Business Models

by Mike Masnick


Filed Under:
business models, journalism, paywalls

Companies:
ny times



It Took The NY Times 14 Months And $40 Million Dollars To Build The World's Stupidest Paywall?

from the maybe-we-can-confuse-people-into-giving-us-money dept

We've been waiting patiently for almost 14 months since the NY Times announced that it was going to take another crack at a paywall -- something that it had massively failed at last time around. You would figure that given that amount of time, maybe they'd actually get something right. Instead, it looks like they may have gotten almost everything wrong. I'd point you to the NY Times' own explanation of the amazingly complex paywall, but I don't want to use up your limited number of "free page" views, so instead, I'll point you to everyone else's, often much more intelligent, analysis of the paywall, starting with Felix Salmon, who works through the details and can't make any sense of it.

For starters, the plan is confusing. You get 20 page views for free. You can also get around the paywall five times per day if you come via a search engine. Or are reading one of their blogs. Or come via a link from another site, which might mean I can link to NYT stories, but why risk it? Top news is sorta free and certain stories might be free. Maybe. Then, if you're a paper subscriber you get the website for free. Okay, so what's the paywall. For $15 for every four weeks (not every month), you get access to everything on a laptop/desktop or a smartphone. But not an iPad (um, unless you use a browser, I guess). For $5 more you lose the smartphone access, but gain iPad/tablet access. Huh? Exactly. For $35 every four weeks you can get the NY Times on both a smartphone and the iPad. Oh, and if you pay, you still see all the ads. And, finally, this is the introductory pricing. Who the hell knows what the final pricing is. So sign up and expect to have to pay more later. Isn't that appealing?

They spent 14 months and over $40 million on this?!?

It feels like something that was completely developed by committee group-think. It's one of those things where they're sitting around and someone timidly suggests a dumb idea ("I know, for $5 more we take away their smartphone access") and, because they have to come up with something, someone else says "sure" and then they think there's validation of a good idea. But there's no one brave enough in the room to say: "Guys, the newspaper is digital. Charging different amounts based on the hardware is like charging people different prices for listening to the same music on headphones vs. speakers." But no one did that. And because they had a committee, who kept making bad suggestions like this, and 14-months to keep upping the stupid, they spent over $40 million on it.

And here it is. Well, if you're in Canada, that is. Why? Who knows? The NY Times apparently decided to see if they could set off the mocking bomb in a remote area by launching in Canada first, where perhaps they hoped people would be too polite to say "this is dumber than putting gravy on french fries." If you're in the US, you have a few more weeks to get your life in order and to stop reading the NY Times.

Digging into the economics, I'm having trouble seeing how this helps at all. Obviously, some people will pay. But it's not going to be nearly enough to overcome the costs of this program and the likely massive cost in customer service to deal with putting forth the most confusing paywall possible. On top of that, it will decrease people going to the actual website, meaning fewer ad impressions, meaning that they're killing off ad revenue at a time when ad revenue has been going up significantly. Last time the NY Times did a paywall (for just its columnists), many of the columnists got annoyed that their work was hidden away, which made them significantly less relevant. In the last few months I've spoken to a bunch of journalists at newspapers who are considering paywalls, and all those journalists seem to be considering finding a non-clueless publication to work for.

Oh, and missing from all of this? Any attempt to add value. There's nothing new of value to pay for. Just a paywall. Which takes away value.

Perhaps I'll be proven wrong, but I can't see how something like this succeeds. It's like a giant experiment in wrongness. It gets the user motivation wrong. It gets the economic model wrong. It gets the pricing wrong. It gets the value proposition wrong. It's the perfect combination of wrongness, which they now want you to pay for. I think I'll pass.

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  1. identicon
    Joe Publius, 17 Mar 2011 @ 12:02pm

    A self-study in the NYTimes Paywall

    While the paywall was down, I used to go to the NY Times website, primarily for the Freakonomics blog. Then the paywall came up. Being me, I referred to my three consumer commandments:

    1. I like free stuff. Well, no longer free, that's not good.

    2. If it's not free, I don't mind cheap. $15 for access every four weeks? Who do they think they are, World of Warcraft? *insert geekish chortle/snort here*

    3 . I'll pay more if I feel like I'm getting my "money's worth". Since things pretty much croaked at 2, saying that it didn't pass 3 is pretty apparent.

    For the wire news, there are places I can go to get it for free. Since I don't live anywhere near NY, the rest of the stories were just fun little tidbits I can live without. And most importantly, the Freakonomics blog moved, not wishing to be behind a paywall. So, for me at least, this paywall took away the site's primary value.

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