Wednesday, January 20, 2010

NY Times: Another Brick in the (Pay) Wall

According to a Slashdot article, the NY Times has confirmed an earlier speculation that it will be placing its online content behind a pay-wall, beginning in 2011.

While many of the details and key aspects of the pay-wall system have yet to be determined, the NY Times will begin charging users who regularly visit the site each month. But for instance, it is not certain whether the pay plans will be monthly, daily, or per article/view. It does appear that occasional users will still be allowed access to a certain number of free articles.

This announcement from the NY Times, and similar past announcements from Rupert Murdoch and News Corp, concerning the institution of pay-walls for online news content may be an industry effort in futility. Can instituting a pay-wall, or removing a news site from Google's index, actually be advantageous to content owners?

I am reminded of a statement made by a panelist on the legal podcast, the Intellectual Property Colloquium, which compared the music industry to the news industry in terms of online content survival.

The panelist noted that the music industry was too late in adopting a strategy for online survival...refusing to partner with Napster during the early days, placing heavy DRM onto music legally purchased, etc. Only now does the music industry seem to be settling into an online business model that can generate enough revenue to promote content creation. [Granted there are myriad issues that still exist surrounding the music industry and online content...the current model is far from perfect (and to what degree is dependent on the evaluating perspective)]

Conversely, the news industry was too quick to open up their content and initially adopt a free online model. The general manner in which people consumed news began to evolve, and users started to access free online news content to replace, rather than supplement their daily news consumption. The free online model quickly denigrated into one that could not generate enough revenue to sustain the creation of news content [and the traditional business model itself is currently unsustainable, as people migrate online for news] .

Now, the news industry has to put the proverbial cat back into the bag, and get users to pay for something they are accustomed to accessing for free.

Unlike smaller news operations, the NY Times is clearly not under an immediate financial threat; after all, the pay-wall doesn't go up until 2011. The first attempt at a NY Times pay-wall model failed in the past...the question is, can one work in 2011? And will it be enough to ensure the survival of "premium" news content online?

1 comment:

Anonymous said...

Nice insights, Mike! The whole issue reminds me of Pandora and how they've instituted a 40-hour per month limit on how often people can use their stations. If you want more than 40 hours, cough up a couple bucks. That's not too much to ask considering 40 hours is A LOT of music.

Pay-walls make readers (and listeners) more strategical over what news they choose to consume. I think this pay-wall will turn news consumers away from companies like The Times and will move them towards the blogs that are written by the people who pay to break through the wall. Making the readership go down for the newspaper Web sites, and blog awareness and readership go up.