     

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  9.  
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    Anonymous Coward, Mar 22nd, 2011 @ 5:32am

    Also, the math in the article ignores the guilt based conversion (GBC) rate. It is assumed to be 0 in Bas's write up, but >0 in NY Times analysis. You don't have to hit the pay wall to decide to pay!

     

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    AC, Mar 22nd, 2011 @ 5:40am

    Re: Times to change paper subscription pricing

    This is an excellent parody of their stupid paywall.

    Loved it! :)

     

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    Bas Grasmayer (profile), Mar 22nd, 2011 @ 5:46am

    Re:

    True. Although the difficulty with that is that people who are subscribing to the print version already get access.

    Anyway, I figured the 6 to 66% margin left enough room to factor that in. I don't expect GBC to be high when no extra value is offered. People simply don't get offered a 'reason to buy'.

    My main point was just in showing that they really didn't think this paywall through very well and unless they get lucky, they'll have a lot of trouble making it work.

     

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    Josef Anvil (profile), Mar 22nd, 2011 @ 5:48am

    Different perspective...

    I guess if you look closely at Fact #2, then the pay wall actually makes some sense. The NYT only expects that 15% of their visitors will encounter the paywall. That's fairly important.

    If they can actually convert 6% of those visitors to paying customers then they project they can make a profit ( or call it a success). Regardless of whether they hit their goal or not, the site is still bringing in ad revenue and they are only taking the risk of offending a small percentage of their traffic with the pay wall.

    Allowing free views from sites that link to their articles may dilute the traffic to the site to some degree, but it will remain to be seen if that loss of views is enough to seriously harm the business model. Based solely on FACT 2, it appears that they are just phishing for money from a small percentage of their visitors and have a decent chance of making their numbers.

    Saying that the business model is doomed may be correct in the long term, but in the short term it looks like it could work until enough of their legacy customers realize that they are being taken for a ride.

     

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    Bas Grasmayer (profile), Mar 22nd, 2011 @ 5:53am

    Re: Different perspective...

    Actually, about that 6%... The profit-line will lie somewhere between 6 and 66%. So just converting 6% (which isn't easy given all the competition + no real added value behind paywall) might be tough by itself.

    I realize you're just looking at fact 2 and I love your analysis, but if you're going to talk conversion rates, you need to take the projection from fact 1 into consideration. :)

     

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  14.  
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    Adam, Mar 22nd, 2011 @ 6:00am

    Dont count the NYTs out

    The fact that so many "new" media outlets are declaring the doom of this paywall makes me suspicious. Don't underestimate the loyalty of NY Times readers. This is not a feature they're marketing to the super-young who demand everything for free, but the long-time readers (many of them older) who are embracing iPads/iPhones and are definitely willing to pay for the luxury.

    Just the fact that it's the Times (and not some third rate paper) that's doing this means its got a chance.

     

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    Anonymous Coward, Mar 22nd, 2011 @ 6:09am

    Re: Way too simple an analysis

    "It seems ludicrous that people will go from $0 to $195, yes, but what evidence do we have that generally doesn't work? There are lots of things that are generally accepted that aren't true when you dig (pirated copy = lost sale anyone?)."

    I can't tell if you're answering your own question there or trying to make some counter point. Yes, piracy is the evidence that people are not willing to pay for content they previously had access to for free.

    Much like before the digital age, if you wanted a song you had a friend make you a tape of it, or a mix tape of a bunch of songs you liked - or just borrowed their tape(s) (similar to VHS). Now that the physical attribute of storage has been converted to a much more easily sharable form it's only natural it be adopted.

    The problem is this company was based off a subscription service and they wish to continue this avenue for social media. They fail to realize that people are no longer willing to pay for social media because mostly if one person has it, a million others will as well. It's just the way the world works these days.

    Folks used to go to the barber-shop and read its copy of the newspaper and never bought one of their own, today people would argue that's piracy, lost sales, and the shop owner is violating half a dozen IP laws and needs to be sued sued sued.

    So, unless you really really really like one particular journalists style of writing and are willing to pay $200/yr for it then you might have a feasible business model - best of luck.

     

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    Dark Helmet (profile), Mar 22nd, 2011 @ 6:09am

    Sigh...

    When it comes to this paywall stuff, I know we talk about CwF + RtB all the time, but let's boil it down to a single, simple question that if the NYT can't answer, this is all doomed:

    What are these customers paying for from the NYT that they can't get legitimately elsewhere?

    Because I think the only correct answer is a big fat nothing, which makes all of this an excersize in silliness....

     

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  17.  
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    John Doe, Mar 22nd, 2011 @ 6:12am

    Re: Dont count the NYTs out

    The super-young aren't demanding everything be free on the internet, it just always has been. Think about it, for many young people, the internet has been free for as long as they can remember. So suddenly asking for money for something they have always gotten for free while providing no additional value is a recipe for failure.

    Also, you mention older people will pay but what happens in 10 or 20 years when the young people who won't pay are now the old people and the old people that were paying are dead?

     

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  18.  
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    Anonymous Coward, Mar 22nd, 2011 @ 6:33am

    Re: Dont count the NYTs out

    I'm going to assume you're one of these "older people" and by your arrogant statement "Just the fact that it's the Times (and not some third rate paper) that's doing this means its got a chance." have some ludicrous obsession of loyalty akin to sport fans cheering on a team that failed to be relevant decades ago.

    We "super-young" do not demand everything for free, we acknowledge the reality that the exact same service the New York Times is providing can be found already for free provided by hundreds of news outlets elsewhere who're more than happy to do so. They also acknowledge the reality that charging customers for the same product they can get for free in this day in age is a failing way to conduct a business.

    Provide the news for free and in as many user friendly ways as possible, then make your profits off advertising is the way to go. Like it or not the consumers dictate how to be successful and imposing paywall's will only serve to hurt your chance of success in the long run.

    Regardless, it still boils down to a matter of competition. The New York Times once upon a time established itself as a leader in journalism, when there were very few widely distributed publications that could compete at the same level. Thanks to the digital age running printing presses and requiring distribution logistics is no longer needed. Nor is it required that as a journalist you have to work for a major publication - just because you don't work for doesn't mean your ability to do just as good of work reporting facts is somehow sub-par or less credible.

    Plenty of other businesses realize this truth and are taking the available means to capitalize on the situation to make it profitable to them. Charging the consumer for news is no longer the way to go, and never was for the airwaves, it's just finally hit home for print editions.

     

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  19.  
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    Anonymous Coward, Mar 22nd, 2011 @ 6:34am

    Re: Re: Dont count the NYTs out

    Think about it, for many young people, the internet has been free for as long as they can remember.

    Not only for young people. The Internet has been free since its beginning. And the Internet itself is also very young (if you count only the World Wide Web, which is what most people mean by "Internet").

     

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  20.  
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    proximity1, Mar 22nd, 2011 @ 6:38am

    who will defend this crumby paper?

    For me, the Times is a third-rate paper--third-rate having been bumped up in the general dumbing-down of things. Despite that, I’m going to defend what I think is the sense in their pricing strategy with this paywall, taking as our starting point the three facts noted at the top of this thread:



    • “ Fact 1: According to analysts, the New York Times only needs to convert 1 to 10 per cent of the online visitors in order for the model to pay off.
    • “Fact 2: NY Times chief executive Janet Robinson has stated that they only expect about 15 per cent of visitors to encounter the paywall, since visitors can read 20 articles per month for free.
    • “Fact 3: Full website access and the mobile app are bundled for $15 per month. For the iPad app + web you pay $20 per month. $35 for all three.



    I think the management reasons soundly when fixing the entry barrier at 20 “items” per month without charge. That’s an average of one article every day and a half -- light use of their paper, it bespeaks a reader who is not very likely to be willing to pay anything significant per month to read more. So those readers, who, with continued access might one day decide to become paying readers, “get in free”—if one doesn’t count the obnoxious assaults of the invasive advertising.

    For those who require more, the price being asked of them is far below what even a fifth-rate newspaper typically charges for its daily printed edition. At fifty cents a day, you aren’t going to find a daily worth picking up anyway. So, while in my view, it’s a crappy paper to begin with, at least it becomes a cheap crappy paper at fifty cents per day.

    Similarly, the management figures rightly, I think, when they conclude that offering access to users of additional “platforms”—mobile applications—means they giving those readers “added value” and so, the extra charge isn’t out of line. The offer will likely bring sufficient takers to have been a sound decision. People who really find an advantage in having access on their stupid i-Pad device will pay the extra without begrudging it; after all, they’ve paid through the nose for the “privilege” of being Apple © customers. By the same reasoning, it makes sense to think that there are also a certain number of readers, the “BMW”, “Mercedes Benz” class, who won’t bat an eye at paying $ 35 USD per month for the web + mobile + i-Pad—and even, why not?—the printed paper on their doorstep or office desk. Those readers, who surely wouldn’t have felt guilty about reading the web version even if they hadn’t been paying the NY Times in one way or another, are the ones who don’t have to think twice about such an expense any more than they have to hesitate about spending over a hundred dollars on a bottle of wine at a restaurant.

    I think regular reading of the NY Times is positively harmful and people would be doing themselves a favour by skipping it altogether—just like they would by skipping the television but that’s another, and much more important, issue than the matter of how much to pay for access to the crappy New York Times.

     

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  21.  
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    Marcus Carab (profile), Mar 22nd, 2011 @ 6:39am

    Re: Sigh...

    Well, I think the answer they would offer is: The New York Times. And I do see some validity in that: they have some extremely loyal readers who swear by their paper and consider it irreplaceable. That's why this may not be the total and instantaneous debacle that so many paywalls have been in the past.

    That being said, it's pretty doubtful that the strength of the brand alone is enough to sustain this indefinitely or to make it any sort of smashing success. It seems likely that this will end up a notch on a balance sheet, dwarfed by advertising revenue. And it also seems like they know that: they've made the paywall so porous that, if it isn't working out, they can just kind of forget about it, instead of needing to go through the embarrassing process of admitting their mistake.

     

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  22.  
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    Bas Grasmayer (profile), Mar 22nd, 2011 @ 6:47am

    Re: Re: Dont count the NYTs out

    I don't think there are many online business models that really take such long terms (10 or 20 years) into consideration.

     

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  23.  
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    bob, Mar 22nd, 2011 @ 6:52am

    Too high?

    Let's start off by comparing the NY Times to the sleezeballs who are bastardizing the once wonderful USENET groups:

    Astraweb: $11/month
    Megaupload: 10 euro/month
    Giganews: $5-25/month ($5 is very limited.)
    Supernews: $10/month

    Sounds like the NYT is in the same basic range as these services. Of course you get a completely different collection of bits but the real difference is that the NYT actually pays the writers and editors unlike the mooching scum at the USENET services.

    Hey Mike, here are two article topics for you:

    * The USENET services "don't get it". They're trying to put up a paywall and it will fail because the only thing that's cool on the Net are free things that Google can sell ads against.

    * The USENET services are promising "unlimited" without actually delivering because nothing is unlimited. They're just like everyone selling bandwidth and not delivering it. It's so uncool how they meter and throttle the free pipes just to get us to pay for what we should get for free.

    So get to work.

     

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  24.  
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    Berenerd (profile), Mar 22nd, 2011 @ 6:56am

    Re: Times to change paper subscription pricing

    its the pet rider fee that got me...

     

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  25.  
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    proximity1, Mar 22nd, 2011 @ 6:59am

    people won't read electively, that's what...

    ..."but what happens in 10 or 20 years when the young people who won't pay are now the old people and the old people that were paying are dead?"

    We already have a good idea of what happens then: it's what has been happening already as these people die off---people (in particular, the English-speaking world, because and only because they are such a large part of the highest of "high tech" societies), read less and less or, to put it more bluntly, they read practically nothing which is elective reading. Today and for some time, even college graduates don't read even a single elective book per year. I've forgotten the proportion just off hand but it's stunning--or, it used to be seen that way.

    The really significant issue goes beyond the matter of 'youth' wondering why they should pay for access to the New York Times (or any other daily newspaper) to the matter of youth wondering why they should bother to read anything which they aren't required to read.

    And, then, of course, "reading a book" for many people comes to mean nothing more demanding than reading Stephenie Myer, Stephen King, Robert Ludlum, J.K. Rowling, and on and on. Internet culture which asks the least possible from its habituants, encourages an ever-declining definition of "effort".

    In such circumstances, how does anyone expect people to retain any sense of proportion or discrimination in their critical faculties? Today, we have Barack Obama, the "thinking-person's" George W. Bush, as president. And our "choices" were, at length, between Mrs. Clinton, Mr. Obama, and, on the other hand, John McCain and Sarah Palin, or, in other words, really no choice at all, just the illusion of choice between what's really awful and what's simply unthinkable.

     

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  26.  
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    holeinthewall (profile), Mar 22nd, 2011 @ 7:03am

    Just Another Brick From The Wall.

    Here is somebody's twitter feed of TimesWire links.

    https://twitter.com/timeswiretap

     

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  27.  
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    John Doe, Mar 22nd, 2011 @ 7:25am

    Re: Re: Dont count the NYTs out

    "Like it or not the consumers dictate how to be successful"

    This is the crux of the problem for the RIAA, MPAA, book publishers, newspapers, etc. They, hopefully, know this but are fighting it tooth and nail. That can only lead to failure. The business model couldn't be simpler:

    Step 1: Give the consumers what they want
    Step 2: Profit

     

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  28.  
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    SomeGuy (profile), Mar 22nd, 2011 @ 7:34am

    Re: Different perspective...

    If they invested $40m up front, can you really call it a "success," even in the short term, before they make that money back? If you spend $40 to get $38, I don't think you've succeeded at anything (and I'd be surprised if they make back that much).

     

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  29.  
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    Liz, Mar 22nd, 2011 @ 7:35am

    Re: people won't read electively, that's what...

    I just read your post while I didn't have to.

     

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  30.  
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    Overcast (profile), Mar 22nd, 2011 @ 7:39am

    NY Times? Is that a clock company?

     

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  31.  
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    proximity1, Mar 22nd, 2011 @ 7:40am

    Re: Re: Re: Dont count the NYTs out

    It might be a little more complicated than that.

     

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  32.  
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    Pixelation, Mar 22nd, 2011 @ 7:50am

    As Dylan once said...

    "The Times They Are A-Changin'"

     

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  33.  
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    Anonymous Coward, Mar 22nd, 2011 @ 7:57am

    confused

    so...i have to pay $15-$35 to read the news at their site. And, i have to be careful how much I read because my broadband is capped (ATT Uverse & Comcast are both capping). Unless I use my cell (capped). Or Starbucks (slow).

     

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  34.  
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    proximity1, Mar 22nd, 2011 @ 8:01am

    Re: Re: people won't read electively, that's what...

    How many others are there like you?

    And, alas, as wonderful as they *might* be, my posts by themselves, and even all of the posts at this "wonderful" site of insightful discussion, taken together aren't enough.

    The internet offers crumbs (which lie around for the picking-up, practically effortlessly). If you want more than that, you have to invest some effort. And maybe you do, in which case, good for you. Again, how many are there like that?

    In other words, your example, being anecdotal, does not belie the larger general statistically-demonstrated trends of little or no elective reading. After all, I didn't claim that no one ever reads anything electively any more. I contend, instead, that the differences between today's elective reading, in both quantity and quality (both being very important) and what used to be common only sixty years ago, are immense and a damning indictment of what passes for intelligent reading today.

    Thank you, though, for reading and replying, Liz.

    Remember what (a perhaps apocryphal story has Adlai Stevenson replying to the supportive voter who is said to have exclaimed, during his 1956 presidential campaign,

    "Senator, you have the vote of every thinking person!"

    "That's not enough, madam, we need a majority!

    In that election, the thinking people proved to be outnumbered by roughly 1.366 voters to 1.

    http://en.wikipedia.org/wiki/United_States_presidential_election,_1956

     

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  35.  
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    Anonymous Coward, Mar 22nd, 2011 @ 8:05am

    Re:

    In the States there was this kind of stupid TV show called ... Shark Tank, I think, which was about a group of investors selecting products and business to invest in.

    I saw maybe two episodes and in both there was at least one person who said "if just 1% of people ...". The response from the investor panel was always the same, something like 1% of people are not going to buy something that 0% of people want.

     

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    jjmsan (profile), Mar 22nd, 2011 @ 8:06am

    Previous Paywall

    What I haven't seen anyway is an explanation of why this attempt at a paywall will work. Their pervious attempt failed. I have not seen any analysis of why this paywall should be more successful. In all their publicity they make not mention of their pervious attempt at all. Are they afraid that since they gave up after 2 years people will just wait them out again?

     

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    Sneeje (profile), Mar 22nd, 2011 @ 8:06am

    Re: Re: Way too simple an analysis

    I agree with everything you said, but the post was about using math to debunk the potential success of the paywall--I saw little math and little analysis. Certainly not as much as usual on this site.

    Fact 4, seems to undermine his point--if they can be profitable with just 1% (which he concludes is 6%), then that doesn't seem to be such a leap--something Bas didn't address.

    The piracy thing was only an example of something that lots of people seem to blindly accept without scrutiny.

    Just like, hey, no one will pay $200 per year for something. Great opinion, and I feel like that is true, but I see a number of people on various sites saying that the NYT is important to them and they'll pony up. It remains to be seen if those positive remarks convert to cash.

     

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  38.  
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    Anonymous Coward, Mar 22nd, 2011 @ 8:23am

    Re: Re: Sigh...

    Well, I think the answer they would offer is: The New York Times.

    I agree, this is the answer they would give and it shows an astounding level of arrogance considering the sheer quantity of AP and Reuters stories that are re-printed on the NYT's website.

    I also agree that the NYT was able to build a lot of brand loyalty when they were breaking major stories and really pushing the boundaries on reporting. How will they get credit for breaking stories if they're behind a paywall? Or, a better question, when was the last time the NYT broke a major story? I can't think of the last time a newspaper had an "exclusive" story. They may be the first "real" newspaper to publish something but most of the time the story was broken by a blogger, independent journalist, or foreign paper.

     

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  39.  
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    John Doe, Mar 22nd, 2011 @ 8:23am

    Re: who will defend this crumby paper?

    "when they conclude that offering access to users of additional “platforms”—mobile applications—means they giving those readers “added value”"

    There is an app for that. It is called Google Reader. I can use Reader in a desktop browser or use the Reader app on my Android phone. So what added value does NYT provide exactly, besides cutting you off from your RSS?

     

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  40.  
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    Anonymous Coward, Mar 22nd, 2011 @ 8:30am

    Re: who will defend this crumby paper?

    and even, why not?—the printed paper on their doorstep or office desk.

    Ah, but now you've just highlighted another problem. If you subscribe to the print paper the "digital paper" is included. There is no extra revenue in that model.

     

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  41.  
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    Patty, Mar 22nd, 2011 @ 8:53am

    NY Times Paywall

    At maybe $24 a year they could have brought in more subscription revenue worldwide. The Times had an opportunity to be,like the BBC, one of the first global news sites. But at $195 they lose retirees like myself, they lose students. They have chosen a small, well heeled audience, Gucci rather than Gap.

    Long term I think this diminishes the paper. It breaks the 'habit' in us older folks, prevents it from ever developing in the young. The NYT has always aspired to be a powerful voice, an opinion shaper and it can't be this is hardly anyone reads it. Which also brings up the problem noted on Techdirt with Murdoch's efforts and his writers jumping ship. Journalists want their stories to be read, to matter, to shape events and they can't do this behind a moat.

    I think that the pricing is all wrong and that they should have been more democratic in their advertising which I imagine would involve rate changes as well. They went with closing the door when they should have opened it wider.

     

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  42.  
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    Marcus Carab (profile), Mar 22nd, 2011 @ 8:56am

    Re: Re: Re: Sigh...

    I completely agree, and that's why I don't think this is sustainable. But right now, the allure of the NYT brand (even if it is now mostly an unfounded myth) is still powerful, which is why I think it won't be a complete disaster right out of the gate. In the long run, the paywall is still doomed.

     

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  43.  
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    proximity1, Mar 22nd, 2011 @ 9:07am

    besides, generally, the more $$$ earned, the more reading is done...

    RE # 37 & 38 (above):

    "There is an app for that. It is called Google Reader. I can use Reader in a desktop browser or use the Reader app on my Android phone. So what added value does NYT provide exactly, besides cutting you off from your RSS?"

    [ Not everyone has or wants "Reader", esp when they have a different device already. The point is the "offers" cover the range of what people could have and use. ]

    "Ah, but now you've just highlighted another problem. If you subscribe to the print paper the "digital paper" is included. There is no extra revenue in that model."

    To both, my intended point precisely concerning this elite set of readers is that, indeed, while they aren't counted in the millions, there are these people--more apt, it seems to me, by the way, to read newspapers in the first place than the average person--who don't think about this cost. It's too far below the sums they consider important enough to worry over. Hence, I placed it alongside the $100+ wine. And, yes, they do get something: the Times, which counts for them, is readily accessible on all their little high-tech toys(--which, again, don't necessarily include "Reader"). That's what they want, and the additional cost doesn't phase them. (They're wealthy.)

     

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  44.  
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    proximity1, Mar 22nd, 2011 @ 9:16am

    Re: Re: who will defend this crumby paper?

    I should add as a postscript that I'm anything but knowledgable about all the various types of hand-held devices and other platforms available; Google Reader, for example, I don't know whether it's a free toy or something one has to pay for once or subscribe to--but, with the name "Google" attached, I already don't like it.

    You say you have it on your Android phone (with access to the NY Times included for free, I suppose), but, is this Reader APP also on (or available on) just any mobile phone device?

     

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  45.  
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    Aaron Martin-Colby (profile), Mar 22nd, 2011 @ 9:22am

    Re: Re: Re: Way too simple an analysis

    Coming from the perspective of someone who's worked in online marketing and sales since the late 90's, I can tell you that their numbers are very optimistic.

    Turning a click into a sale is called the conversion rate, and there are many details here that I could go into, but suffice it to say that a conversion rate of 1% is considered excellent. A conversion rate of 10% would be mind-blowing. Unheard of. Never before done.

    Moreover, conversion rates only apply to those given the opportunity to convert, meaning the aforementioned 15%. Conversion rates of 6-66% are impossible. It will never happen.

     

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  46.  
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    Marcus Carab (profile), Mar 22nd, 2011 @ 9:30am

    Re: Re: Re: who will defend this crumby paper?

    Google Reader is a free RSS reading tool that is available as a web app through any browser on any device. There are also many other similar tools that aren't made on Google.

    But based on your reference to "stupid" iPads, and your bias against Google, I think it is clear that you don't know a damn thing about modern media consumption habits and trends, so I'm not sure why you are addressing this topic at all. If you're going to scoff at two of the largest and most influential companies in the world, and mock those who use their products instead of actually understanding why they do, then you aren't going to have a very useful perspective on anything.

     

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  47.  
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    Aaron Martin-Colby (profile), Mar 22nd, 2011 @ 9:31am

    Conversion rates

    I've worked in online sales and marketing for over a decade. If they're expecting conversion rates of over 1%, they are being optimistic.

    If they are expecting conversion rates of over 6%, they are living in a dream world.

    If they are expecting conversion rates of over 10%, they don't understand how the world works.

    If they are expecting conversion rates of 66%, they should be committed.

    Conversion rates of over 1% were commonplace back in the late 90's and early 2000's. They no longer are. Today, conversion rates of 1% are excellent. A good target for any business.

    Conversion rates of 10% are impossible. The best, most highly-focused marketing campaign on earth, where your links are only sent to fanatical customers loyal to your brand will not see conversion rates of 10%.

    The NY Times is out of its mind to expect numbers like this.

     

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  48.  
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    John Doe, Mar 22nd, 2011 @ 9:31am

    Re: Re: Re: who will defend this crumby paper?

    Google Reader, being the usual Google tool, is free. I do not have an RSS feed for the NYT and I don't know if it is available for free. But my point is, news is already available on smartphones and tablets in many forms, either through full web sites, mobile web sites, RSS readers or apps, so saying that they are making a mobile version available for a fee is not providing value. There are already free mobile versions and the NYT probably has/had an RSS feed before.

    If the Google Reader app isn't available on other smartphones, and I suspect that it is, I am sure there are other RSS readers available.

     

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  49.  
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    John Doe, Mar 22nd, 2011 @ 9:35am

    Re: besides, generally, the more $$$ earned, the more reading is done...

    "[ Not everyone has or wants "Reader", esp when they have a different device already. The point is the "offers" cover the range of what people could have and use. ] "

    The point is, that the NYT already had most of the offerings available for free and now want to lock them up. Their competitors also have all of these offerings and they are still free. So the big point is, locking their paper up behind a pay wall provides no new value. It removes value.

     

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  50.  
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    proximity1, Mar 22nd, 2011 @ 9:43am

    "dots " left unconnected... 'It's the TECHNOLOGY, stupid!' ...

    Here, in my view, is a prime example of how and why things are (as I contend) going so very badly for the future of reading and publishing in general:

    item--



    the PewResearchCenter Publications ( http://pewresearch.org/ )

    United We Stand ... on Technology

    by Jodie T. Allen, Senior Editor, Pew Research Center
    May 5, 2010


    You may take some whacks at Goldman Sachs but don't lay a hand on my PCs or Macs! That at least is the message one might take from a perusal of Americans' judgments about who and what are having positive or negative effects on the way things are going in the country today.

    A March Pew Research Center survey found public satisfaction with the state of the nation continuing to decline while anger and frustration with the federal government mounts. Nor are the feds the sole target of public distrust. Numerous other institutions share in its opprobrium. On the scale of positive judgments by American adults, banks and other financial institutions, large corporations, labor unions -- even the news media and entertainment industry -- all score in the 20s or low 30s.

    [emphasis added]



    In other words, in general, the public is a long way (and a long time?) from grasping the intimate, all-important relationship between the general decline as they see it in "the state of the nation" and the continuing march of high-technology. And this "disconnect," this failure to grasp the relationship portends more of the decline that supposedly worries so many.



    by John W. Aldridge

    excerpt from

    The Trashing of America, (1970) first published in The Devil in the Fire , from a lecture given at Cornell University, 9 May 1970 under the auspices of the College of Architecture, Art and Planning.

    ..."I take it for granted that when we speak of the environment, we speak not only of our natural surroundings but of the created world of artifact. And when we speak of the environmental problem, we speak not only of what we have done to ravage and deplete nature, but even more cruelly and stupidly, what we have done to ravage and uglify with our structures the whole quality and appearance of our world. I assume further that when we speak of appearance, we speak not simply of attractive or unattractive forms. We are not asking that our surroundings be beautiful rather than ugly, nor are we holding out for some kind of frivolous or elitist adornment which we value for its own sake. Rather, it seems to me that what our eyes look out upon from day to day not only determines the quality of our aesthetic experience but profoundly affects the character of our moral and metaphysical assumptions. It may be that we have created our physical environment in the shape of our view of ourselves and of mankind as a whole. But our physical environment also works to shape our view of ourselves and of mankind." (p. 330)

     

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  51.  
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    proximity1, Mar 22nd, 2011 @ 9:58am

    Re: Re: besides, generally, the more $$$ earned, the more reading is done...

    Thank you for the clarifications.

    Still, you're taking two different aspects and placing them under one and the same set of critical analysis.

    It's one thing to point out that what will be charged for is going to be "free" elsewhere and something else to complain that what used to be available for free will now cost its users something to access it.

    In other words, the paywall per se is one issue, and how it's implemented is another, different, issue. My comments concern how it's implemented, not its existence per se. So, we've been discussing how people, who are apparently supposedly going to have to pay something for what previously they'd had free(er) or less restricted access to may or might choose to respond to this change of circumstances. My comments are intended to point out that, under the given that certain things are no longer offered or in fact accessible (when that's the actual case) free of charge, there are people who'll find the added value in their ability to get this now-charged-for material here, there and everywhere on their high-tech devices. Even when that might mean paying a marginally greater price to add one more device to the mix. Where they can actually get the same access included i.e. at no extra charge, then, like you and most, I agree that they won't adopt that option, but would indeed adopt it where it isn't also included.

    So, a "paper" newspaper subscriber, for example, could rationally decide under the new scheme that, in addition to the paper paper and what it includes, he also wants access via devices not already included for free. And, in their configuration, the people devising this new scheme haven't left what I consider the realm of reasonableness in deciding that there could be packages (here described as A (basic access), B (additional APPs) + C (yet other unincluded APPS of a different sort) with a graduated price from A to C.

     

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  52.  
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    Marcus Carab (profile), Mar 22nd, 2011 @ 10:07am

    Re: Re: Re: besides, generally, the more $$$ earned, the more reading is done...

    One problem with your set of packages, and it's the reason they are nonsensical. It doesn't go A, then add a bit to get B, then add a bit to get C. It goes:

    A - $15 - web and smartphone access
    B - $20 - web and ipad access (smart phone TAKEN AWAY for more money)
    C - $35 - all three

    So the packages aren't really 'tiered' - they are quite bizarre, in fact, as mathematically they imply web access is worth $0.

     

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  53.  
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    brian, Mar 22nd, 2011 @ 10:28am

    Plus, Why pay for neocon propaganda?

    I stopped reading the NYT after it supported the Iraq invasion, and essentially reported Bush administration disinformation and lies as fact. So, when I hit a link that takes me there, I just close the tab.

    That they want to charge me for the privilege of reading their swill just makes it easier to ignore them.

     

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  54.  
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    Mike Masnick (profile), Mar 22nd, 2011 @ 10:36am

    Re: Too high?

    The USENET services "don't get it". They're trying to put up a paywall and it will fail because the only thing that's cool on the Net are free things that Google can sell ads against.

    Bob, once again, is confused about what a paywall means. That's your problem. The Usenet providers are getting people to pay for a *service*. Not for content.

    Understand the different and you'll be on your first step towards understanding everything else you're confused about.

     

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  55.  
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    The Groove Tiger (profile), Mar 22nd, 2011 @ 10:43am

    Re: Re: Re: people won't read electively, that's what...

    I tried to read your post but nowhere in it does it say if you're in Team Edward or Team Jacob.

     

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  56.  
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    Anonymous Coward, Mar 22nd, 2011 @ 11:03am

    While I don't want to appear to be harping on the concepts, I have to point out that this piece is written by a university student. It isn't that it is a bad thing, but it seems like perhaps maybe the people at the NYT, and all their business people, and all their laywers, and all their marketing people between them might just have a slight bit more of a clue.

    Mike, why don't you introduce your posters more fully? I think it would help to set up their credibility a bit more.

     

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  57.  
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    Bas Grasmayer (profile), Mar 22nd, 2011 @ 11:21am

    Re:

    You might want to do some more Googling on me to check out my work experience before discrediting like that ;-)

     

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  58.  
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    jonvaljon, Mar 22nd, 2011 @ 11:29am

    Re: Dont count the NYTs out

    "Just the fact that it's the Times (and not some third rate paper)"

    Oxymoron alert! NYtimes is a joke homeboy. its the WSJ of the left. i stopped reading it when I got to college and realized its just a corporate/government mouthpiece. It is a Grade A propaganda machine, i'll give it that. As far as a journalistic source of truth goes... 3rd rate would be a bit to generous of a discription.

     

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  59.  
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    Marcus Carab (profile), Mar 22nd, 2011 @ 11:36am

    Re:

    The ideas are all laid out for you to evaluate based entirely on their own merit. Why does this need to be about the person who penned them?

     

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  60.  
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    Anonymous Coward, Mar 22nd, 2011 @ 11:47am

    Re: who will defend this crumby paper?

    Your reasoning is flawed.

    the price being asked of them is far below what even a fifth-rate newspaper typically charges for its daily printed edition


    See those bolded words - that's where you (and the NYT management) are wrong. You're comparing a stream of ones and zeroes (something intangible that costs effectively nothing to reproduce) to a printed newspaper (something tangible that has a definite reproduction cost.)

    If you're going to compare the cost with something competitive, you have to choose something that's actually competitive - in this case, other newspapers digital editions.

    Which don't cost anything.

    So, (as others have pointed out) in order to get people to pay something, they need to offer something that they can't get for free... which they aren't.

    People who really find an advantage in having access on their stupid i-Pad device will pay the extra without begrudging it; after all, they’ve paid through the nose for the “privilege” of being Apple © customers [...] it makes sense to think that there are also a certain number of readers, the “BMW”, “Mercedes Benz” class, who won’t bat an eye at paying $ 35 USD per month


    Here I agree with you - a fool and his money are some party, and as Armin Heinrich discovered, there are at least 6 people on the planet who will pay $1000 for a blinking light.

    The problem with this is sustainability, at least for the ipad crowd. If this is for apple people, they're going to be among your "occasional readers", and once the novelty wears off, will they continue to pay?

     

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  61.  
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    Aaron Martin-Colby (profile), Mar 22nd, 2011 @ 1:34pm

    Re: Re:

    Why bother with addressing the issue when ad hominem attacks are so much easier?

     

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  62.  
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    Sneeje (profile), Mar 22nd, 2011 @ 7:17pm

    Re: Re: Re: Re: Way too simple an analysis

    Thanks, that makes sense.

     

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  63.  
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    Michael, Mar 23rd, 2011 @ 5:59am

    Re: Re: Dont count the NYTs out

    Looking out 10-20 years can be horribly hurt with their up-front and maintenance investments.

    The put $40m into this. In 10 years, if they invested the money and got 1 5% return, they would have $65m, in 20 years - $106m. Now, if you consider that they will have to re-invest in their capital expenditures AT LEAST every 5-7 years, they probably have to make about $50m in every 5 year period to break even.

    It's probably unlikely to pay off, but it is expenditures like this that caused their problems in the first place...

     

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  64.  
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    proximity1, Mar 23rd, 2011 @ 6:12am

    Re: Re: Re: Re: besides, generally, the more $$$ earned, the more reading is done...

    "One problem with your set of packages, and it's the reason they are nonsensical. It doesn't go A, then add a bit to get B, then add a bit to get C. It goes:

    "A - $15 - web and smartphone access
    "B - $20 - web and ipad access (smart phone TAKEN AWAY for more money)
    "C - $35 - all three"

    Yes, I see that. I also used to discover that, as often as not, when I browsed over the vinyl 33 rpm albums of my favorite rock 'n roll groups, somehow they (or, more likely the recording companies' marketing departments) had discerned with a devilish cleverness how to put just one of my favorites of their hits on an album, another favorite of mine on a different album, and so on, such that, in order to get all my favorite hit songs, I had to practically buy every album, rather than one which conveniently contained all the hit songs I wanted.

    I believe this is called "marketing."

    And, if you resent it I not only entirely understand, but I also agree—up to a point. I find something just a little peculiar about people who apparently readily submit to being fleeced by wily merchandisers in some regards while, in other cases, they resent it strongly.

    The machiavellian business/marketing management (not exactly a new thing) at the Times marketing department seems to have noticed that since i-Pad ® users are by definition able and willing to pay more than the bottom-rung of the market for their digital toys, it’s eminently reasonable that they’d be susceptible to be charged more for the service which is adapted to those more expensive toys. As the character “George Costanza” would ask, “Is that wrong (of them)? Should they not have done that?”

    Or, in short, it may not be, indeed, perrhaps isn't at all, a "fair" strategy, but it is hard to argue that it isn't "reasonable" one.

     

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  65.  
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    Anonymous Coward, Mar 23rd, 2011 @ 12:34pm

    Re: Too expensive?

    keep trolling.
    when paying for usenet you're paying for access not content.

     

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  66.  
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    proximity1, Mar 24th, 2011 @ 6:12am

    Re: Re: Re: Re: people won't read electively, that's what...

    I guess that's a joke (and one I don't grasp since I don't know to whom you're referring by 'Team Edward or Team Jacob).

    But since that's the case, the answer is likely "neither one nor the other." And I don't understand why you should need to know this in order to read my comment.

    Maybe 'Team Edward' is a reference to the primary campaign of John Edwards; if so, i grant that there are some things about his public policy statements which lead me to think he'd be marginally better in certain respects than I expected either Obama or H. Clinton to be---and better than they've proven to be. In preferring Obama over H. Clinton, we wound up getting Mrs. Clinton for many practical purposes. Too bad that Obama didn't explain the liklihood of that possibility to voters before the primaries had determined him the candidate.

    But John Edwards, in my opinion, is only very slightly preferable to either Obama or H. Clinton. He claims to defend a stronger populist set of principles but whether he would in fact do that if elected to the White House is the all-important question for me. Obama has now proven that much of his marvelous rhetoric was that and nothing more.

    That the electoral system we have (and have had for many many generations) gave us such candidates as those is ample proof that our real troubles are very deep and systematic and that Teams Edwards, Jacob, Clinton, Obama, McCain or Palin, etc. are distinctions with too little difference. We're offered phony choices by a system which is by design rendering electoral politics empty and useless as a means to reliably and meaningfully translate popular opinion and desires into effective public policy.

     

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  67.  
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    The Groove Tiger (profile), Mar 26th, 2011 @ 6:31pm

    Re: Re: Re: Re: Re: people won't read electively, that's what...

    You're the one who brought Stephanie Meyer, so you oughta know better.

     

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  68.  
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    Londa, Apr 8th, 2011 @ 7:18am

    Re: Re:Ny times

    I can read everything I want. If I see something I can't access I goggle it and get to it that way but mostly I don't have to.
    I considered paying but it costs too much and they need to remove the ads

     

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  69.  
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    Sanjuana Gabriela Galvez Galvan, Apr 17th, 2011 @ 11:15pm

    It can be circumvented

    I know the paywall can be easily circumvented. I'll tell my friends how to circumvent it.

     

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  70.  
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    Stephen, Jan 5th, 2012 @ 6:05pm

    Feeling pretty stupid?

    Your article makes you look foolish. NYT is killing it with the paywall.

     

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