New York Times' Pay Wall

To pay wall or not to pay wall, that has been the question.

Well the NYT did it -- they instituted the pay wall. (Paywall?? -- AP finally dropped the hyphen in email and the spaces in cellphone, smartphone and handheld -- although the hyphen remains in e-book and e-reader. Pay wall still has a space - perhaps because it is still a chasm for most newspapers).

But I digress. Only 3 months behind schedule, the Times has finally announced its new pay scheme. The critics are rolling their eyes, the schemers are figuring out ways around the fence, but I think Ken Doctor at the Nieman Labs has analyzed it best. The Times has, like every other newspaper in the universe, lost print subscribers, print revenue and while increasing digital subscribers, has not created a business model to sustain the legacy and additional digital workflows and deliveries. In other words, the Times had to do something.

Unlike the Wall Street Journal and Financial Times, which hawk (chest beat) important business news, which in turn mandate that all businesses subsidize subscriptions for its employees (or at least the top echelon), the NYT and other newspapers, is a nice to have. Supported by aficianados, news junkies and advertising, the NYT et al are trying to figure out how to get non-print subscribers to pay for content. It is a very slippery slope since the Times' brass does not want to (further) erode print subscribers -- but they do want a mechanism to be able to charge said aficianados.

I think they have done a fairly good job. The new price points will capture some digital-only readers at a weekend-delivery pricepoint -- which is far higher than the Journal's annual subscription fee. While the paper may see some churn in the 7-day a week home delivery (a $600 a-year-habit) vs $195 for all digital, it protects the all-important-Sunday home delivery price of $197 a year. Sure some of the $680m subscription franchise might be at risk, home delivery bears a much higher cost of good. If news print fades to black and the Time can convert a growing percentage of news readers to digital only at the rate of $200 a year -- management will be only too happy to jettison print readers -- and greatly improve margins.

Who knows, in a few years, it may be that the diehard print readers will be anteing up big premiums to continue that home delivery.

Disintermediation: Opportunity & Analysis

"The Media should charge for content," so sayeth pundits about news sites.

Should is such an interesting verb that stretches from mandate to polite suggestion. The Merriam-Webster Dictionary offers (in order): to express condition, obligation, futurity, what is probable or expected, and finally, to "express a request in a polite manner." The pundits no doubt are more than suggesting, and are obliging that the media must charge for content.

Really, I would venture that media companies are not actually adverse to charging for content, but since most haven't since their initial foray onto the web, can't figure out how to do so without committing suicide. (At the recent min summit, Forbes.com CEO Jim Spanfeller was urging his fellow publishers to lock up their content behind a paywall!) Despite that, Rupert Murdoch is said to be establishing a strategic team to figure out how he can charge for his print properties. And The New York Times is toying with a few different ideas. Of the two mentioned (metering content consumption and charging for overage vs. creating a membership community) I am partial to the community idea which is the model used by museums.

My friend Michael Chwastiak sent me a link to Jason Pontin's prescription for saving publishers. I have read and re-read his (long) missive several times to cull the best points: you can charge for content that is uniquely intelligent and editors, nay, publishers, need to re-examine the needs of the audience. As I have written before, editors forget that as one generation passes the next generation may not have the same values and needs. Indeed, one fundamental change that has occurred is disintermediation. As readers can freely communicate with each other and vendors -- the role of media as gatekeeper has diminished from its historical role. But that does not mean the role of journalist/editor has ceased to be important.

Rather the role has evolved to be more of an analyst than merely story teller. With hundreds of comments and opinions at the ready, the new value is in interpreting that data. Synthesizing the thoughts of bloggers and commenters into content "reports" would provide more value than merely regurgitating another wire story.

This is the monetizable model that works for business intelligence companies and this is a model that should work for many media companies.