Tuesday, May 17, 2005

Not free, at last, at the N. Y. Times

Just a week after the Los Angeles Times stopped asking visitors to pay for certain online content, the New York Times announced plans to charge for access to some of its most prized web assets. Of the two, the NYT is on the right track.

As positive as this step is likely to be for the NYT, the plan, as discussed below, will not necessarily work for every newspaper. Still, it’s a giant leap toward establishing the prodigious value of the content that newspapers have been giving away for free in an introductory offer that has lasted for a decade.

Starting in September, the NYT will charge $49.95 a year for access to its columnists, its archives (which now cost a preposterous $3.95 per article), an online news-organizing tool and an early peek at certain features like the Sunday Magazine. Home-delivery subscribers will have unlimited access to these features at no additional charge, while all web visitors will have free access to NYT news until articles go into the pay-per-view archives after seven days.

The NYT project looks like a winner. In charging a fair price for access to exclusive, high-impact content, the NYT will establish the value of its wares and pick up some extra cash without seriously diminishing the traffic (and advertising sales) at a website that drew 1.7 million unique daily visitors in April.

In contrast to the strategically shrewd approach architected by the NYT, the LAT until last week had been charging $4.95 a month for access to one of the most popular parts of any newspaper’s web site – its entertainment section. Since Los Angeles is to entertainment what Washington is to politics and Detroit used to be to auto-making, the choice was sort of daft in the first place. The project doubtless succumbed to weaker site traffic and even weaker subscription sales.

In its ill-fated experiment, the LAT emphatically proved that you can’t charge a premium price for commodity content widely available at other sites. Publishers inspired by the NYT need to bear this in mind as they consider charging for the stuff they have been giving away for free since Al Gore invented the Internet.

Publishers could make the case, as do the Wall Street Journal and the Spokane Spokesman-Review, that everything on their web site is so special that visitors must pay to read anything on them (more details in this post). Newspapers can sell a subset of existing, home-grown content, as the NYT intends to do. Or, publishers can create original, online-only products like the Packer Insider developed by the Milwaukee Journal, which costs subscribers $34.95 a year and appears to gross something approaching seven figures.

Regardless of how newspapers play it, the content they sell has to be unique and valuable material that a reader can’t find anywhere else. The Wall Street Journal and NYT can pull this off with a straight face, but most other publications will have to create new, premium content before they can begin charging successfully for online access.

Publishers who think they can open a quickie online goldmine may wind up, instead, like unlucky canaries in a coal mine. Gasping.

Previous related posts

The longest-running introductory offer
Why buy the cow when the milk is free?
Rue the mugging of morgue readers
Peer-pressuring the Associated Press


Blogger brian said...

Question, as i posted about this development elsewhere, I'd like to get your thoughts: Since the Times is now going to charge for access to its columnists in addition to its archives: 1) Is this a sign that online advertising has not brought in the kinds of revenues the paper wants/needs?; 2) How will this impact overseas readers who mostly don't have access to credit cards or cannot afford (releative to their per capita income) the prices the Times is charging?

9:20 AM  

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