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New York Times rolls out paywall in Canada
Well, well. In spite of the total failures of most online subscription paywalls by newspapers and magazines, the NYT has rolled theirs out in Canada as of today. With the exception of specialty papers like the Wall Street Journal, paywalls have been tried several times with two consequences: readers stayed away in droves, and ad revenues fell because readers stayed away in droves. According to TBIResearch back in February, subscription revenue often fails to compensate for lost ad revenue. Rupert Murdoch tried paywalls on the Times and Sunday Times and lost ad revenue has swamped the meager subscription income. Murdoch tried a dedicated "The Reader" app for iPad and early reports suggest that it's a failure as well -- iPad owners are staying away in droves and some of its staff have already fled. The downfall in all of these is that print publications, in almost every case, perceive the internet as a broadcast medium, rather than a communications medium.
I have no intention of subscribing and, in fact, was sufficiently annoyed that I cancelled my $37/year subscription to the NYT daily crosswords. There are lots of other puzzles out there. |
What's a paywall?
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Look here
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NovaScotian, it seems like it's only your Coat Room postings that make me consider posting in this section of the Forums. Anyway...
Let's first look at the summary of how the NY Times pay wall works, via TechCrunch: Quote:
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And let's look at the pricing. I'll give the Times the benefit of the doubt, that they have researched how users are inclined to want content access. The Times isn't charging anything exorbitant. Most people will likely go with one of the less expensive packages, meaning a cost of $15 or $20 every four weeks. That's either $0.54 or $0.71 per day. That sounds reasonable to the consumer and for the Times, since those numbers are less expensive than buying the newspaper and probably in line with the advertising revenue the Times now gets from online readers. On top of all that, the Murdoch-based examples you gave are, at best, only relevant on a superficial level. The reasonable cost the Times is charging is likely low enough to compel interested buyers who, let's be honest here, are usually doing okay financially. That, along with all the free content non-payers will get to see, should help the Times avoid the pitfalls faced by Murdoch's print papers since his papers lost online advertiser support from dramatically decreased viewership. In addition, the Reader app for iPad appears to have done poorly because of what it offers and how it does it (the iPad format), not what it costs. Everyone already knows what the Times offers and whether it is of value to them. Really, The Reader appears to be a multifaceted catastrophe and I see no basis for it to be mentioned here for comparison. What the Times can do that other successful pay walls have done—like the Wall Street Journal and the Financial Times—is monetize specialized content that a large segment of people can afford to pay. Am I correct that the Times will succeed? As far as I'm concerned, prognostication is a fool's game, so I'll take the easy answer and say we'll have to wait and see. But I hope so. As much as I enjoy free access to quality content, I'm more interested in seeing quality journalism survive. If content producers need to make such moves to ensure their viability, then I hope they can make it work. It looks like the Times has taken advantage of not being a leader in this move and has used the many lessons of their early-adopting publishing brethren to guide what suits the Times business model. So while you may choose not to provide monetary support to their efforts, I'd say the reasons you gave are not evidence of their foolishness. |
That article you just linked to, NovaScotian, underlines stupid marketing. Good thing I never took the NYT.
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@NaOH "NovaScotian, it seems like it's only your Coat Room postings that make me consider posting in this section of the Forums."
Am I that outrageous, NaOH? You quite often disagree, but always very politely. With respect to what you've said (in no particular order), I agree that the Wall Street Journal and Financial Post have made a go of pay walls, and I understand that the Atlanta newspaper has done so as well, actually increasing readership. Perhaps the "old" adage that folks will only pay for financial news and porn on the web isn't as solid as it was thought. Perhaps they'll succeed. Quote:
I subscribe to the print version of two Canadian newspapers and read them with my coffee every morning. If I lived in or near New York City (and I did for 17 years as a kid long ago), I'd subscribe to the NYT - my dad did. But the browser experience of a newspaper doesn't come close to matching the paper version, not within a mile, and for that reason it is worth much less to me than the print version, and I think that the NYT would think of me as an "affluent" retiree. It's not that I can't afford it; it's that I won't. My "that's a ripoff" factor kicks in. You might be interested in this (in BoingBoing): New York Times paywall: wishful thinking or just crazy? |
The comic strip "Zits" put it perfectly: "Reading a newspaper online is like trying to meditate in a casino."
(from the Chicago Tribune.) |
You're not at all outrageous, NovaScotian. Quite the contrary. While I tend to avoid commentary in Coat Room threads for reasons not worth detailing, you often broach subjects I find interesting and you do so in a thoughtful way I respect. Those factors can be difficult to resist.
As for the issue at hand, I think you make a key point, "that 'quality journalism' is [not] the purview of newspapers only." Broadly speaking, the online news format, regardless of the "credentials" of the author and/or publisher, has demonstrated this, but it has also shown something I think is more significant. That is, that news has become less consolidated. People often speak of this in terms of specialization. Either way, in the old-style printed news format, this meant that all the content in something like a newspaper was consolidated. Only wanted the sports? You had to get the whole paper with all its sections anyway. While there may be something valuable nowadays in getting content in this new, unconsolidated way—maybe for your technology news you conveniently have three sites you regularly visit—but I think there's value that many appreciate in the centralized format, and that's something which companies like the Times can offer. And I think it's worth noting that while things will play out in whatever way for whatever reasons, it's not all necessarily an either-or proposition. Both styles may survive and thrive. Along with all that, while I'm a good bit younger than you, I'm old enough to appreciate the value of journalism and its underlying ethical and in-practice guidelines. Certainly, that's not to say that such organizations are above reproach, but there's value I (and presumably others) appreciate in the foundational principles of content standards, ethical guidelines, fact-checking, and copy-editing. Just as an example, I'd say the Tech Dirt piece you linked could use some of those attributes. It's an opinion piece backed with the barest of supporting evidence. They knock the idea of introductory pricing, so I hope they do the same whenever something releases something on App Store doing that. And if the Times' introductory pricing ends up being too high and leading to a price cut, I'm not confident Tech Dirt will be as assertive in their mea culpa. On top of that, they play stupid as to why this launched in Canada and not elsewhere when the article in the Times made clear why: Quote:
So I'll challenge you with the same mental framework I often use for evaluating a situation, in this case what the Times is facing. Imagine you're a consultant hired by the Times to guide them through this transitional cultural period, one in which people want reliable, trustworthy news and commentary, when technology is rapidly evolving except for in the methods of print production, when consumers want news available on a number of platforms at any time of day, and they want timely updates. With all that in mind, your client (the Times) faces the fact that the majority of its online content consumers are viewing the content only through external links (so not regular readers), advertising revenues are both declining and have long shown little evidence of being a reliable means to make ends meet for the high costs of journalists who actually go out and do legwork, and high-end revenues from people buying costly-to-produce print versions of the product appear to be in a perpetual state of decline. You're the consultant. What's your recommendation? Taking this approach, my thought upon reading the details of the Times pay wall system was that it looks like a good start to devising and implementing a system that could accommodate the diverse challenges being faced. |
The killer of any scheme I might devise is that the NYT, for several years now, has allowed internet access to its content for free. The NYT is not available to me here, so I got used to reading its opinion pages most mornings, though not too much else, because city news, state news, etc., is not really relevant to me. Now, they want me to pay much more than their content is worth to me; I can (and will) live without it because I don't want to have to count my free encounters to make sure I'm not using up my 20 articles too fast and thus miss one I might have wished to see. Further, many of those articles that do interest me appear in my NetNewsWire feeds and I can see them there unless they cut way back on their RSS content.
After considering that decision, however, which I believe will be pretty common among folks who don't live in New York, I also decided that $37/year for the daily puzzles was exorbitant too, particularly since the Sunday puzzle appears in our Saturday newspaper anyway 13 days later and I can buy compilations of their dailies in any book store. Mike Masnick is often over the top, but you have to bear in mind that he's a member of the Floor64 team and is intent on selling their services to others. His blog is nonetheless, for me at least, thought provoking, because it discusses in a variety of venues, the business models of a number of industries (recording, movies, newspapers, often) that don't seem to "get" the web and its rather different possibilities. What do those of us who visit here actually value? It's a community. A newspaper has a community but except for letters to the editor, it's largely one-way. Masnick's blogs invite and receive a lot of comment, and he often responds to it. So back to the point: the New York Times should never have permitted free access if, in its wildest dreams, it wanted to go to a subscription model later. Neither Bloomberg nor the Wall Street Journal ever did; they had subscription models from the beginning, I believe. You want to read our stuff, you pay was the message. You want to read the NYT, it is free. If a radio station you like suddenly wanted you to pay (and had the means to enforce that) you'd think about it I think and could possibly choose to dial in another if for no other reason to avoid the hassle. The NYT might easily have given away free trials as software authors often do, but eventually you have to pay should have been the message from the beginning. Now, they've poisoned the well. We have a non-profit radio station of oldies here in NovaScotia that has a very broad Internet base. We listen over a cable channel but they get regular letters from expats all over the world. Their business model basically matches PBS' with a few ads thrown in and it works for them -- their on-air personalities are almost all volunteers, usually retired themselves. |
Just saw this in Techdirt. Wish I had written it: An Open Letter From A Canadian To The New York Times, Eh?
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Let's look at some numbers as reported by the Wall Street Journal about 7 weeks ago: Quote:
So let's guess that the Times only converts 10% of those heavy users into customers of the lowest-cost plan. That's 450,000 people paying $195 per year. That would be $87,750,000. This is almost a textbook use of monetizing the Perito Principle (more commonly known as the 80/20) rule. By focusing on the top 15% of the site's 30 million users, all they have to do is convert 1.7% of the entire customer base and they will have matched the annual advertising revenue ($100 million). Of course, they still have advertising money coming in, too. And it's possible they may be able to garner a higher advertising rate since the subscribers may serve as a focused marketing target worth more to advertisers. The majority of the Times content readers get what they want through their occasional visits to the site and via social network links, and the readers who feel the Times is worth paying for get the all-you-can-read content buffet. It looks to me that only folks who are losing in this setup are the ones who want it all without having to pay. I think it's kind of ironic that we're discussing this here on a Mac forum. I mean, some people want commoditized news (kind of like a PC) and others are willing to pay for news they believe is worth a premium (kind of like a Mac). As for Floor64/Tech Dirt, they just don't cut it for me. I mean, they mention the introductory pricing, but I haven't seen this reported anywhere else. In fact, the relevant NY Times page only uses the word "Introductory" to say, "To take advantage of a special introductory offer, come back March 28." Perhaps worse to me is the Tech Dirt title saying the Times built "The World's Stupidest Paywall." That to me is indicative of how I feel the site does a poor job: The title is all-encompassing even though the article itself describes no broad research, and using "stupid" like that suggests an editor (seriously, do they use editors?) or writer who is looking for hits through provocative titling and an interest in shaping people's reactions. For my tastes, those are derogatory tactics used by organizations which don't respect readers' abilities to draw conclusions from facts. Honestly, I feel the two of us are having a more thoughtful conversation in this thread than anything that Tech Dirt piece offers. But like I said earlier, I hope to see all styles and forms able to succeed. Just because I think the work they produce is tripe doesn't mean I'm correct or that others shouldn't be allowed to enjoy it, whether it's availably freely or by subscription. |
No I'm not saying that they shouldn't try something else -- I'm saying that they made it much more difficult for themselves by allowing a very long period of free. The rest of your post (#11) makes perfect sense to me; they might well prosper, and because they really do represent a world-class resource, I hope they do.
Techdirt's heavy-handed slant on things doesn't offend me. Your claim of no research isn't quite right, though. He's published a large number of previous commentaries that did outline sources and facts along the way. Like a lot of web commentaries, that one must be taken with a grain of salt. His blog represents an opinion, not a treatise. I read Daring Fireball too (even subscribe to his linked list) because Gruber writes about stuff that interests me -- that doesn't mean I always agree; but I do think about it. I often read I, Cringely as well. Sometimes he has interesting theories about things, sometimes he's just a dud. Just the price of free, I guess. I read but don't contribute to the Full Comment section of Canada's National Post even though I am not nearly as right-wing as they are. They're balanced by opinions in our other national newspaper The Globe & Mail. |
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I'm still waiting to find someone who provides supporting evidence for how the Times should have handled this differently. Everything I've read is people complaining about the decisions the Times announced today, but no one has clearly shown what would have been better. Quote:
Bottom line: There are rationales to how customers behave. This should not be confused with logic, and that's a mistake I keep seeing in all the commentary I've read. Sometimes purchasing rationales and logic overlap, but not very often. If it were as simple as logic, no one would buy ready-to-eat mini carrots, we'd all drive the most inexpensive car on the market, and we'd be intolerant of waiting in a doctor's office like we are when a restaurant doesn't seat us darn close to the time of our reservation. Instead, people typically make purchasing decisions based on what they value, whether that's something like convenience, some perceived bonus of social stature from owning something, or a desire to get their news with a certain slant. What people want isn't necessarily what they need, but disposable income enables people to give precedence to such desires. The Times believes they have something people value, something people will pay for. The world of news and information is increasingly moving to the digital sphere, and the sooner they can monetize this the sooner the company ensures its long-term viability. Until someone can provide me credible, fact-based analysis of this setup, I have to rely on my own analysis. As I said earlier, this looks to me like a reasonable first step. |
A host of diverse perspectives on the Times move, nearly all of which use supporting information to get at nuances likely to play a role in the success or failure of the company's strategy as it currently stands:
http://www.niemanlab.org/2011/03/ple...imes-pay-plan/ |
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As a former chef who personally knows a good number of doctors, this was one analogy I would use to explain the differences in customer expectations between the business fields: A restaurant is expected to compensate diners with a reservation who are not seated in a timely manner—maybe with a free cocktail, perhaps with an appetizer or a dessert. Doctors offices, despite requiring appointments, have a waiting room.
After a pause, to make certain they understood that I knew the differences went both ways, I'd usually follow with something like, "Of course, in your field you're not allowed to ever be wrong." |
If doctor's offices provided free cocktails when they keep me waiting more than a few minutes for an appointment whose time they themselves arranged to suit their own schedule, I wouldn't be nearly as annoyed at such poor customer service.
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Guess I am the odd man out here. Yeah, they made it a lot more complicated than it needs to be, but basically I think it is a good idea. I view it as a value added option.
Those who subscribe to the hard copy paper get everything free. It is those who do not subscribe that are being offered the option to get certain information at a charge. How is quitting giving away your product for free a bad idea? I subscribe to my state's only statewide paper, but I spend about as much time reading it on the internet as I do at the breakfast table. Sure, national news is free, but that's not so much the case with in depth local and state coverage. Plus, reading the wire services only leaves out the editorial comments about what it all means.... and no entertainment value. And you can read the paper when you are away from home or the paper gets wet or the neighbor's dog steals it. My paper is free to non-subscribers, but all you get is the opening couple of paragraphs and then you have to log in to read the whole story. An easy $9.95 a month for internet only access, but the delivered to your door hard copy isn't a lot more expensive. The wife is more interested in the sales, coupons and such that come with the paper than the editorials. Internet access is just an added bonus to me. If I lived out of state and could not get the paper delivered but still wanted to keep up with the local sports teams then a subscription to the sports section only makes perfect sense to me. |
I used to get the Daily Observer, my local newspaper. The subscription ran out, and because the newspaper was available online - and the new format of the newspaper sucked - we let it go.
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One of our national newspapers, The Globe & Mail ran an article this morning in their business section about the NY Times: N.Y. Times unveils pay wall: Canada first. The author wasn't convinced it was a viable model.
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Khoi Vinh, a former Times employee, has some interesting thoughts posted. Considering what he knows about the company, technology, and media consumption, I wish he'd brought more concrete ideas to the table about how the Times could have better utilized their resources. Still, his overall points about the opportunity cost of what the Times has done are good.
http://www.subtraction.com/2011/03/1...l-really-costs |
Interesting, particularly from an insider. Right on too about wasting money (reported to be $40M) developing such a complex model. As Vinh says, folks will not get it, except this: You gotta pay to read the NYTimes. That free with limits exists will go over their heads; folks want the news, not a hassle. Further, the pricing is weird: $15 for web and smartphone, $20 for web and iPad, $35 for all digital, i.e., WWW + Phone is 15, WWW + iPad is 20 (but no Phone?), and WWW + iPad + Phone is 35 -- doesn't tally.
One of the British newpapers tried a paywall some time before Murdoch's more recent foray and almost immediately lost readership and advertising revenue. Shortly after that, to their surprise, they lost columnists who, after all, want to be read. Frank Rich, one of the more widely read of NYT's columnists has already left. He didn't implicate the pay wall, but was it a factor? |
Digital Subscription Prices Visualized (aka The New York Times Is Delusional). The title says it all. See the link to the blog for the data the chart shows.
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No doubt, the pricing structures the Times is planning have room for improvement. The not-so-good part is the illogical aspects of the prices, but I think the really bad part is the fact that the options aren't easily grasped.
While the Times can always revise this, that comes with the added issue of having to re-educate potential consumers about what is offered. Ideally, they'd use the advance rollout in Canada like a trial balloon and make adjustments based on the early feedback, before the plans appear elsewhere. Unfortunately, I don't get the impression such action may occur as the Times appears to see its strategies as having no room for improvement. |
Viewed in that graphic, you have to wonder how on earth they came up with those prices.
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Based on my own experiences with companies that look to introduce a new revenue source, I'd guess the Times fell subject to any number of the following:
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Number 7 has what I guess may be called an inverse corollary. Namely, that any of points 1-6 often defeat good advice. You basically hit on this when you mentioned "the failure to heed the expert deeming other factors more important."
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And #6 has a corollary of its own. In my experience, good advice can be ignored if it contradicts an inside expert with clout. I've had that happen to me twice and had the great pleasure in both cases of being called back to fix the in-house solution. It must happen to software guys all the time.
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Agreed on the inverse corollary to #6. I thought I was capturing your idea in #5 describing how internal ideas can be self-propagating, but my quickly written list lacked the nuance of your point.
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Not saying this absolves the Times pay wall of its shortcomings, but ideas like this one suggest they are trying to thoughtfully use their strengths to provide added value to subscribers. Companies with appealing products/services but with a value proposition which gives consumers pause can often overcome those consumer questions with add-on benefits like this.
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Not a high-quality article here, but the indications after one year are that the NY Times pay wall has done well so far.
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It's worth pointing out something about the Murdoch paywall for THE Times: Lots of people have been boycotting News International because of the news coming out about how their journalists were up to their arses in corruption and law-breaking.
So it may not be the best example of "this is what happens when you have a paywall". There are lots of other factors. |
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Beyond that, I wonder if the current setup is going to mislead the Times. The paywall has actually helped with print subscriptions, so I could see how the Times may be deceiving itself with that bigger revenue stream. The print-revenue well seems destined to run dry, though pinpointing when is the hard part. Then again, I can also see how they might be ahead of others in the long run from people accustomed to the idea of paying for content, in which case folks might rationalize paying for only the Times online with something like, "Well, I'm paying for the same content I used to buy, but now it's only online." Obviously, it's a complex situation that's hard to assess, even sitting here on the outside like we are. Quote:
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Web and digital subscriptions for the NY Times and International Herald Tribune have reached 699,000.
http://mobile.nytimes.com/2013/08/02...edia&seid=auto |
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