March 20, 2011

New York Times Charges for Content

Posted in Media at 7:19 pm by brittanylschmidt

Since 1704, the American Newspaper has been a staple in society, informing generation after generation at a low price.  Although the newspaper is more likely to be read online now, the low-cost continues to be expected.

News can be accessed from a multitude of mediums, including smart phones, internet, and television, which is leading to a decline in Newspapers.  According to Joseph Plambeck, a New York Times Journalist, “In the last year, circulation at The New York Times dropped 5.2 percent on Sunday, to 1.4 million copies, and 8.5 percent on weekdays, to 950,000.”

Due to the economy and reduced circulation of printed newspapers, The New York Times is planning on charging readers for online prescriptions.  They will be shifting their focus from advertisers to loyal readers, hoping they will pay for the news content.  It won’t affect those who subscribe to the print form only those who read their content specifically on the internet.   The average person will be able to read 20 articles a month for free, but beyond those articles they will have to pay. Publishers want to focus on the most loyal and profitable readers, rather than converting new readers.

Jeremy Peters, a New York Times Journalist, said many readers and bloggers were happy to finally pay for their frequent use of the New York Times Website while others said it was a dangerous step with the digital age and the approach would be doomed to fail.

The plummeting economy has caused a decrease in print advertising, leading to less ad revenue and new income sources.  To be successful with this new approach, executives studied other business models that require users to pay, including weight watchers and iTunes.  They have decided to make it a flexible plan, so that when breaking news is relevant, the content will be free for everyone.  According to Peters, Jill Abramson, managing editor for news, said,

“I believe that our journalism is very worth paying for.  In terms of ensuring our future success, it was important to put that to the test.”

Many executives believe they have to try this model out to test how many online subscribers they get, which they are hoping to be around 300,000.

Although New York Times thinks this is the right business move, other newspapers are showing their skepticism. According to Peters, Alan Rusbridger, editor of The Guardian, “At the moment, I can’t see any evidence of a general interest newspaper making a success of this.  I think financial journalism is the one exception to the rule because the information is of value, and it’s time-critical. If I can know something five minutes before you do because I have a subscription to The Financial Times or The Wall Street Journal and you don’t, that’s of value.”

Other newspapers are not the only ones who are worried about the shift.  According to Richard Perez-Pena, a New York Times Journalist,” Successful media companies go after audience first, and then watch revenues follow; failing ones alienate their audience in an attempt to maximize short-term revenues.”  He believes that this new pay model will make the readers feel taken advantage of and possibly look elsewhere for news.

In the past, the Times tried a paid subscription plan for readers called TimesSelect. It charged for access to popular opinion columnists and brought in around $10 million dollars of revenue.  The company executives thought TimesSelect restricted access to the site for more potential readers, so they decided to end it.

According to New York News & Features, the New York Times want to remain free because it is growing into an English global newspaper, with a large amount of international readers. Tom Friedman, a New York Times columnist who wrote during the time of TimesSelect, said,

“As we got into it, it was clear to me I was getting cut off from a lot of my readers in India and China where 50 dollars per year would be equal to a quarter of college tuition.  What was coming to me anecdotally from my travels was the five worst words that as a columnist you ever want to hear: ‘I used to read you before you went behind the wall.’”

There will be advantages and disadvantages to the New York Times subscription plan that will be issued later this month.  Those in favor of it believe they have found a new revenue source through loyal online readers paying for a subscription. Others are worried international readers will no longer read the New York Times online and reduce the number of readers all together.

It is hard to say what a paid subscription for the New York Times will do to the future of the newspaper.

Will the New York Times become an elitist type of paper, where only certain people are reading the content because others are not willing to pay?  Or will other newspapers follow in their footsteps and create an online subscription?  It is hard to say whether or not this business idea will work, but it is clear that the online charge has plenty of praise and opposition. There is a global understanding that access to news should be a right and not a privilege.   For several other sources of online news that remain without subscription fees, their articles may begin to mainstream as people shy away from purchasing online news.  Why pay for news when you can get it elsewhere for free?

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