The New York Times rolled out a plan on Thursday to begin charging the most frequent users of its Web site $15 a month in a bet that readers would pay for news they have grown accustomed to getting free. Beginning March 28, visitors to NYTimes.com will be able to read 20 articles a month without paying, a limit that company executives said was intended to draw in subscription revenue from the most loyal readers while not driving away the casual visitors who make up the vast majority of the site’s traffic.
Once readers click on their 21st article, they will have the option of buying one of three digital news packages — $15 every four weeks for access to the Web site and a mobile phone app; $20 for Web access and an iPad app; and $35 for an all-access plan.
All subscribers who receive the paper through home delivery will have free and unlimited access across all Times digital platforms except, for now, e-readers like the Amazon Kindle and the Barnes & Noble Nook. Subscribers to The International Herald Tribune, which is The Times’s global edition, will also have free digital access.
“A few years ago it was almost an article of faith that people would not pay for the content they accessed via the Web,” Arthur Sulzberger Jr., chairman of The New York Times Company, said in his annual State of The Times remarks, which were delivered to employees on Thursday morning.
“This move is an investment in our future,” he said. “It will allow us to develop new sources of revenue to support the continuation of our journalistic mission and digital innovation, while maintaining our large and growing audience to support our robust advertising business. And this system is our latest, and best, demonstration of where we believe the future of valued content — be it news, music, games or more — is going.”
Mr. Sulzberger acknowledged the hurdles The Times must overcome in the minds of many readers, saying he harbored no misconceptions.
“The challenge now is to put a price on our work without walling ourselves off from the global network, to make sure we continue to engage with the widest possible audience,” he said.
Not all visits to NYTimes.com will count toward the 20-article limit. In an effort to ensure that as many as possible of the Web site’s more than 30 million monthly readers are not deterred from visiting, The Times will allow access to people who visit through search engines like Google and social networking sites like Facebook and Twitter. There will, however, be a five-article limit a day for people who visit the site from Google.
The 20-article limit begins immediately for readers accessing NYTimes.com from Canada, which allows the company time to work out any software issues before the system goes live in the United States and the rest of the world. The prices and other terms will be the same worldwide, and users will be able to pay with credit cards or by PayPal.
For years, newspaper companies have been offering Web access free in hopes that the online advertising market would look after their costs. But while online advertising has grown, it has not increased quickly enough to make up for the decline in traditional print advertising. So many publications have been looking at ways to make online consumers pay as they do for print.
The debate consuming the newspaper business now centers on the question that The Times hopes to answer: Can you reverse 15 years of consumer behavior and build a business around online subscriptions? Many believe the answer is no.
No American news organization as large as The Times has attempted to put its content behind a pay wall after allowing unrestricted access. The move is being closely watched by anxious publishers, which have warily embraced the Web and struggled with how to turn online journalism into a profitable business.
“This is practically a do-or-die year,” said Ken Doctor, an author who studies the economics of the newspaper business. “The financial pressures on newspapers is steady or increasing. They’re in an industry that is still receding. Newspapers are trying to pay down their debt, but they have fewer resources to do it. They’re very cash-flow constricted.”
The model The Times is putting in place, Mr. Doctor said, represents a recognition among some newspaper owners that a successful online business model rests on a relatively small portion of highly engaged readers as opposed to a high volume of page views.
“What matters is, how can you attract a sizeable group of core readers who are loyal to your news brand and get most of them — not all of them — to pay for access? And that’s the core of the new business,” he said. “It’s a major shift in psychology.”
The fragile condition of the industry has left newspapers with few other choices. Even as other media have recovered, newspapers have seen little bright side from the end of the recession.
Advertising revenue for American newspapers in 2010 — including digital and print — fell 6.3 percent, to $25.8 billion, compared with 2009, which had been the worst year on record as measured by the Newspaper Association of America. Consumer magazines, by contrast, posted a 3.1 percent increase in ad revenue for 2010, pulling in $20.1 billion.
At The New York Times Media Group, which includes The International Herald Tribune, ad revenue declined 2.1 percent in 2010, to $780.4 million.
Other newspapers, most of them small local papers, have implemented a metered or “freemium” system similar to the one The Times is implementing.
Some, like The Commercial Dispatch in Mississippi and The York Daily Record in Pennsylvania, are using an approach designed by Journalism Online, which is working with a variety of models that set the number of free articles readers can view from five to 20 each month. Papers have charged monthly subscription fees of around $3.95 to $10.95.
The Dallas Morning News started putting much of its content behind a less porous pay wall last week, an approach similar to what The Wall Street Journal does with its Web site, where selected content is free but everything else is available only to subscribers.
The Financial Times, based in Britain, uses an approach similar to what The Times is adopting. It sells online-only subscriptions starting at $19.96. Rob Grimshaw, managing director of FT.com, said the Web site now has 210,000 digital subscribers — more than half the 400,000 who subscribe to the print edition.
Once readers click on their 21st article, they will have the option of buying one of three digital news packages — $15 every four weeks for access to the Web site and a mobile phone app; $20 for Web access and an iPad app; and $35 for an all-access plan.
All subscribers who receive the paper through home delivery will have free and unlimited access across all Times digital platforms except, for now, e-readers like the Amazon Kindle and the Barnes & Noble Nook. Subscribers to The International Herald Tribune, which is The Times’s global edition, will also have free digital access.
“A few years ago it was almost an article of faith that people would not pay for the content they accessed via the Web,” Arthur Sulzberger Jr., chairman of The New York Times Company, said in his annual State of The Times remarks, which were delivered to employees on Thursday morning.
“This move is an investment in our future,” he said. “It will allow us to develop new sources of revenue to support the continuation of our journalistic mission and digital innovation, while maintaining our large and growing audience to support our robust advertising business. And this system is our latest, and best, demonstration of where we believe the future of valued content — be it news, music, games or more — is going.”
Mr. Sulzberger acknowledged the hurdles The Times must overcome in the minds of many readers, saying he harbored no misconceptions.
“The challenge now is to put a price on our work without walling ourselves off from the global network, to make sure we continue to engage with the widest possible audience,” he said.
Not all visits to NYTimes.com will count toward the 20-article limit. In an effort to ensure that as many as possible of the Web site’s more than 30 million monthly readers are not deterred from visiting, The Times will allow access to people who visit through search engines like Google and social networking sites like Facebook and Twitter. There will, however, be a five-article limit a day for people who visit the site from Google.
The 20-article limit begins immediately for readers accessing NYTimes.com from Canada, which allows the company time to work out any software issues before the system goes live in the United States and the rest of the world. The prices and other terms will be the same worldwide, and users will be able to pay with credit cards or by PayPal.
For years, newspaper companies have been offering Web access free in hopes that the online advertising market would look after their costs. But while online advertising has grown, it has not increased quickly enough to make up for the decline in traditional print advertising. So many publications have been looking at ways to make online consumers pay as they do for print.
The debate consuming the newspaper business now centers on the question that The Times hopes to answer: Can you reverse 15 years of consumer behavior and build a business around online subscriptions? Many believe the answer is no.
No American news organization as large as The Times has attempted to put its content behind a pay wall after allowing unrestricted access. The move is being closely watched by anxious publishers, which have warily embraced the Web and struggled with how to turn online journalism into a profitable business.
“This is practically a do-or-die year,” said Ken Doctor, an author who studies the economics of the newspaper business. “The financial pressures on newspapers is steady or increasing. They’re in an industry that is still receding. Newspapers are trying to pay down their debt, but they have fewer resources to do it. They’re very cash-flow constricted.”
The model The Times is putting in place, Mr. Doctor said, represents a recognition among some newspaper owners that a successful online business model rests on a relatively small portion of highly engaged readers as opposed to a high volume of page views.
“What matters is, how can you attract a sizeable group of core readers who are loyal to your news brand and get most of them — not all of them — to pay for access? And that’s the core of the new business,” he said. “It’s a major shift in psychology.”
The fragile condition of the industry has left newspapers with few other choices. Even as other media have recovered, newspapers have seen little bright side from the end of the recession.
Advertising revenue for American newspapers in 2010 — including digital and print — fell 6.3 percent, to $25.8 billion, compared with 2009, which had been the worst year on record as measured by the Newspaper Association of America. Consumer magazines, by contrast, posted a 3.1 percent increase in ad revenue for 2010, pulling in $20.1 billion.
At The New York Times Media Group, which includes The International Herald Tribune, ad revenue declined 2.1 percent in 2010, to $780.4 million.
Other newspapers, most of them small local papers, have implemented a metered or “freemium” system similar to the one The Times is implementing.
Some, like The Commercial Dispatch in Mississippi and The York Daily Record in Pennsylvania, are using an approach designed by Journalism Online, which is working with a variety of models that set the number of free articles readers can view from five to 20 each month. Papers have charged monthly subscription fees of around $3.95 to $10.95.
The Dallas Morning News started putting much of its content behind a less porous pay wall last week, an approach similar to what The Wall Street Journal does with its Web site, where selected content is free but everything else is available only to subscribers.
The Financial Times, based in Britain, uses an approach similar to what The Times is adopting. It sells online-only subscriptions starting at $19.96. Rob Grimshaw, managing director of FT.com, said the Web site now has 210,000 digital subscribers — more than half the 400,000 who subscribe to the print edition.
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