Legal Commentary

New York Times to Adopt Paid-Online Model

By Kenneth Anderson

New York Magazine is reporting (good piece by Gabriel Sherman) that the NYT has decided to move to a paid-online site model ? a drastic shift away from its current free website.  The article explains the debate between the two sides within the Times ? those urging that it has to somehow get to a paid online subscriber base, and those arguing that if it can hang in there, it will emerge with the largest global news site audience, which will enable it to charge a premium advertising price that cannot be charged now:

The decision to go paid is monumental for the Times, and culminates a yearlong debate that grew contentious, people close to the talks say. In favor of a paid model were Keller and managing editor Jill Abramson. Nisenholtz and former deputy managing editor Jon Landman, who was until recently in charge of nytimes.com, advocated for a free site.

The argument for remaining free was based on the belief that nytimes.com is growing into an English-language global newspaper of record, with a vast audience ? 20 million unique readers ? that, Nisenholtz and others believed, would prove lucrative as web advertising matured. (The nytimes.com homepage, for example, has sold out on numerous occasions in the past year.) As other papers failed to survive the massive migration to the web, the Timeswould be the last man standing and emerge with even more readers. Going paid would capture more circulation revenue, but risk losing significant traffic and with it ad dollars. At an investor conference this fall, Nisenholtz alluded to this tension: ?At the end of the day, if we don?t get this right, a lot of money falls out of the system.?

But with the painful declines in advertising brought on by last year?s financial crisis, the argument pushed by Keller and others ? that online advertising might never grow big enough to sustain the paper?s high-cost, ambitious journalism ? gained more weight. The view was that the Times needed to make the leap to some form of paid content and it needed to do it now. The trick would be to build a source of real revenue through online subscriptions while still being able to sell significant online advertising. The appeal of the metered model is that it charges high-volume readers while allowing casual browsers to sample articles for free, thus preserving some of the Times? online reach.

At the end of December, I stepped down as the chair of a nonprofit media assistance organization aimed at developing world media companies and their businesses, so I pay a lot of attention to media economics.  Bloggers, especially on political blogs, tend to assume that the problems of a NYT trace back to politics, but that is far from the case.  The economic problems are baked into the newspaper model, to start with, and the NYT has special economic problems all of its own.  But also bear in mind that the Times is actually in (somewhat) better shape than an awful lot of newspaper companies in the United States ? i.e., it is not in bankruptcy.  Also, the Times website is magnificent ? the closest thing I?ve ever seen to a real newspaper ?feel? online.  I love the WSJ site, too ? but it doesn?t feel like a newspaper the way the Times site does.

I have thought a lot about the Times?s business dilemmas, and really don?t know what I think would work even in principle.  I?ve linked here to a Pajamas Media piece talking about dropping our ($600 a year in DC) home subscription ? but since then I find my New Yorker wife re-upped, only after, I am happy to say, the Times offered a price below home delivery of the Washington Post.

Full post as published by The Volokh Conspiracy on January 17, 2010 (boomark / email).