The New York Times' Paywall: Build Carefully to Avoid Collapse
Though the release yesterday was a little low on details, The New York Times' announcement yesterday that it would, indeed, erect a paywall makes one thing clear: in order to work, the paywall will have to get many people to pay for some Times content, but not too many.
The art of building the wall is in somehow keeping traffic high enough to keep ad revenue flowing-- nytimes.com currently has about 17 million unique visitors per month -- while at the same time building a relatively substantial revenue stream out of those who do pay, a process that the company says will take until 2011. NYT Co. president Janet L. Robinson told the newspaper: "There's no prize for getting it quick. There's more of a prize for getting it right."
The plan, which the Times is referring to as a "metered model," will call for people who visit the Web site an undetermined amount of times per month to pay an undetermined fee, excepting those who currently subscribe to the print paper, including those who only get it on Sunday. (As of October, it had weekday circulation of 928,000 and Sunday circulation of 1.4 million.) Without knowing details like how much the Times will charge, it's impossible to say how much money it will make, but can the delicate balance work?
I'd say yes -- because, as a fairly unique product, some people will be willing to pay for Times online content. But the sweetspot for how many of those 17 million a month will pay is probably in the low millions. If the paywall is formidable enough to turn away users, and that number slips too low, it becomes an also-ran as an advertising vehicle, at a time when even popular Web sites are revenue-challenged. Another "X" factor, and perhaps I'm thinking too much like a blogger here, is whether nytimes.com will lose some of its mojo because bloggers will be wary of linking to it. Most of us in this world are loathe to link to sites that our readers can't easily access. The Times made it clear it's aware of this reality, saying that its metered model would allow it to still "stay connected to a search-driven Web." The site has to continue to be part of the larger conversation, something that appears to be lost on some of its competitors. If you want to continue to follow this story, go to the reader Q&A currently going on at the Times site with Robinson and digital chief Martin Nisenholtz fielding the questions about the paywall.
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