Description: At issue was the biggest strategic leap in a generation for the 159-year-old New York Times: would readers be willing to pay to read its journalism online?
Source: Nytimes.com
Date: March 21, 2011
IThe Times announced its new subscription plan last week to widespread debate. Many readers and bloggers said they were happy to be able to finally pay for their frequent use of the Web sites, while many others — joined by some industry analysts and pundits — said that The Times was dangerously out of step with the digital age and that the approach was doomed to fail. Read rest of story
Questions for discussion:
- Why has the subscription model not succeeded in the past?
- Will this business model for newspapers online work this time? Why or Why Not?
Brett Quinton
The subscription model has never worked in the internet age. This is because there is no such thing as an exclusive story anymore. The NY Times was able to provide interesting stories that no other organization could match. This is not true today as everyone now has access to all of the news and other information that they could ever want. The NY Times is a popular newspaper, but this subscription model will not work. They limit you to 20 free articles a month and then make you pay to read the rest. The problem is that a news aggregator, like google news, will show a headline about a story. The NY TImes could be the first on the list, but below it there are usually 100+ other organizations covering the same story. If the NY Times is going to try to say that the reader needs to pay if they want to read the Times or can get the exact same story for free, they are crazy. I understand that they have done a few surveys and think people will pay, but there is a big difference is what people say and what they actually do.
Oloff Dreyer
I think the subscription model did not work in the past, because people are able to get the same news for free from other areas. There are many sites online that offer the same information at no cost and New York Times is trying to make its customers pay for the same information. Therefore the subscription model has not worked in the past and I somehow doubt it will work now as the sources to get news are only increasing especially online. The surveys tell a different story but I’m sure once they actually do a test run of this model the truth will be revealed. People will not pay for something they can get somewhere else either for a lower cost or for free. I don’t think this model will work for other newspapers online either but it is definatley worth a test trial as the surveys show a different story.
Kevin Beauchamp
The subscription model has had a hard time succeeding in the past due to the nature of news being covered. For general news, it could have mostly likely been found anywhere with no need to pay for it. The articles of interest being blocked also prevented The Times from attracting potential readers and advertisers. Another reason may have been because some people weren’t ready to get news online from technological source compared to the traditional form of newspapers. Now that so many advances have been make in the ability to use technology anytime, anywhere (Apple products), the resistance could be starting to slowly fade away. The subscription model may be able to work for The Times this time as they have figured out what exactly readers are willing to pay for. They have also researched other companies such as Weight Watchers and Apple to see how they implement online ordering systems.
Katelynne Swenson
I personally feel that the subscription model will not succeed. As said in the article, the information is not time sensitive unlike a financial newspaper. If you are interested in reading the article for the news, you can google the same headline and come up with a different article with basically the same information. So why pay for it when you can get it for free? I’m sure they will have some subscribers to the online articles, but not enough to make the model succeed. Subscription models have not been known to succeed in the past and I doubt it will succeed this time around. They are comparing themselves with Weight Watchers and iTunes, two very different models than what the New York Times is proposing. Weight Watchers is a subscription that cannot be duplicated the same way. They are unique and as a business this is what makes them successful. The Times does not have this same uniqueness.
J.E.
I really do not know what to think about this subscription model. I know something needs to be done but I am not quite sure if this is the right way to do it. Personally, I would not pay for an online subscription for a single news paper even if it is the New York Times. On the other hand I would pay a one-time fee to be able to use the site and definitely to be able to download the iPhone or iPad application. For the people that do read the paper every day online they probably would pay a subscription fee but for what I think is the majority of people a one-time fee to a specific newspaper is all that you would get out of me. It will be interesting to see what everyone thinks about this plan when it rolls out tomorrow but I don’t see good things coming (and who borrows 250 million from a Mexican billionaire at 14 percent???!).
Kim B
I have my doubts that the revenue subscription model will succeed this time around. I don’t see that much of a difference between the New York Times former revenue model and the on they are currently in the process of implementing. If people want to pay to read a paper, they can but the physical version of it. If they want to read a paper for free, they are going to go on the internet to see what they can read. If they are forced to pay for information that should basically be free, as it was before, then they may just go to other news sites or newspaper sites who do provide free information. The internet made it’s name as a place to find free information, so putting a price on the news, especially when it was free before, is just silly. It’s simple economics. If people were receiving the service for free before, and all of a sudden they start to get charged to receive the same service, they are going to substitute towards that service. They will substitute other newspapers or sites in lieu of paying for a subscription, when before, they didn’t have to. Law of Substitution. Simple as that.
Mikey
I agree and disagree with Brett.
I think the system would definitely work, they are just expecting too much from the readers (too high subscription fees).
I’ll give you an example, take Napster or Kazaa. They introduced free music downloads. They were big and people stopped paying for digital music. The music quality went down and people started to look for other options…other free options. Apple saw that and took the best of two worlds: money and digital. Other examples are Netflix, Vudu, Hulu …etc.
I think the key here is to give customers affordable options–like the .99 cent downloads from itunes. I think a great business plan would be to charge a daily .99 cent access fee (similar to some host/downloading sites like Megaupload, FileDude, RapidShare, etc) where people would read as many articles in a day as they could. In addition to that, I think they would attract a wider audience by using similar paid services used by companies like Netflix.
In closing, while I think the paid system would work, the current NYTimes subscription system will fail. People do not want to pay more than 100/year for a subscription up front. Times needs to get their act together and learn from successful companies such as Apple, Grooveshark and Pandora, or people will just take the easy way out.
Jared Scott
If The New York Times can get business news and financial news to those you need that kind of information in a timely manor I think the paid service will work. For regular news articles I think that they probably will struggle in keeping ahead of the myriad of other resources that provide that information for free. Print is dying and they need to keep up with the times. I think it is a very difficult thing to decide because they need to pay their journalists and if it was completely free then they would have nothing to pay their employees. The pay model is the only way to continue, I hope it works for them.
N.P
The New York Times definitely has talented writers on staff, of course they want to keep them on staff, and the only way to do so is by increasing their revenue. In the past they had gained a $10 million revenue for another site they had launched which required a subscription fee. They ended up ending that and the number of readers increased quite a bit. I think their loyal customers will be more than happy to pay for an online subscription, many organizations already do so, however, I’m not sure if their comparison to Apple would be sufficient or not. Yes, both companies are selling a product, however, going from free to charging for access may be tough for many people. The economy hasn’t significantly improved yet, people are still cutting back on items and if reading the online paper is one of them than so be it. In regards to Apple, either you download it for free or pay for a song or a movie. Maybe it is a generational thing where younger kids are more willing to pay for songs and movies rather than news articles. Apple and the NYT’s can compare in the sense that they are selling high quality product, however, their demographics in this day and age will vary. Free will always be better than anything. Yes, we live in a world where almost everyone is on the internet however, any type of news can be found off of the internet as well. The success of this launch will be based on its loyal customers.
Nyle Watts
I’m on the fence on this issue: First, I personally wouldn’t pay for a subscription in which I can get the same information from a different source at either a less price or for free. It makes no sense, no matter how devoted I am to the newspaper or to the company. This is an economy where people want more for less, and if they can get the same news from a different source a better price than they should jump on it. However, I suppose that if so people for willing to pay for the subscription, then the New York Times should go right ahead and try to benefit themselves from it. You don’t say no to a new source of revenue, especially when people are willing to pay. And i suppose if Apple is successful in implementing a similar kind of system, the New York Times could be successful at it too.
Abiola Ogunyemi
History tells us that Newspapers have tried to be all things to all people, a model that works in a world with limited choice. But circulations have been steadily dropping for decades not because their content is poor, not because their news is irrelevant, but because people have more choice. The traditional newspaper subscription model has proven very difficult to follow online because of this choice. Not only do readers have the choice to read whatever section of the paper that tickles their fancy, most times free of charge, they have the choice to read any Newspaper article in the world. By developing a paid-services or traditional subscription, this freedom of choice is immediately mired and people are likely to find what they’re looking for elsewhere. The key word here is choice, if readers are giving a choice to subscribe to articles that they enjoy to read may be the subscription model will be a success.
Dylan B
In all honesty I think that the reason the online subscription model hasn’t worked before is because it wasn’t the New York Times doing it. This isn’t the Medicine Hat News or the Leader Post we’re talking about, its the largest newspaper in the United States. Even when they did their experiment in 2005 and made a measly 10 million dollars from online sales, THEY MADE 10 MILLION DOLLARS. I think that in order for this to work on a massive scale they’ll need to do much like itunes, and sell by the paper. Set up a newspaper app on Ipads and computers that allows me to buy one paper at a time, or set it up to automatically buy them every day. That will keep the die hards and the casual readers happy.
naismithj
I like others am on the fence with the whole “online subscription” crave whether it be the hockey news, the New York Times or In Style there is something old school in me about being able to personally turn the pages and smell the perfume samples. For frequent travellers I can see the upside in having you home town paper or specific interest magazing at your finger tips being an advantage. Then there is the debate that in using less “paper” we are saving the environment and doing a wonderful job at becoming an increasingly “green society”, however I think many people forget how long is can take to read a newspaper, not just the scores from last night and that perhaps an increase in “energy” use is actually worse for our environment. Sometimes I don’t think we look far enough into the future with our ambitious innovations…if go as far as to stop printing newspapers and the like all together doesn’t that place a large portion of the worlds people at a major disadvantage in public information?