Meissner Research Group

The New York Times announced this week that they would again charge customers for online services. In this new system, non-subscribers (subscribers to the newspaper will have full access to online content) can read a handful full of free articles a month, but after using their allotment, will be forced to pay for an unlimited online subscription. Or, at least, wait until the next month.

This move comes as a form of déjà vu, as this is similar to a failed plan for The New York Times from 1996 that attracted only 4,000 subscribers. After several attempts at paid online services, the Times went free, hoping to attract enough advertisers to cover costs, but because of the recession, they’ve spent the last year developing new plans. The company released a statement containing the reasoning that this will enable NYTimes.com to create a second revenue stream and preserve its robust advertising business. Janet L. Robinson, CEO of The New York Times Company, added (The Times to Charge for Frequent Access to Its Web Site, New York Times, January 20^th, 2010):

We were also guided by the fact that our news and information are being featured in an increasingly broad range of end-user devices and services, and our pricing plans and policies must reflect this vision.

With the creation and mainstreaming of portable devices, like the Apple iPhone and the imminent iPad, that can read the Times anywhere and can fit in your pocket, the Times, and all newspapers like it, must evolve. This leaves the question of while the company will spend 2010 building an infrastructure for this program, can they ever hope to keep up with the changing ways newspapers are read and still manage to charge people. Arthur Sulzberger Jr., the company chairman and publisher, responded:

This is a bet, to a certain degree, on where we think the Web is going. This is not going to be something that is going to change the financial dynamics overnight.

The New York Times is taking what might be viewed as a risky move in the already embattled journalism field. However, the time of the announcement is to be lauded. With the announcement of the Apple iPad next week, this is the best timing to make users view content in a different way. This often is the key to a price increase, introducing a different version or modification of the product. Customers will, more often than not, walk away from raised prices, especially in the case of the Times, since the product used to be free. By allocating their content into something that the customer can see as having actual benefit (like being able to access it anywhere), then the Times may have a chance to attract customers while they were unable to do so before (when portable devices didn’t exist). So, while the timing is perfect, it remains to be seen whether the action pays off big or the free-for-all online culture will prevail.