As an increasing number of people visit newspaper websites for their daily dose of information, they are forcing publishers to grapple with the metaphorical question, "Why buy the cow when you can get the milk for free?"
Arthur Sulzberger Jr., publisher of The New York Times, is hopeful that his influential daily has found the solution to making money from the unique visitors to the newspaper's website who no longer buy the print product.
On March 17, the Times launched a metered pay-to-read system for its online readers in Canada. Eleven days later, the system went into effect for the rest of the Times's 20 million unique online readers worldwide.
The journalism industry and business analysts are watching closely. Newspapers sorely need to find a new revenue stream to compensate for advertising dollars lost to the Internet. Consumers can advertise goods and services for free on websites like Craigslist and eBay. That has had a devastating effect on print media. Since 2002, U.S. newspapers have suffered a 70 percent drop in advertising revenue--from $19.6 billion to $6 billion, according to Bloomberg Television.
The Times's pay-to-read system works as follows: A visitor to nytimes.com can access up to 20 articles, slideshows and videos for free each month. After that, the visitor will be charged on a sliding scale: $15 per month for web access and an iPad application; $20 per month for web access and an application for an iPad and other tablets; and $35 per month for access to all three platforms.
In a letter to Times readers, Sulzberger called the pay-to-read system "an investment in our future. It will allow us to develop new sources of revenue to strengthen our ability to continue our journalistic mission as well as undertake digital innovations that will enable us to provide you with high-quality journalism on whatever device you choose."
This is not the Times's first attempt at a pay-to-read model for its online visitors. Several years ago, the Times discontinued a program called TimesSelect, which offered most online content free but asked readers to pay to read its popular columnists such as Maureen Dowd and Thomas Friedman.
TimesSelect led to a significant decline in the online readership of Dowd and Friedman, both Pulitzer Prize winner. Friedman, who specializes in global economic issues, told New York magazine, TimesSelect cost him virtually all his readers in China, and he rarely traveled to any country outside the U.S. without hearing from people who stopped reading him after the TimesSelect pay wall was erected.
The Wall Street Journal, a staunch competitor of the Times owned by News Corporation, offers readers some of its online content for free while charging a subscription fee for other content. But the Times's metered pay-to-read system closely mirrors that of the Financial Times.
If the Times's new model succeeds, surely other U.S. newspapers will follow the lead of the daily known as "The Gray Lady."
The New York Times Media Group owns more than a dozen other daily newspapers, including two of the three largest-circulation dailies in New England: The Boston Globe and The Telegram & Gazette in Worcester. The Times Media Group also owns 17 percent of New England Sports Ventures, whose holdings include the Boston Red Sox, Fenway Park and New England Sports Network.
Perhaps the greatest risk to the Times' pay-to-read policy is readers could limit their use of Times content to 20 exposures a month and then go to other online news outlets that will remain free such as USA Today, Gannett's flagship newspaper, or such international news sources as Reuters, BBC, Guardian, Independent, Telegraph and Al-Jazeera.
However, The Times is banking on reader loyalty toward its brand. Sulzberger believes readers who don't consider other news sources as accurate, authoritative or reliable as the Times will not object to paying for the online version.
"As you have seen during this recent period of extraordinary global news, the Times is uniquely positioned to keep you informed," Sulzberger wrote to his readers. "The launching of our digital subscription model will help ensure that we can provide you with the high-quality journalism and substantive analysis that you have come to expect from the Times."
Time as well as Times readers will tell if he is right.
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