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.
Harper Studio posed an interesting question – should newspapers, on the verge of closings and bad news, adopt a nonprofit or stance? This rebuttal was given at HarperStudio’s blog, but I thought I’d include it here as well.
The idea of a nonprofit, and thus editorially uncompromising newspaper sounds like a wonderful idea. However, the two primary comparisons – NPR and Wikipedia – are poor choices. Looking at current business methods that would require tailoring to fit right, rather than creating a new method which would be better suited for the unique scenarios that newspapers face.
Wikipedia, for all of its wonder and uses, has a much different cost structure than a newspaper. The number of people on staff is small, a mere fraction compared to those who contribute as editors and writers. Wikipedia also exists in a market where scarcity is not a concern – as long as the servers are online, and the hosting bills are paid – anyone who wants to read Wikipedia can. Even with these digital advantages, the Wikimedia Foundation still found itself begging for money to reach their relatively low $6 million goal for fiscal 2008.
NPR, which is arguably closer to the newspaper in terms of cost-structure, relies heavily on income derived from affiliates, whom are charged rates in the millions just to broadcast on an annual basis. This helps by evening out the chances for failure by putting a greater financial emphasis on fewer, more interested and invested people. However, even conducting business in this way hasn’t made NPR a pillar of strength. In December, NPR accounted a 7% job cut, trimming jobs across the board, and the cancellation of two shows – which accounted for the network’s entire left coast operation.
The other place where NRP fails is that, should newspapers shift to that type of business platform, they would likely have to scrap all of their advertisements and stop charging for subscriptions. Local printers would pay the newspaper producer, and readers would be asked to made donations to said printers. In exchange you get just the paper. They would, arguably, be quitting their job in hopes to panhandle their way to the same income.
And, as a system of business, donations don’t work. The problem seems to lie in people’s perception of value. Cheap is better than free in many respects. And buying is better than donating. This sense of value is based on spending habit priorities. Bills are a necessity, donating is charity to be done when one has extra money.
A far better question that newspapers should be asking is – “How do we make ourselves indispensable to our readers once again?” The answer seems to be an all out cross-platform blitz – instant headlines through the medium of the user’s choosing – text message, twitter, email. Access to online news as it happens.
But becoming more connected is only one step. Newspapers need to also leverage their specific demographic and give users something that’s hard to find elsewhere – hyper local news coverage. As noted in numerous sources, The Printed Blog is attempting to do this by culling content from local bloggers. For a nominal fee, it’s entirely conceivable that printed newspapers could hire bloggers of certain literary levels, and pay them to simply observe – or syndicate those who are already active.
Granted, the Times Company was already doing something similar to this, and got sued for it. But, they missed the part about seeking out the blogger’s permission first.
And the last step that newspapers needs to do? Cut out everything that the internet does better. Classified, sports, stocks – these three entire sections can be gotten rid of, saving the newspaper money on staff and printing.
The change isn’t going to be easy, but it can be done successfully. Newspapers typically have what new media wants – a vetted and lasting reputation. If they can extend that reputation into the digital world, actually becoming players rathern than carry-overs, all this saving talk will become nonsense.
Bradley Robb likes TV and books, and has an intense dislike for cinnamon. Once, Bradley stopped a Soviet T-60 with his middle finger. Bradley writes speculative fiction and edits Fiction Matters, and never really got the hang of talking about himself in the third person.