The Unbiased Eye

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The NYT Sugarcoats Its Paywall

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Article first published as The New York Times Sugar Coats Its Paywall on Technorati.

The New York Times imposed its paywall on reader throughout the world, and if the flurry of effort to evade it means anything, the subscription fees should be a smash hit.

Numerous tech news sites and blogs are devoting a lot of attention to the ways around the tollgate. The Business Insider had a good summary of the stratagems in an article, “7 More Ways To Smash Through The New York Times Paywall”.

But all this game playing is a little premature since the newspaper set a deep discount on all its subscription plans, practically begging readers for 99 cents for the first month, in contrast to the $15-to-$35 monthly fees announced. It seems that a number of people, including me, were surprised at this introductory offer, for example: “The New York Times offering discounted digital subscriptions as part of today’s paywall launch” and “New York Times Drops Paywall Subscriptions to $0.99… For Now”.

Kristin Mason at the Times Company pointed out that introductory discounts were mentioned in the original announcement of the details, though not the steepness of this, and she said other offers could be expected in the future.

The Times started the paywall in Canada a week ago to test the mechanics — also with a 99-cent deal. Mason said the company has not yet reported numbers on paying subscribers.

Another event in Canada was the release of a few lines of javascript that lets readers go over their 20-story-a-month free allotment. David Hayes reported last week that his script was downloaded tens of thousands of times. Over the weekend, a reader reported that the script stopped working. Hayes hasn’t responded yet.

But the Times will eventually counter all of these moves, the same way virus writers are countered by security firms in an endless spiral of cleverness. These are really besides the point. If readers value the paper, they ought to pay. The question is really what it’s worth.

In an odd response to another evasion attempt, the Times asked Twitter to take down an account that was posting links to all articles — thus taking advantage of the Times’s policy to allow unlimited access via Twitter and Facebook. The newspaper is trying to take advantage of all the free advertising on the web, without paying a penalty of accepting some abuse.

One thing that gets lost in all the discussion is that the Times has a lot of loyal readers. They have about 900,000 subscribers to the print edition, but that hasn’t been enough. Circulation, advertising and revenue at the paper are just not enough. There’s been serious cost-cutting, including cutbacks in the news operation. It’s clear the paper has to earn more or change what it is selling.

Maybe this is heresy to many readers, but Wall Street’s been struggling with the question for years. The Times is just about the best in a foundering industry. Recently, several Wall Street analysts gave the newspaper poor evaluations, including UBS, Argus and Lazard.

One analyst, Leo Kulp of Citigroup, said the digital edition will need a “surprisingly low” number of subscribers to offset lost advertising. His widely reported comments are nothing if not damning with faint praise.

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Written by theunbiasedeye

March 29, 2011 at 2:26 am

Posted in Business, Media

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