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New York Times considers charging for online content...
The New York Times is considering charging a $5.00 monthly fee for access to its website, according to various media reports. The decision should come sometime in August and could make the Times the first major U.S. newspaper to establish a pay-wall around its online content.
The New York Times Company stock price has taken a beating over the last year, dropping nearly 70%. And besides borrowing $250 million from a Mexican billionaire and trying to sell the Boston Globe, the Times’ debt rating was downgraded to B1, which puts it solidly in junk-bond status and makes it more expensive to borrow money for the cash-strapped newspaper.
As somebody who has advocated charging for online content in the past (here and here), I welcome this development. Of course, we have to wait for the announcement to see if the New York Times will actually make good on something that has been rumored about for the last few months.
While one newspaper’s decision to start charging for online content will not change the current crisis the industry as a whole is in, it could be a step in the right direction. I do think, however, that if the Times makes the transition to a subscription model with success, other newspapers will quickly follow suit.
Charging for online content is a tricky proposition, and any newspaper that tries it will initially lose a lot of their online traffic. But I think it is time to start looking at the long-term situation instead of the next fiscal year.
The news is free. Newspapers don’t pay anybody to do anything. Things just happen, and reporters write about them. Nobody can claim ownership of a story. So, there is not much value in covering the news, because anybody can do that. The value comes from the quality of the coverage. In a free marketplace the newspaper with the highest quality reporting bringing the most value for its readers will be successful. If people don’t want to pay for that value they will have to settle for lower quality reporting.
The New York Times Company stock price has taken a beating over the last year, dropping nearly 70%. And besides borrowing $250 million from a Mexican billionaire and trying to sell the Boston Globe, the Times’ debt rating was downgraded to B1, which puts it solidly in junk-bond status and makes it more expensive to borrow money for the cash-strapped newspaper.
As somebody who has advocated charging for online content in the past (here and here), I welcome this development. Of course, we have to wait for the announcement to see if the New York Times will actually make good on something that has been rumored about for the last few months.
While one newspaper’s decision to start charging for online content will not change the current crisis the industry as a whole is in, it could be a step in the right direction. I do think, however, that if the Times makes the transition to a subscription model with success, other newspapers will quickly follow suit.
Charging for online content is a tricky proposition, and any newspaper that tries it will initially lose a lot of their online traffic. But I think it is time to start looking at the long-term situation instead of the next fiscal year.
The news is free. Newspapers don’t pay anybody to do anything. Things just happen, and reporters write about them. Nobody can claim ownership of a story. So, there is not much value in covering the news, because anybody can do that. The value comes from the quality of the coverage. In a free marketplace the newspaper with the highest quality reporting bringing the most value for its readers will be successful. If people don’t want to pay for that value they will have to settle for lower quality reporting.
Comment
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Comment by Paul Balcerak on July 13, 2009 at 4:06pm -
@Amir - The problem with that argument is that as far as the average person is concerned, newspapers and other MSM are already biased one way or another. Besides that, value-added content has nothing to do with being politically biased—anyone can get that kind of thing for free basically anywhere on the Internet.
What would be valuable? A news site that does what journalists have always done: distill the noise. There's a lot of squawking on the 'Net and yet I don't see many news sites making an attempt at sorting out what's relevant from what's B.S. What changed all of a sudden? What happened that journalists decided they'd just bitch about how unreliable certain types of information were versus providing a public service by filtering and simplifying that information?
As far as making money...yeah, we need a new business model—so do a lot of industries. But it makes no sense to kill traffic by walling off Google (and how is that not a "long term" issue?) and delude ourselves into thinking people are so principled as to pay for news from the NYT that they can get elsewhere (anywhere) for free.
But hey, I'm not beyond compromise and I didn't just come here to kick over your sandcastle—metered content seems like something the "freebies" and pay wall supporters could both agree is at least worth trying.
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Comment by Amir Kurtovic on July 13, 2009 at 1:27pm - How exactly does one add value to journalism? Newspapers never made money because of the news. They made money because of classifieds and advertising. That was the revenue that subsidized the huge cost of having reporters and bureaus everywhere. Now advertising is down and classifieds have gone to the Internet. So adding value to the news and being differentiated is the key? Be careful what you wish for. Because adding value will probably come in the form of opinionated news articles and being differentiated will come in the form of how vicious you are in supporting a certain political point of view. Then all of our journalism will look like Fox news, which has mastered the art of adding value (what does Hannity think?) and being differentiated (Fox News alert: Obama plans to put you in a FEMA concentration camp).
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Comment by Adam Tinworth on July 13, 2009 at 12:05pm
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The era of the free Internet is coming to a close.
So all the bloggers, forum users, social networkers, YouTubers etc are suddenly going to stop producing content are they?
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I don't agree with you that people will not pay if there is a free alternative.
Well, good, because I never said that. I said that the paid alternative needs to be useful, compelling and offer something of palpable value to the purchaser before they'll switch. Just 'being better" isn't enough.
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Comment by Amir Kurtovic on July 13, 2009 at 11:34am
- Adam: I don't agree with you that people will not pay if there is a free alternative. We're not talking about selling bread or eggs. Newspaper, or "news organizations", exist because of their credibility and quality that makes them trustworthy sources of news. That trust is worth a certain amount of money. How much it is worth and how people want to pay for it online is still not clear, but if we are scared to charge money for the news it seems that we do not value our contribution to society enough. I think we need to take the advice of the Joker on this one: "If you're good at something never do it for free."
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Comment by Jason Molinet on July 13, 2009 at 11:20am - The era of the free Internet is coming to a close. And the good people of this site -- of all people -- need to get on board with it. Do you want a paycheck and job security or not?
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- The problem with that argument is that, if the free reporting is good enough, it doesn't matter how good the paid reporting is. People won't pay for something against a free competitor simply because it's better than the free offer - it needs to add something they want (and preferably need) that the free doesn't have.
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