Category: Online Revenue Models Page 1 of 3

The New York Times announced today that it will begin charging online readers for unlimited access to articles beginning in 2011.

The plan suggests that online readers who do not subscribe to the print product will be asked to pay a flat rate to access articles after a certain number of site visits. They have not outlined how many articles a non-subscriber could visit before being asked to pay, but it could be anywhere from three or four to ten. The plan is obviously aimed at protecting their print product by making some pieces unavailable for free online while saying a little prayer that they can still make some money off their “frequent” online readers.

While I think it’s great that the NYT will have some system in place for the occasional reader (as opposed to an all-or-nothing pay wall), one can’t help but wonder how long their “frequent readers” will remain frequent. While I’m not saying it’s a bad idea to try out, the Times execs will need to readjust their expectations for their online readership stats when they go forward with this plan.

I know I don’t visit the Times Online every day, but will if I hear about a good movie review, interesting recipe or perceived trend story of the day. It’s in those quirky features that the Times may lose its foothold as a must-read with those “frequent readers” in question. In fact, it may have to question it’s entire content strategy.

To see what I mean, take a look at the Times’ most emailed list. Those are the sort of stories – in addition to the occasional style or column – that these “frequent readers” have sent to them or find via Google. They aren’t occasionally visiting the Times to catch up on city government news – they’re coming from all over the nation and the world to read about those outrageous New Yorkers taking their four-year-olds to get pedicures or see what Tom Friedman has to say about China.

These sort of stories, while interesting, may not have enough utility to a reader to warrant a subscription or regular fee. You can get the headlines from somewhere else – the rest is just gravy. Not everyone wants to pay for gravy. The Times learned that before when they did their two-year freemium plan called TimesSelect, which limited access to opinion pieces and other online features. They shut it down in 2007 because, surprise surprise, closing off part of your website kills your search engine optimization and web traffic.

They will get smaller traffic numbers. They will fall in online metrics stats when compared to other sites. They’ll need to be ready for that – and the (further) drop in online ad revenue that goes with it.

They may also want to reconsider the kind of content they produce if this “frequent reader” base depletes. They may have to largely abandon their online bread-and-butter in that most emailed list. If those formerly frequent readers try to stay below whatever the monthly visit limit is, they may want to use their tokens on something more substantial than, say, a trend story about designer shoes for dogs. They may not want to pay – or ask their friends to pay – for the content they used to email or share so freely on Facebook or Twitter. It may be time to rethink whether or not those sort of stories should be written at all, especially if the Times ends up cutting staff again.

In the meantime, the rest of us in the newspaper industry are content to let the Times be the canary in the coal mine. We’ll see if they stick with it and if it manages to make money in the end, though even if it does work, it may not be scaleable for the small daily or metro. I guess we’ll see what happens in 2011…