The New York Times drew a line in the sand earlier this year by announcing its decision to start charging for access to its website. But it will be a year until the plan comes to fruition and New York Times brass have been tight lipped on the details. Part of the reason for that is simply because they haven't decided what they will be charging for and when.
Today at paidContent 2010, three of The Times' top execs elucidated on where they're heading with the metered model. And while they're interested in remaining an influential, widely read newspaper, if the revenues move in a certain direction, The New York Times could be a niche newspaper in the near future.
The details of The Times' metered pay system (don't call it a pay wall), will depend largely on consumer behavior. A few articles a month will be available for free, but the number of articles and the price of a subscription is yet to be determined.
According to The Times, it will be a delicate balance between selling ad space and charging subscribers that will help grow revenues.
But it is a given that The Times will lose readers when it starts charging. Arthur Sulzberger, the publisher of The Times, says that a smaller readership won't necessarily limit the paper's relevance.
"I think you lose relevance when you stop producing content of high quality. The New York Times has never been the largest newspaper in NY," says Sulzberger. But he doubts that few people would question that it's the most relevant. "It's not about mass reach."
But will the paper be content to massively shrink its reach if revenues could be sustained by charging a small audience high subscription rates?
According to Martin Nisenboltz, SVP of digital operations, the Times thinks it can have it both ways. "The purpose of the model is to maintain a very large reach. The New York Times is largest newspaper website in the world" and it intends to maintain a large reach. The paper's executives think that the publication can sustain a paywall now because so many consumers have come to rely on the paper as an international news source.
"We have reached a point where we have enough scope and scale to make this move. Our hope is that the idea of the metered model will allow us to remain a very very large website at the same time as we get a second revenue stream."
The paper isn't expecting revenue to grow much in the first year of the pay wall's existence, but does plan to tweak the model until the paper brings in optimal revenues.
"Our goal is to maximize revenues. The meter has to do with inventory management," says Nisenholtz. If the Times "moves the meter in," they will get more subscribers and less advertising inventory. As Nisenboltz puts it: "We intend fully to grow advertising business for as long as we need to. The model has to be maximized for overall total revenue. got it?"
That's the arguement the Times gives for killing Times Select, its previous attempt at charging for content. Says Sulzberger:
"We were making good money with Times Select. We just decided we could make more if we took it down."
As of right now, Times execs expect all content to go behind the pay wall. That includes news, editorial and even blogs. And for those hoping that a subscription to The Times website will extend across other platforms, it isn't likely. Content on the Kindle and the iPad will likely be separate propositions.
According to Sulzberger, "You can't create a system to please 5-7%."
However, it remains to be seen whether the new system will please a majority of The Times' readers (or win over new subscribers). The paper is banking on its core subscriber base to pony up for web access. And they point to their readership numbers to prove this point. While a large percentage of readers come from search engines, those readers often leave quickly and aren't bringing in the majority of pageviews.
Says Nisenholtz: "60% of our visitors come through the homepage. The vast majority of visitors who read more than 10 articles per month come through homepage."
But some are unconvinced. London's Guardian newspaper has a free website and the paper's head of digital, Emily Bell, had a question for the panelists:
"Is this a digital plan to increase subscribers? Or is this a plan for supporting print for as long as possible?"
Image: New York Times