Bloomberg has an interesting short article discussing how the NYT is considering charging for content: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=at4KmZvYijEM
This article is an appropriate follow up the next post about Chris Anderson's WSJ article.
The NYT is in a tough position considering it has been offering its content for free for so long, plus it has already tried charging for content before with TimesSelect - which did not work out well and it was canceled. However, NYT.com is also very heavily ad dependent and the NYT is facing more and more challenges.
The NYT makes a comparison to The WSJ and the FT:
“The lesson of that experiment, however, was not that readers won’t pay for content,” he said, pointing out that News Corp.’s Wall Street Journal and the Financial Times have paid- subscription Web sites.
In addition to those always having some paid component, they are also different type of publications - business/financial 'newspapers.' Plus, my guess is a some percentage of those online subscriptions are paid by corporations/businesses. See FT/Blackstone article as an interesting side note: http://www.observer.com/2009/o2/steve-schwarzmans-blackstone-group-sued-user-accounts
Something else to consider is, is The New York Times product unique enough for enough consumers to pay - or would consumers be able to go elsewhere/competitors move in - Washington Post for Political News, NY Post/Daily News/Local TV news websites for local News, etc...
I saw a similar article and it mentioned methods of payment for news content, specifically an electronic pay pre article system. This made me think about EZ-Pass tags and the revolution in paying for tolls it caused. While the news industry is no way directly analogous to tollways, I will nevertheless draw a comparison. Studies have shown that once an EZ-Pass is installed at a toll, the toll charges increase faster and at a higher rate than before the installation. It turns out that people do not seem to notice, or perhaps care, as much when they pay electronically for tolls. The implications of this are enormous - tollways are bringing in more revenue as a result of new technology because some mental hurdle has been cleared by this form of payment. Obviously, drivers often have no choice but to pay a toll whereas on the internet you can read news for free from a variety of sources. However, if a new source, say the NYT, has readers pay through some sort of EZ-Pass system, then a new model might emerge.
ReplyDeleteIt is important that the news source have adequate reason to charge – you can’t charge a reader for a story they can exactly read for free on another site – but if brand value exists and/or the information is privy then this model may work. If a certain level of content only costs me $.25 to read and I think the content has more credibility than other sources, it may seem like no big deal if my payment information is already in the system. ITunes caught on to this early; how many times have you paid $.99 for a song and thought nothing of it because you only had to click on a button and the charge amounts to pocket change?
The NYT cancelled its prior subscription service for premium content because they said the extra income did not make up for the reduced ad prices for those pieces (since fewer people saw the ads). And this will of course be the test of any new system too. Advertisers might also find that they can target their ad budget even more because a reader’s willingness to pay for an article may correlate with more interest in related advertising; the news provider may then be able to charge more for that ad space because it elicits higher response rates. In conclusion, before we decide that you cannot charge for content unless you serve a niche market like WSJ or FT, it seems like we should test payment methods because the barrier may not be paying but how we pay.
--Kate Grossman