The New York Times Co. NYT-N is betting on a digital future, launching a long-awaited pay wall for its website in a bid to preserve its core subscriber base.
It’s a defensive move to keep loyal readers from abandoning the Times’ print product for the free online equivalent. The plan was originally announced in January, 2010, when the company said it would implement a payment plan for the website in 2011.
On Thursday, the Times said it will launch its pay wall in Canada immediately, and in the rest of the world on March 28.
All print subscribers – whether they get weeklong delivery or only weekends – will get unlimited digital access, but everyone else can view a maximum of 20 articles a month before being blocked – and asked to become digital subscribers.
There is a loophole: Search engines such as Google and social media websites like Facebook and Twitter can still post links to New York Times stories, and users who follow those links will be able to see the article, even if they’ve passed their limit for the month. Those links are not infinite, however: those using Google search results are limited to five articles per day before they’re prompted to subscribe. (The work-around prompted one cheeky reader to establish a new Twitter account, @FreeNYT, on Thursday, pledging to post links allowing people to read for free.) Those links are important because they help protect The New York Times brand, said analyst Edward Atorino of Benchmark Co. Otherwise the paper might drop from the cultural conversation and readers might not be as inclined to search out its content.
“They want to get people to the site. … They want you to go down the road, and then come to the bridge and there’s a toll,” he said, adding that heavy users might not have enough patience for the work-around.
The newspaper is using Canadians as guinea pigs: In a statement Thursday it said the early Canadian launch would help it “fine-tune the customer experience prior to the global launch.”
This is yet another kick at the pay-wall can for The New York Times. It tried to charge for digital access in 1996, but scrapped that plan after attracting roughly 4,000 digital subscribers. (The paper has an average daily subscription of 876,638, including 71,697 electronic subscribers, according to the most recent Audit Bureau of Circulations figures.) In 2005, it launched the TimesSelect service, asking $50 (U.S.) a year to read content by the paper’s columnists on the website. TimesSelect pulled in roughly $10-million in two years. But limiting the number of people who look at the site also limits its attractiveness to advertisers. Web ad revenue fell, and that experiment ended in 2007.
Now The Times is trying again.
“We discontinued [TimesSelect] because at the time, our focus shifted to a search-driven advertising model,” Times spokesperson Eileen Murphy said in an e-mail. “Now, in the app-driven world that we all live in, people have become much more accustomed to paying for high-quality information. We believe that this is exactly the kind of news and information that we produce.”
Although pay walls limit the number of viewers a site can deliver to advertisers, One argument against the pay wall model for websites is that by restricting how much content people can view, the ads those websites sell become less attractive. But Web ads are not enough to sustain the business during its transition to digital, said Leo Kulp, an analyst with Citigroup in New York. The paper needs the second source of revenue that subscriptions provide, he said. “The proliferation of online ad inventory makes it really hard for any company to be an all-digital, ad-supported business,” he said. “The big issue is the eventual iPad transition. What’s really going to determine the success of the Times in the long term, is can they generate enough revenue on the tablet to offset the losses in print.”
