NYT paywall debut set for Q1 2011
New York Times CEO Janet Robinson confirmed at the UBS Media Conference on Tuesday that the Gray Lady will erect its long-awaited metered paywall -- its "softer approach" to paid content -- during the first quarter of 2011. The news comes parallel to Cablevision's announcement that it has abandoned its own $20-a-month subscription experiment for the Long Island newspaper Newsday's website. It's easy to see why: Unique visitors to Newsday.com fell by nearly 900,000 between September 2009 and September 2010, according to comScore. An ominous sign?
Martin Niesenholtz, the senior vice president of digital operations at the Times, noted at the conference that there would be a limit to how many free articles readers could access for free. Niesenholtz also took a bit of a swipe at competitor News Corp., contrasting the Times' metered approach with The Wall Street Journal's potentially abusable first-click-free approach, as well as the Times of London's hard gate, which resulted in a dramatic post-paywall drop in traffic. Poynter's Rick Edmonds adds from the conference:
"(Niesenholtz) and Times Co. CEO Janet Robinson both said that the switch to metered is a straightforward strategy to generate a second income stream from the Web, now supported entirely by advertising.
The site’s home page, access to stories via links and a limited number of stories per month called up on site will all remain free. Using Nisenholtz’s figures that means the 34 million light users per month can continue their usage as usual (and the Times retains that traffic for advertisers).
But the other 6 million will face the choice of reading less online or paying something, unless they are also print subscribers and granted free access."
If the NYT's last attempt at paid online content, the ill-fated Times Select, has taught publishers anything, it is that there will be great temptation among bloggers to find ways around paywalls to cannibalize Times content. Of course, publishers don't want to entirely discourage bloggers and, we cannot fail to note, the link love that they give to stories, particularly, according to a study by the Pew Research Center's Project for Excellence in Journalism, ideologically passionate Op Eds.
However one feels about The New York Times politically, it produces vital information across all sorts of quite monetizeable verticals. Why else would their content be so delicious to the digital cannibals? Insofar as the Times produces such important information is no reason why they can't hold -- and increase -- their digital reach.
People are particularly willing to pay for vital business information, news that pays for itself. To that end, The New York Times has extended the footprint of its Dealbook franchise adding, among other things, continuous updates and expert analysis. The metered paywall should only increase DealBook's value.
The Times, like most publishing companies, is struggling with a core print business that is shrinking. Robinson noted that digital ad sales at the company will increase by 10 percent this quarter. This, and a slowing of print advertising revenue declines will result, according to Robinson, in a "significant improvement" in operating profit for 2010 compared to last year.