The New York Times Company announced Wednesday that it intends to charge frequent readers for access to its Web site, a step being debated across the industry that nearly every major newspaper has so far feared to take.
The new approach, referred to as the metered model, will offer users free access to a set number of articles per month and then charge users once they exceed that number. The company says it will keep an appropriate ratio between free and paid content and stay connected to a search-driven Web.
Starting in early 2011, visitors to NYTimes.com will get a certain number of articles free every month before being asked to pay a flat fee for unlimited access. Subscribers to the newspaper’s print edition will receive full access to the site.
NYTimes.com is by far the most popular newspaper site in the country, with more than 17 million readers a month in the United States, according to Nielsen Online, and analysts say it is easily the leader in advertising revenue, as well. That may make it better positioned than other general-interest papers to charge — and also gives The Times more to lose if the move backfires.
According to the Sulzbergers’ memo to staff:
Since NYTimes.com is, by a variety of standards, one of the world’s most popular and successful news Web sites, why are we changing our model at all?We are doing so because we believe that a second revenue stream will be an important part of our future. While digital advertising will continue to be the major contributor to our success on the Web, we expect that online subscription revenue will improve our ability to grow an important part of this business.
Still, publishers fear that income from digital subscriptions would not compensate for the resulting loss of audience and advertising revenue.
Executives of The New York Times Company said they could not yet answer fundamental questions about the plan, like how much it would cost or what the limit would be on free reading, says a NY Times reporter. They stressed that the amount of free access could change with time, in response to economic conditions and reader demand.
Any changes are sure to be closely watched by publishers and other purveyors of online content who scoffed at the notion of online charging until advertising began to plummet in 2007, battering visions of Internet businesses supported solely by ads. Few general-interest publications charge now, but many newspapers and magazines are studying whether to make the switch.
It’s hard not to see this announcement in light of Apple’s upcoming tablet computer, says TechCrunch, and a slew of content partnerships with major publishers, likely including the New York Times.
Five major publishers recently announced a new digital publishing venture often called a Hulu for publishers. The publishers include Time Inc, Condé Nast, Meredith, Hearst and News Corp, who will be equity partners. They expect to develop open standards for cross-platform e-reader technology, advertising and digital sales, explains Paid Content. Together, the five companys represent an unduplicated audience of 144.6 million.
The New York Times Company, with 2008 revenues of $2.9 billion, includes The New York Times, the International Herald Tribune, The Boston Globe, 15 other daily newspapers and more than 50 Web sites, including NYTimes.com, Boston.com and About.com.
