What’s the new incentive of The New York Times?

by on March 18, 2011 at 9:14 am in Economics, Uncategorized | Permalink

Don’t ask me to explain all the details of the pay wall system (can’t people set up rotating faux blogs and tweets, rich with daily NYT links, to get around the limits?), but I know there will be an articles quota, twenty per month.  So the new NYT incentive is to have more than twenty must-read articles each month.  Maybe they’re hire Bill Simmons.  Maybe they’ll support more blogs.  Maybe they’ll keep their reporters in the field and cover more controversial science topics.  The best case outcome is that the infovores find tricky ways through the pay wall, some of the non-paying non-infovores spend more time on yahoo.com, some of them pay up, while the quantity and quality of good content increases.  I wouldn’t bet on that, but most of the analysis I am reading does not focus on how the supply side will change.  The NYT arguably will be running fewer cliched or predictable or easily substitutable articles.  It should make the paper less comprehensive, but sharper at the edges.

The incentive of NYT writers to keep blogs — so people can access their columns easily — will go up.

Via The Browser, Vanity Fair adds comment.  On this topic, Felix Salmon is always a must.

Dean Sayers March 18, 2011 at 9:38 am

What I find more intriguing about the NYT is that it has been deeply embedded with the Democratic party ever since the 1932 bloc of Democratic investors coalesced. This is briefly discussed in Ch 2 of Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems, a good read for anyone interested in the history of government and finance in the US.

It will be interesting to see how their new business model plays out – if anything, I think it may diminish their role in politics, if only marginally.

Rahul March 18, 2011 at 9:39 am

I doubt you need tricky ways to beat the paywall. Refspoof, the firefox plugin, should do the trick.

http://refspoof.mozdev.org/

Makes the browser “pretend” that you’ve been referred by google or twitter etc. Can’t test it yet, so caveat emptor. I have’t hit the paywall yet. I can’t believe they spent $40 million on developing this paywall.

Spoofy does the same thing for Google Chrome:

https://chrome.google.com/extensions/detail/kkcdhmhggbdgjiehnfkdklfegjlhjfmh

One thing that isn’t clear to me is how NYT is going to know which is a “blog” referrer for free access; do we have to register our blogs with NYT?

Rahul March 18, 2011 at 10:10 am

The spam-czars blocked my post but try Refspoof (Firefox) and Spoofy (Chrome). Should work around the paywall.

DK March 18, 2011 at 11:50 am

Better yet in Firefox:
network.http.sendRefererHeader = 0

DanC March 18, 2011 at 9:47 am

Odd pricing, interesting implications for how the NYT views various market segments. Rather then charge higher upfront prices I would have thought they would have offered various bundles. Perhaps they want to convince advertisers that NYT online readers are upscale consumers. Prices are, it appears, way above marginal cost. Perhaps the NYT has done a lot of research on the pricing strategy. Maybe they are just throwing it against the wall to see what sticks.

Too high for me to pay. Unless I buy a NYTimes Sunday subscription for a friend in New York to get cheaper online access.

Alex Tabarrok March 18, 2011 at 10:00 am

The usual procedure is to increase quality and then increase price.

blah March 18, 2011 at 12:33 pm

Is that your strategy with your blog posts? Seems about right.

Ted Craig March 18, 2011 at 10:01 am

Felix Salmon isn’t a must read on this topic because I already know what he’s going to say – he opposes pay walls. He also displays ignorance of his topic by finding it “slightly odd” that it’s a better deal to subscribe to the local print edition to gain online access. That’s not odd at all. The Times, for various reasons, needs to keep the printing plant going and its worth it for the company to have people pay for a useless print subscription.

charlie March 18, 2011 at 10:12 am

double that — increased print subscription numbers keep print advertising healthy longer as well.

Isn’t the real answer, though, is to turn the print into a luxury edition. Certified organic newsprint. Custom cotton bags, delivered by real humans? Hmm, the smell. FT already does that to some extent.

Rahul March 18, 2011 at 10:21 am

I wish they’d tie up with some airlines and hotel-chains. I hate the fluffy “US News” and its ilk that I keep getting on planes, airports and hotel rooms.

gigi March 18, 2011 at 6:51 pm

Best suggestion ever!

Dan Thayer March 18, 2011 at 10:30 am

I think the ease of getting around this paywall is a feature, not a bug. The ideal for The Times is to charge people who are willing to buy a subscription, yet to still allow unlimited free access to those who are unwilling to pay. The best paywall, then, is not the most secure one, but the most porous one that still appears to credibly limit access. My guess is that this system will be enough–most of those willing to buy a subscription are not going to mess around with spoofing or searching Google to find articles.

Slocum March 18, 2011 at 10:56 am

Yes — from that perspective, it seems like pretty standard price discrimination. Sell low to those people who have the knowledge and are willing to put in the time and effort to bargain-hunt. Sell high to people who don’t know how to find the bargains or for whom it’s not worth the trouble.

Brett March 18, 2011 at 11:14 am

My guess is that this system will be enough–most of those willing to buy a subscription are not going to mess around with spoofing or searching Google to find articles.

I’m not so sure about that. The Times meter is fairly generous compared to other ones (20 articles a month, more if you come through social networks or google), so only the smaller population of “heavy-users” are going to be breaking through that limit. Those heavy-users tend to be the same type of people who are likely willing to use google or the “delete cookies” trick to get around the meter.

Moreover, the NYT doesn’t really have anything specific to offer that it does better than other papers – it’s a “general-purpose” paper. The Wall Street Journal gets away with a paywall because it offers certain types of financial news.

Bill Harshaw March 18, 2011 at 10:59 am

Bloggers who already subscribe to the print version have a small incentive to link to NYTimes articles?

wjg March 18, 2011 at 11:34 am

“Readers who come to Times articles through Twitter will be able to read those articles, even if they have reached their monthly reading limit. Coming soon..”
http://twitter.com/freenyt/

DK March 18, 2011 at 11:47 am

Not that I see any reason to read that many articles in NYT, but how are they going to enforce it? By IP? Hello, most IPs are dynamic. Through cookies? One would think that NYT readers are capable of deleting cooking and clearing cache. What else?

Ryan Vann March 18, 2011 at 1:21 pm

Probably a subscription account. Anyway, if this sort of DLM/DLC approach to print catches on, and is any way similar to the hassle it has been in videogames, I’m out.

Brendan March 18, 2011 at 11:55 am

FYI – Articles that you are linked to will be viewable no matter how many you have read before, and the twitter feed @freeNYTimes will be linking to various articles throughout the day

Thomas March 18, 2011 at 12:10 pm

I’m a heavy NYTimes.com reader. So heavy that I let my WSJ.com subscription lapse. The WSJ isn’t part of the blog conversation because of their paywall, but otherwise it is a good source for news. In my view, it’s better on business and finance news and more interesting on culture, while not as comprehensive as the Times. But I can get a WSJ subscription–paper and web–for a little over a $100 per year. So I’m going back.

mulp March 18, 2011 at 12:18 pm

How do you get the WSJ in both web and paper for a hundred a year???

nelsonal March 18, 2011 at 3:30 pm

I just threaten to cancel and they offer that right away.

Thomas March 18, 2011 at 3:42 pm

I think they refer to it as a “professional discount.” Lots of opportunities for a low cost subscription.

mulp March 18, 2011 at 12:16 pm

I find the reaction to a producer charging consumers curious for an economics blog.

I imagine you talking about a food market where the farmers, who traded freely with each other, and tolerated the non-farmer city dwellers who simply took without contributing, deciding to charge for the food they brought to market. You would be talking about how people would refuse to pay and would return to tending their own gardens, or walking the byways and foraging for poke salad, or going to other free markets that didn’t charge, or simply stop eating.

And what is the alternative? Which news organization gets by without its customers paying? Certainly not any of Murdock’s businesses from the WSJ to Fox – Fox is charging cable networks to carry it content and they charge their cable customers. This is a reversal from the days when broadcasters sought FCC mandates to force cable companies to carry their free OTA broadcasts. (Fox was the startup in those days with less content than Ted Turner’s Superstation.)

The alternative for the NYTs and others is to continue cutting the money spent on reporting – reducing quality – or going out of business, or probably both. And which free web news source is as robust as the NYTs other than NPR, PBS, BBC, DW, et al? And I pay a dollar a day to help provide free web and radio access to NPR’s news which is in addition to George Soros charitable grants to NPR. Is the alternative going to be the “news” funded by the likes of the Koch brothers at Cato and Heritage?

And it is interesting that free buses funded by taxes or business district fees is slammed here rather often, not one argues that free buses aren’t needed because cars and gasoline are free, so you can’t charge a fare for a bus ride because people will switch to their free cars to get around.

Yancey Ward March 18, 2011 at 12:28 pm

It must be driving certain people nuts that the WSJ and Fox manage to actually make money charging for things while outlets like The New York Times are struggling to find ways to keep from going bust.

Mulp,

If your hypothetical situation really existed, economists might very well make the arguments you imagine, but since it doesn’t, there is no reason to address it. This situation is quite real, and it is questionable whether or not the paper’s business model makes any sense with the changes in technology.

Rahul March 18, 2011 at 1:26 pm

@mulp:

Most of the comments here are not arguing about the social desirability of free versus pay-wall. The question is whether or not the NYT can pull it off i.e. is it a smart business decision? You talk about “going out of business” as a potential risk of continuing to not charging users. Could be. But charging users and the resulting loss of readership could come with the same risk too. Keep in mind that NYT’s revenues from digital advertising are huge and any loss of viewer-ship is going to bite hard.

Brian J March 18, 2011 at 12:37 pm

There’s been a lot of huffing and puffing about the pricing strategy, a lot of which makes sense. But as I said at DeLong’s blog, they need time to figure this out. It’s fairly easy to make pricing changes quickly, so it’s not like they need to be wedded to a failing strategy, if it’s revealed as such, for a long time.

As far as the content goes, I’m curious to see how the paper react once it is earning a profit on these moves. How will it reinvest in the paper? DealBook, which is supposedly very profitable for The Times, has expanded recently; will it continue to expand? The Times has also expanded into San Fransisco, Chicago, and Texas through non-profit means to become a little more national; will it do more locations, either through its own staff or through a partnership? Will the editors choose to focus on general reporting, or something a little more detailed? If the paper succeeds in hitting up its top users of heavy content while remaining relatively open for others and uses this revenue to stand out and zig while others zag, it will probably be a very wise move. Simply put, it just needs to use any extra revenue to make the paper worth paying for.

Adam March 18, 2011 at 1:43 pm

Fewer cliched and easily substitutable articles? I think that’s a little optimistic. How about more celebrity gossip and fluff that pulls in clicks to get readers up over the quota?

Meanwhile on the demand side, I will not pay. Period. There are good, free substitutes for everything they do.

Adam March 18, 2011 at 3:35 pm

How about supporting journalism rather than free loading for a change

Thomas March 18, 2011 at 3:45 pm

Wait, am I supposed to feel guilty that I’ve been reading a website they supplied for free all these years?

Dan Weber March 18, 2011 at 3:40 pm

That boing-boing article was pretty lame. “I’m gonna build a service that redirects around the paywall!” is just silly. It reminds me of teenagers on reddit who threaten to pirate software or movies if their desires aren’t perfectly catered to. There won’t be extreme measures taken by the NYTimes to stop people, either, for the reasons that Dan Thayer mentioned.

In the real world, though, I expect I will browse the NYT as much as I did before, and then stop when I hit the paywall. It wont be worth the bother to pay, and it won’t be worth the bother to try to work around any countermesures they set up.

In a way this is a shame. I’d be willing to pay for news if I had to, but there is so much available for free I can’t yet conceive of the value-add the Times could add.

Walter McGrain March 18, 2011 at 4:06 pm

To me this is equivalent to asking for donations. There will be enough “noble” people out there who will subscribe, (i.e., donate) that the NYT will be willing to live with people getting around the pay wall.

Most people run AdBlocker, but the target audience for most of the junk advertised on the internet is just those people not smart enough or too lazy to install one. I don’t feel guilty about running an AdBlocker because I am saving the bandwidth of the companies serving up ads. Why should they pay for me to see something I’d never dream of buying anyway? Win-win.

With the NYT there are enough people willing to pay an feel good about it, that it fills in for those who can’t afford it or would be happy to get the equivalent news elsewhere. Again win-win.

Rahul March 18, 2011 at 4:13 pm

I wonder how much they’d make if they put a “Donate” button like some free software projects do. Or like wikipedia.

Ed March 18, 2011 at 4:26 pm

Not only is the paywall strategy questionable in itself, this is being implemented in absurdly convoluted way. Its actually beautiful in the way that a product of a self-defeating bureaucracy can be beautiful.

I’ve not paid for a copy of the Times for several years, but I’ve read paper copies for free numerous times and I’ve usually seen nothing I’ve wanted to pay for. There has been a decline in quality. The time to do this was in the late 80s or early 90s when the paper was better and the internets were just beginning.

Mulp makes a good point, but I think the “big private news organizations that publish news and charge for it model” is turning out to be a historical anomaly. That doesn’t mean that there won’t be news in the future, it will just be the mixture of rumor and official government announcements that constituted “news” throughout most of history.

Brad March 19, 2011 at 3:46 am

Strange enough, the concept of making the NYT.com a non-profit and making donations, makes sense. I would chip in a couple of bucks if they posted ads saying they needed to raise six million to keep the news free.

Mike Billy March 20, 2011 at 9:47 pm

I guess I won’t be reading Economix anymore.

Brett March 21, 2011 at 11:30 am

That actually would be a loss. Their commentary is only okay, but they frequently have cool charts and tables of useful data on a variety of economic subjects.

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