Filed Under: media, technology
Published On: January 20, 2010
The New York Times recently put the rumor that they were going to erect another pay wall around their website to rest…by admitting that they are going to erect another pay wall around their site. And there’s a lot of heated discussion going on about this right now. Are they right? Are they wrong? Running the New York Times obviously costs a lot of money, and they do it well, which is why the Old Gray Lady is one of the most respected names in the media business.
But it’s a move doomed to failure. Here’s why. Information. Lots of it. Gobs of it. Today’s media landscape isn’t measured in column inches, but rather in conversations. The content of the New York Times might be the start of many of those conversations, but they rarely (if ever) manage to keep them going at the New York Times. Instead, the stories and links get passed around, take place elsewhere, spread around the net in viral tides.
And that bothers the New York Times. Not like this is a new development. Newspapers, like books, have always been shared between readers. “Hey are you done with the sport section? Yeah, trade you for the business section.” The problem is that kind of sharing is limited by scarcity. Not so online. Neither is the competition. People who do things better steal eyeballs who otherwise would have read a section of a newspaper.
Need a new futon? Craigslist that shit.
Ditto for a job.
What’s the score of the game? There’s only a million or so sites that can tell you that right now, plus give you tons of information beyond the score because all they do is sports.
Ditto for cooking, entertainment, politics, culture, and even neighborhood news.
So, instead of competing with these specialized venues (probably a bad idea) or turning the New York Times website into a destination for conversations (probably a good idea, destinations mean pages views, pages views mean ad revenue, ad revenue means continued employment), the Times went for option C – what I like to call “Hide behind a wall.”
And here’s how Option C is going to work out. At first, a lot of loyal subscribers will sign up. The initial numbers might even look promising. People are paying and coming into the castle. “We’re saved!”
You aren’t.
Your good stories, the real winners, will leak out. Everyone will read them, however they’ll completely ignore the rest of the New York Times. Your overall page impressions will fall. So will your ad revenue. Suddenly, your only source of income will be your subscribers.
And that leads us to part two. Subscribers will stop growing. Quickly. Bringing new subscribers in after that first generation will be harder. Keeping subscribers will be harder. After you erect a pay wall, there’ll be an initial vacuum in the news market. Your brand is now focusing inward, and all your former readers who wouldn’t pony up the cash few an online subscription? They’ll move on. Someone else will get them.
Eventually, your brand loyalty will wane. Current subscribers will start to leave. Getting new customers will become nigh impossible. You’ll be forced with two options – raise prices or innovate. Raising prices will drive more customers away and make getting new ones even more difficult. Innovating, well, we’ve already seen the Old Gray Lady thinks of that.
And if you still think this whole pay wall thing is a good idea? Why don’t you talk to the folks who were in charge way back in 2007, when you ended your other pay wall – TimesSelect.
-
Mariane
