Sunday, January 17, 2010

going behind the wall

New York Magazine recently reported that The New York Times is ready to pull the trigger on a pay-to-play model. (Lauren brought up a similar discussion in class on Wednesday. Prescient?) The final decision may be announced within days, once the powers-that-be decide on the appropriate model:

The Times has considered three types of pay strategies. One option was a more traditional pay wall along the lines of The Wall Street Journal, in which some parts of the site are free and some subscription-only. For example, editors and business-side executives discussed a premium version of Andrew Ross Sorkin's DealBook section. Another option was the metered system. The third choice, an NPR-style membership model, was abandoned last fall, two sources explained. The thinking was that it would be too expensive and cumbersome to maintain because subscribers would have to receive privileges (think WNYC tote bags and travel mugs, access to Times events and seminars).
While the pay model will bring in badly needed revenue, one issue is whether the pay model will result in a drop-off in readership in what has become a global journalism soure. Some years back, the paper experimented with a partial-pay system, where some content was free, while premium content was only available to subscribers. As happened when tried a similar strat, it didn't work:
What makes the decision so agonizing for Sulzberger is that it involves not just business considerations, but ultimately a self-assessment of just what Times journalism is worth to the world. This fall, Keller told the Observer that at some point, the decision is a “gut call about what we think the audience will accept.” Hanging over the deliberations is the fact that the Times’ last experience with pay walls, TimesSelect, was deeply unsatisfying and exposed a rift between Sulzberger and his roster of A-list columnists, particularly Tom Friedman and Maureen Dowd, who grew frustrated at their dramatic fall-off in online readership. Not long before the Times ultimately pulled the plug on TimesSelect, Friedman wrote Sulzberger a long memo explaining that, while he was initially supportive of TimesSelect, he’d been alarmed that he had lost most of his readers in India and China and the Middle East. “As we got into it, it was clear to me I was getting cut off from a lot of my readers in India and China where 50 dollars per year would be equal to a quarter of college tuition,” Friedman recently told me by phone. “What was coming to me anecdotally from my travels was the five worst words that as a columnist you ever want to hear: ‘I used to read you before you went behind the wall.’”
Of course, as Lauren and others brought up on Wednesday, the most important issue is this: somebody has to figure out a way to pay the reporters to do the work. bk


geewhy said...

One thing that's significant is that news organizations are less concerned with a drop off in online readership than they used to be. Why? Because it's now accepted that online ad revenue will never match the old print revenue. So who cares if readership drops? It's not translating into huge revenues anyway.

This is part of the reasoning behind Murdoch's deal with Bing. They're willing to sacrifice some hits to get the guaranteed revenue from Bing.

If you're looking on the bright side, these developments indicate that news orgs are at least closer to a reliable biz model that they were when they still believed the old Silcon Valley saw that the only thing that mattered were eyeballs, and that somehow, some way they would magically lead to revenues.

Of course, the Bing deal doesn't equal the old print ad revenue either. So there's still plenty of work to be done.

geewhy said...

Here's an overview of the Bing/Murdoch deal: