A Bold Experiment in Paid Content

We are about to witness an extremely important experiment in journalism, marketing and the economics of the Internet.

Last Friday, the 159-year-old New York Times, arguably the nation’s most important newspaper, announced it would be charging a subscription for the online version of its product.

In an email to current subscribers, the newspaper announced a hybrid plan that would still allow non-subscribers to read breaking news:

  • On NYTimes.com, any one can view 20 articles each month at no charge. After 20 articles, you will have to subscribe.
  • On smartphone and tablet apps, the Top News section will remain free of charge.
  • The Times is offering three digital subscription packages:  $15 every four weeks for access to the Web site and a mobile phone app (or $195 for a full year); $20 for Web access and an iPad app ($260 a year); or $35 for an all-access plan ($455 a year).
  • New York Times home delivery subscribers will receive free access to NYTimes.com
  • Readers who come to Times articles through links from search, blogs and social media like Facebook and Twitter will be able to read those articles, even if they have reached their monthly reading limit.

My response is, “Hurray!”  We need to keep journalism vital in our country and to do that it has to be funded.  When my subscription offer hits my inbox this week, I will be the first to subscribe.

The risks in this plan are significant.  The company might jeopardize its huge online reach and drive away advertisers, which now represent more than a quarter of the newspaper’s revenues.

Plus, it has already failed at this attempt once before. The Times had experimented with a pay model from 2005 to 2007.  That program brought in 227,000 subscribers at $49.95 a year, generating about $10 million in revenue.

But after they commissioned a study to examine how TimesSelect was working, company executives became convinced that restricting access to the site was constricting its potential for more readers and more advertising.  When that program ended, traffic to the site almost doubled. It now stands at more than 30 million unique domestic visitors a month.

With the decline of their traditional reader base, this new subscription model is the most urgent development since the advent of the Internet itself.

What’s your take on this?  Are people going to pay for content or are they permanently conditioned to find their news and information for free?

Note: This morning Mashable reported on Twitter-based scams individuals are setting up to get around the 20-article limit. Is this enterprising or is this stealing?

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  • Hi Mark,

    I completely understand the reason why the Times is interested in doing this and why they even feels that they must in order to stay viable. Although I’m sure they have run sophisticated financial models to test out the inevitable drop in traditional online readership I am not sure this is the brightest move and this is why:

    In our current day and age where there is so much profound and relevant information through millions of free sites it seems to me that the “free” to consumer model is the way to go. A lot of very intelligent futurists have been betting heavily on this experience not just for news but for example for music and other forms of entertainment too. We have seen the introduction of FREE Web TV, Hulu plus is causing some noise for cable companies, As long as sites such as Associated Press and similar continue to offer free news, people will more and more take on the role of editors into their own hands. Am I saying this is ideal? no but I certainly see it as innevitable.

    Another reason why this is not the best move in my opinion is because it will simply foster creativity in the form of people finding out technologically legal ways to still get it for free. Just today, the tweet feed @FreeNYtimes was asked to be shut down by the newspaper on grounds that it is violating its trademark, How difficult would it be to rename it FreeNYpaper and continue operating without a glitch?

    Just a few thoughts.


  • As a side note and something I did not clarify well enough: I know that hulu plus is not free but It is certainly cheaper than traditional cable.

  • I totally understand Times charging a subscription fee. I believe it’s a very smart move that aligns with the very here-to-stay electronic age. With the emergence of tablets and the Kindle the newspaper will become like the vinyl record or the cassette. Most people will be reading the paper on their mobiles or tablets and the ability to react promptly to this change in habit which will be widespread, in my opinion is a sound strategy.

  • I really do not think this is such a great idea as was already stated. I think most of us want stuff for free, and there are many legitimate news sources that do not charge for their news. I am reminded of the old expression “why buy the cow when you can get the milk for free?”

    Not only will they lose readers, I think that most casual readers would never see the value in paying. We are now so horribly spoiled by everything being free and being on demand that free is the status quo.

    I also think this is the wrong economy to ask readers to pay. This is still for many of us, not the best of times, and if i were a reader, not only would I feel alienated, but I would seek my online news elsewhere, free of charge.

    Right now, I have very little extra money, so I could not subscribe at this time. I would not only be annoyed (because this was free for so long) but it would be unlikely that I would return, even when my fortunes changed.

    Just my take on this, and as they say “your mileage may vary”

  • We really are conditioned for free these days, but I think because of the Times reputation , the majority of readers would pay to subscribe.

  • It seems to me that what the NYT is doing is banking on credibility. There are tons of places to get free content, sure. But how many of them are credible sources of information? You will pay for the eons of journalism experience living behind the paywall.

    Even with 20 free articles, I’m guessing NYT will hold back some of the good stuff, or make some of that exclusive to paid subscribers. The 20 free are teasers. That’s the sales model.

    Don’t know if it will work. However, the times are changing (no pun intended), and pay-for-view will become more apparent with new internet business models. We see that in platforms already, with free and premium services.

  • I think this probably represents a prevailing sentiment, Bernardo, especially among younger people conditioned for free. I had just added a link to that new Twitter scam on the orginial article.

    I guess the thing that is missing for me is, if there is never any revenue assoicated with the writing and distribution of news, there will be no professional journalists. It takes a tremendous amount of time and resources to do investigative reporting. Who will do it? Perez Hilton?

    I am going to gladly buy a subscription to this online version because first of all, it is the ethical thing to do, and second, it is the right thing to do. It is a a “vote” for the importance of The New York Times (just as I already “vote” for the Wall Street Journal, which has had a paid subscription model for years).

    The difference for me is, we don’t need cable TV to have a democracy. We do need a free (or paid subscription!) press that is fiercely independent. My take on it but I realize I will probably be shot down by most people! : )

  • I’m glad you agree Tola. I haven’t subscribed to a paper newspaper for several years now! Thanks for taking the time to comment today!

  • I really love your honest, personal, and passionate commentary Nancy. I think the economic situation is an extremely good point, and certainly a big risk in the equation for the NYT. A very good point, thank you! (BTW, you are going to be an awesome blogger if you pour your heart into it like this!)

  • Time will tell. For me, there is nothing that can really replace the New York Times. I will gladly pay, but I’m probably in the minority.

  • IMHO, the NYT and others like it are going to miss the opportunity available through the “free” distribution of content in return for “eyeballs” and advertising revenues. If their content is that good, it will become a crucial read for everyone and the advertising revenues will soar. As has been said here, the web consumer is conditioned for “free” and will likely gravitate to other free sources over time.

  • I probably didn’t do enough credit to the point about the 20 free articles per month. In the NYT’s own coverage of the announcement, they said this was in recognition that they are the newspaper of record for many events and that in the event of breaking news, they are not going to stand on a paid subscription and keep people from getting information they need. So they chose this hybrid model, which will allow people to get the breaking enws they need, but if they want to read the paper every day, they need to pay.

    So, I don’t think this is meant to be a marketing ploy. I believe them when they say they are doing it basically as a public service. Let’s face it, they could put a stop to the free scams already popping up if they didn’t have that 20 articles free provision, and ultimately the scammers may kill that strategy.

    Thanks for sharing your wisdom, Paul!

  • You have definitely put your finger on the risk, Steve. They need to maintain that balance between eyeballs/ad revenue and subscription revenues! Well said!

  • Agreed. I do not see this as “marketing” in the sense of a biz model. They need to generate revenue, and they’ll discover what is most valuable to the reader, then put a price tag on it. That’s the subscription model. I can’t argue with that. Whether online or at your doorstep.

    The hard part will be determining what lives behind the paywall in terms of articles that non-subscribers will want and will pay for. It will be a moving target.

    In all reality, we should applaud NYT for moving forward on this. This is the new model, and everyone will have something like this before too long. Watching the big guns go after it can be a good thing in terms of lessons learned that others will follow.

    And thank YOU for allowing me to comment, Mark.

  • Personally, I feel we are too conditioned towards free. Someone on Twitter recently pointed out that some were in an uproar to learn that some HuffPo writers were not paid but then were in an uproar to learn about the Times paywall. You can’t have it both ways — would you ask a painter to paint your house for free? You could do it yourself, right? Sure, but the pro does a better job/is faster/has experience in climbing tall ladders, so you pay.

  • That’s my view too, Chelsea … but perhaps we’re in the minority. I don’t mind paying for quality work. In fact I have been known to pay freelancers MORE than they asked because they were under-valuing themselves. The economics of the Internet are out of whack : ) Thanks for your comment!

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  • I’m not a big fan of paid content not only if you do your research and make sure its unique content..

    “Black Seo Guy “Signing Off”

  • Anonymous

    Boy. As long as there is quality content available for free, it will be a tough sell. Having said that, I strongly agree New York Times (and others) are at a quality I would be willing to pay for. This will certainly allow the top quality organizations to float to the top and charge. I’m interested to watch this unfold!

  • This is going to be an amazing case study!

  • Hi Mark. You make some extremely valid points here and I agree that investigative journalism requires not just dedication but cash. My proposal is to make it free to the consumer yet continue to have someone else pick up the tab. I feel that a new and innovative model of engagement by brands beyond pay per click ads will be a necessary evolution in order to adapt to the never ending explosion of “free” content moving forward. I also agree that rigging the system is not ethical, but we can either adapt to how the world is or push hard to change it. In my mind, in this particular scenario the NYT would be better served today by creatively adapting. -Bernardo

  • Mark,

    Is there a market for paying news? I remember when The Times (in the UK) moved to a paying version and I did not make the move to being a paying reader. I enjoyed the online version of the newspaper but had access to pretty similar free content from The times competitors, and still have.

    I agree with you when you say that we currently (as consummers) don’t want to pay in general for online content. But I can’t see many people moving to the paying option as long as good journalism will be available for free. Does it mean inferior news if we go for free content? I am not sure (either ways good/bad). But right now I will stick to the non payong options.


  • Mark,

    Is there a market for paying news? I remember when The Times (in the UK) moved to a paying version and I did not make the move to being a paying reader. I enjoyed the online version of the newspaper but had access to pretty similar free content from The times competitors, and still have.

    I agree with you when you say that we currently (as consummers) don’t want to pay in general for online content. But I can’t see many people moving to the paying option as long as good journalism will be available for free. Does it mean inferior news if we go for free content? I am not sure (either ways good/bad). But right now I will stick to the non payong options.


  • Anonymous

    Mark –

    I think the NYT approach is correct, but not fully baked, yet. Yes, media needs to focus on customer revenue – not just advertiser revenue. This is highlighted in AdAge’s article “What Magazines Should Learn From the Movie Business” – an interview with David Carey (President of Hearst) at http://adage.com/article/mediaworks/hearst-magazines-president-magazines-copy-movies/149388/ … (full disclosure – I am Director, Social Media at HFM US – recently announced to be acquired by Hearst). BUT paying for content requires a few things (not some) … 1) superior content (yes NYT wins here), 2) contextual relevance (catered to the individual), 3) multi platform access, 4) ability to for add UGC and then distribute (more than just sharing), 5) archival retrieve, and a number of things I have not thought about yet.

    I think the NYT has taken a bold step, BUT does not have a full functional feature set to be successful, yet. Paid content will require great content and complete ease for users to get exactly what they want – content specific to them. Almost there – but not quite yet. I think we are still a little short on contextual relevance and integrated UGC-then-sharing capabilities. This means the content providers will also need to be curators of other great content providing an aggregation point to get the best content for the reader.

    Value proposition – give me great content that you produce, pointers to other great content I care about, and the ability to add my own additions and you have a platform worthy of payment.

    (The opinions expressed here are completely mine and do not reflect that of my employer.)

    Steve (aka “Social Steve”)

    PS – Only the very best content providers will be successful with a paid initiative.

  • Mark,

    I think that the Times is taking a pretty extensive risk by taking what was free and charging for it. I do believe in a strong and successful press, but I wonder whether or not this model will work, especially since of the failed attempt just a couple years ago. Truth is the Times has been struggling with its subscriber base for some time and I am not sure that charging for access is the best way out.

    It will be an interesting experiment. However, what will the Times do if it fails?

  • Do you really believe that the New York Times is fiercely independent?

  • About time. I heard Mark Jannot, the editor-in-chief of Popular Science, speak at a conference in Boston a few years ago and he projected a similar tiered model for the magazine. This is the future and if launched correctly it will be sustainable. The key is to provide the right mix of free content, teasers of paid content, and payment tiers for reading the paid stuff.

  • Question back your way: If Mark Schaefer offered some blog content for free but other blog content for payment, would you pay?

  • Hi Mark, first time on your site today and very much impressed (A friend of mine, Ingrid Abboud, from NittyGriddy, was kind enough to send me a copy of your book about Twitter, and that’s how I found out about you).

    Honestly, I’m not sure how I feel about this move, but this much I know— The NYT has got to do whatever they can to make $$$, and lots of it, and this means they’ve got to have their innovative minds on overdrive to figure out a business model that works. I think if the value and relationship is strong enough, people will pay….but then again, journalism is a difficult animal in the 21st century and I seriously feel for the entire industry.

    But thanks for the thought provoking read and look forward to coming back, I’ve now subscribed.


  • So sorry to hear about your fall. Take care of yourself! I think your sentiment is probably with the mainstream on this one! Thanks!

  • When I saw the NYTimes strategy, I thought it was pretty reasonable although I get the print paper so I guess I won’t have to pay for this access.

    My perspective though is based on my local paper in NH which requires registration to access even 1 article, then only allows access to 3 articles/mo before you have to get a paid subscription and I thought the number was too low (I would have found 10 reasonable so of course, I like the NYT number of 20).

    Last week I ran across a Dallas paper (someone sent me the link) which required payment for accessing even one article – for someone who lives a thousand miles away, this was ridiculous.

  • What a fanastic comment Steve. Here is a great analogy I think. I was sitting in a hotel lobby today and made this observation. In a sitting area there was free, fresh brewed coffee. It was hot and very good. I know, I had it! Across the street was a crowded Starbucks. People sitting next to me left the lobby, went across the street — in the rain — and paid $4.50 a cup for the Starbucks “content” instead of the free hotel version.

    I think that is a great testament. At the end of the day, we all want to be Starbucks-good : )

  • Oh my that is such a good question. I don’t even want to think about it. I have a theory that in the future there will be sponsored journalists. They will get annual grants to do their work because there won’t be any newspapers left. Thanks for the great comment.

  • Hear, hear. Well said. Actually, perfectly said, Ari. Thanks!

  • Welcome aboard, Marcus! I’ll try not to let you down. In fact, I won’t. : ) Thanks for the great comment and I look forward to having you in the middle of our debates here on {grow}.

  • I think you hit on a really key point. I always thought pricing was the most difficult part of marketing. Gut-wrenching sometimes. So many moving pieces. And in this environment, you’ve got hackers actively trying to un-do your model and give away your product for free. That is just a very tough business situation. I hope they blow the lights out.

  • No. No person or organization can be totally independent and unbiased, but I will tell you that having worked with some of these people, that is their goal. They really try to be thorough, balanced and fact-based.

  • I think when things started going “free” 15 years ago, that was the prevailing opinion — that new models would emerge. But they haven’t for the most part. We can keep hoping.

  • I think there’s a difference between independent and unbiased though, mate.

    I might be biased, but if I have an editor looking out for my content, he or she will soon knock that out of my article.

    If I’m independent, though, thoughts are completely my own to publish as I wish. So, yes, no-one can be completely unbiased – just by the pure definition of the word – but I’d suggest people can be 100% independent.

  • No. Not for blog content. Strategic information behind that wall that no-one but premium or clients can get access to, though? That’s a far more viable option.

  • No. Not for blog content. Strategic information behind that wall that no-one but premium or clients can get access to, though? That’s a far more viable option.

  • Allen Roberts

    Quality journalism needs to be funded, experimenting with paywalls is the obvious route.
    However, several major behaviour changes needs to occur:
    1. Consumers now used to “free” need to be re-educated, a tough ask.
    2. Audiences have fragmented, therefore the content needs to be far more targetted than the existing newspaper formats, converted to digital typically are, to match the readers interests.
    3. Reading a newspaper is an experience in “browsing” whereas, a digital version is far more selectively consumed. Another behaviour change that needs to be accommodated.
    Allen Roberts

  • I agree, but what information is not already avaialble for free somewhere? Very tough business model.

  • A useful thought Danny, thanks!

  • 1) I would add “impossible”
    2) Agree.
    3) An excellent point. I don’t want an aggregator deciding for me all the time!

    Thanks Allen!

  • Yes I recently accessed a community paper online — city population 50,000 — and could only access the online newspaper with a subscription. I guess they know what they’re doing? Thanks for the comment Tina!

  • There is both a value and cost to true journalism. And I totally agree that we need to keep journalism vital. I think the timing is right. The explosion of online content is making it much much more difficult to find relevant and accurate content. There is a value to me as a consumer to not have to wade through tons of free crap to find it.

  • Interesting post, Mark.

    I am not sure The NYT is getting the pricing model exactly right, but I am a firm believer that if content is good enough, people will pay. However, in my experience, content needs to be “uniquely valuable” in some way, before people will pay in any real numbers.

    If The NYT content is similar to another paper, who are using a 100% advertising based model, it’s hard to see why people would pay The NYT.

    This will be an interesting one to watch, that’s for sure!

  • Late to this part, I know, but thought I would share – NYT is allowing a Twitter feed to circumvent the paywall for people to get more than 20 articles per month. How will this affect the model? http://mashable.com/2011/03/25/new-york-times-paywall-date/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Mashable+%28Mashable%29

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