Issue of the week: Will people shell out for NYTimes.com?

last updated 8 January 2015

Remember when people paid to read the news? asked Brett Pulley in Bloomberg Businessweek. The New York Times Co. does, and it wants to bring those days back. Starting on March 28, the Times Co. will ask its “avid, loyal, online readers” to pay if they read more than 20 articles a month. Under the somewhat complicated pricing plan, the Times Co. will charge readers $15 for four weeks’ unlimited access to NYTimes.com via computer or mobile phone, $20 for four weeks’ access via iPad or other tablet computer, or $35 for access via any device, including e-readers. It’s a crucial test for the company, and for its CEO, Janet Robinson. The 60-year-old executive wants to “create a new revenue stream” to replace lost newsstand sales and print-advertising revenues. Her career—and the future of the news business—could depend on her succeeding.

The effort is getting “an early boost” from one major advertiser, said Nat Worden and Jon Kamp in Dow Jones Newswires. Lincoln, Ford’s luxury brand, is offering to sponsor free digital subscriptions for 200,000 “heavy readers” of the Times’ website for 2011, with the Times giving Lincoln Web ads in return; the expectation is that about 100,000 readers will accept. Locking in those subscribers during the Times Co.’s “initial foray into the thorny business of getting consumers to pay” should help mitigate any sudden drop-off in online readers when the pay wall goes up. The stock market likes the plan, too. Times Co. shares jumped 3 percent after a Citigroup analyst upgraded the stock from Hold to Buy, reasoning that the company needs surprisingly few subscribers to offset revenue lost since the paper started hemorrhaging advertisers in 2007.

Still, there are “a lot of ifs” in this plan, said Felix Salmon in Reuters.com. Times Co. executives privately say they’re looking for 300,000 subscribers in the first year (not including the Lincoln deal), which works out to annual revenue of $60 million. I’m skeptical. Plenty of online readers will simply flip to other news sources the moment they’re asked to pay up. “Once you become habituated to avoiding the NYT and learn to get your news elsewhere, you’ll continue to do that.” Web-savvy users could dash the company’s revenue hopes, too, said Erik Sherman in Bnet.com. They’ve already found that “one Twitter feed or four simple lines of code” will defeat the pay wall, which the Times says took 18 months to develop. What does that tell you? “Simple: Some people in management get paid way too much.”