NY Times confirms charging for web content - but it won't work

As flagged by NBR on Monday, The New York Times is to charge for access to its website.

From “early 2011”, those who don’t pay will only be able to read a limited number of stories per month, New York Times Company chairman Arthur Sulzberger Jr said today.

The paper has yet to reveal how many stories per month non-paying punters will be allowed to view, or what it will cost for unlimited access.

All print subscribers will automatically be given full access to nytimes.com.

This so-called “metered” paywall approach - also followed by the Pearson-owned Financial Times in the UK - was chosen over a second seriously-considered alternative: a mix of paid and unpaid stories as per Rupert Murdoch’s The Wall Street Journal (or indeed NBR).

Cautious timetable
It had been rumoured that Apple’s tablet device, unveiled next week, would have some kind of tie-in to the Times’ paid content foray.

But with the paper still a year away from launch, there’s obviously now no possibility of the biggest newspaper site being part of the launch.

In its story today, the paper quotes its executives as saying they’re not bothered about talking barbs about delays, and being overly cautious.

“There’s no prize for getting it quick,” said Janet L. Robinson, the company’s president and chief executive. “There’s more of a prize for getting it right.”

Online advertising will never hit full tilt
A quick recap from Monday:

Before the recession, the forces of free held sway at The New York Times.

With around 20 million unique browsers, it had become the paper of record for the English speaking world, putting it in the plumb position once online advertising finally matured.

But with online advertising stalling and falling during the meltdown, Times chairman Arthur Sulzberger Jr has, apparently, veered more toward those who believe the web will never generate significant ad revenue according to a report in New York magazine.

Five billion reasons
Certainly, some kind of fix is required.

Despite building one of the world’s most popular sites, the family-controlled, publicly-listed New York Times Company (NYSE: NYT) has seen its market cap slip from around $US7 billion in 2002 to under $US2 billion today.

For its third quarter, announced in October last year, the Times lost $US25 million on total revenue was down 17% to $US571 million.

Advertising revenue fell 27% to $US291 million, and the online advertising portion was down 8.2% to $US68 million. 

Sure, online advertising revenue fell less - but it was still relatively paltry given the online edition's overwhelming advantage in readership.

A previous attempt at introducing paid content at the Times was tepid, throwing a wall around a handful of star columnists like Maureen Dowd (in the manner of the one-time NZ Herald experiment).

This time, paid content will return on an industrial scale.

Would it work?
Will paid content fly for the Times?

I'd love it if it did, but I don't think it's wildly optimistic.

People will pay for content they think will help them make money (see some of the numbers and arguments around NBR’s paywall here). But mainstream news? Not happening.

Well-resourced rivals from CNN to The Washington Post will be relishing the opportunity to steal readers from the Times - and they likely will.

Mr Sulzberger has obviously decided that there's no point being biggest if you only lose buckets of money, and online advertising only yields a tiny fraction of its equivalent in print.

But in an online world where mainstream news scoops are matched by rivals almost instantly, it's very difficult to see people signing up for paid Times content en masse.

Will other mainstream news publishers follow?
Mr Sulzberger's big hope has to be that other mainstream publishers will match his company's move.

But here, I think there's been a lot of gamesmanship on Rupert Murdoch's part - in an attempt to pressure Google or Microsoft into an exclusive search ad indexing deal, perhaps - and, at least so far, not a lot of serious intention to put a paywall, or micropayments or metering, around his mainstream properties.

Still, it's going to be a fascinating - and, for some, do or die - next 12 months.