BuzzMachine

“So why charge your best customers?”

Are they really customers if they don’t actually buy anything.

AGREE! The NOW program on @PBS recently had a good review about using stipends or tax write-offs to support media that matters to individual people. “Bold proposal to save journalism with government subsidies” http://bit.ly/60m74M

They should use metering not to charge but to offer subscriptions and maybe other “club” inducements. Something along the lines of “…we know you love the New York Times…you will love us more with this subscription package that also gets you xxx and xxx…” That’s a better use of metering, target those people with sub deals. The one-hit visitors probably got there by mistake.

Newspapers may well be dying. Subscribers see that they are not getting news in most offerings, they are getting the news that the editorial board wants them to see, most often spun in the direction the editorial board wants them spun.

Very much like an oligarchy. Except that the rubes don’t think that those folks on the editorial (or, if you like, idiotorial) board are all that much smarter than they are. Hence the disconnect, the dropped subscriptions, and the disgruntled advertisers.

True, no one has been able to force users to click on ads. That is the “problem” with net advertising. You can force them to watch something before they get to the article, but that often ticks off the reader if it is something that they have no interest in.

The users problem is this: after paying say $50 for internet access a month, they find themselves charged another monthly fee for every news subscription that they buy. They don’t have an unlimited budget, so they pick and choose. In my case, the NYT will lose, because they have little to no interest for me in the southwestern US. The editorial positions of the larger papers is no better, so it may become a “chunk them all” proposition.

Good riddance, NYT.

May be the plan ties in with the about-to-be-launched Apple tablet/slate/unicorn?

Here’s the problem, Jeff.

Advertising, as you point out, isn’t sufficient to pay the bills. Not too long ago, you would strongly advocate keeping sites free in order to maximize what you called “Googlejuice.” But as we now know, Googlejuice lacks nourishment — it’s more like a “juice drink” loaded with high-fructose corn syrup. It’s great to get the jolt, but converting it into sustained good health isn’t so easy. Ad revenues can no longer sustain an operation like The New York Times.

You suggest cuts — but as we all know, too many cuts will kill a publication like The New York Times. Quality is expensive and it needs to be paid for.

You are right to point out some of the flaws in the concept of metering. It seems, however, to be an understandable attempt to strike a balance between putting up a complete pay wall or maintaining some openness.

Although my company enables many subscription websites and I am a believer in the model, I am not a believer in charging for commodity news. The question is whether The New York Times’ superior quality will be enough to distinguish their coverage from the many alternatives. But if they can’t maintain that quality edge, they’re sunk. I wish them luck.

So would your ideal pay scheme look like this…?

A monthly fee of, say, $5, charged at the end of the month. But every time you click on an article throughout the month, you get a five cent credit towards that month’s fee until you reach zero. So if you get all your news from NYTimes, you are rewarded by paying nothing. The occasional reader who just wants to read one article right now will be the one who pays.

There are technical reasons it would be a challenge (I could just write a script that opens 100 articles for me) but in theory does this meet the criteria?

The strategy isn’t intended to generate the most revenue possible online. It is intended to force people who find the Web the most convenient way to get news to buy the print edition, where newspapers today make more money per user. It is a short-sighted strategy that will make newspaper companies even more irrelevant online.

I disagree that advertising is not working on the web. It just isn’t working for companies that expect it to replace their losses on the print side.

If you look at online only products and services, you see a healthy mixture of successes and failures.

Jeff, a question on your first proposition: “I know, the argument is that these readers use the content more so they should be charged more. But that is based on the assumption that content is a consumable, a scarcity that drains the more it is read.” But is that the argument? So far as I understand it, it’s that those frequent readers “value” the content more, as indicated by their more frequent usage, and therefore may or will be willing to pay for it… So perhaps “may” or “will” instead of “should,” which makes the experiment more pragmatically commercial than that based on a sense of entitlement or a moral value judgment?

Yeah, my reaction too, Ann B (very first comment to this post). The readers are not the customers, not really. In fact, if you’re talking about news being ad supported, these readers are actually the “product” that NYT is selling to its actual customers — its actual customers being advertisers, people who pay money to the NYT for something, that is, they pay for eyeballs.
Still, your point is well taken, Jeff, that the Times is doing itself no favors by driving away readers. By instead of just saying, “bah, it’ll never work!” why not just sit back and actually watch what happens. Maybe we’ll all be able to learn something. I think this is a shrewd idea — shrewd in that it seems to be an effort to charge the people who value their content most while not slamming the door on casual visitors who are still going to help boost their overall numbers for advertising purposes.
I’m no advocate for paywalls — you’ve helped me see their problems, Jeff — but I’m willing to keep an open mind to such hybrid business models. I am very interested in seeing how these experiments turn out. The great thing about the Times, for all newspapers, is that they do seem to have enough money to try so many different kinds of things with regard to digital delivery. If it doesn’t work, it doesn’t work. At least they are trying whatever they can think of. From their iPhone app to this kind of micropay system, the Times’ willingness (and financial wherewithal) to experiment to see where the money may end up coming from in online news will end up benefiting all papers who bother to learn from their efforts.

Spot on Mr Jarvis. The newspaper is hurting financially and this smells of panic.

If the publication was experiencing fast growth and increasing revenues from online advertising would it be considering such a risky step?

Yoy say: “I know, the argument is that these readers use the content more so they should be charged more. But that is based on the assumption that content is a consumable, a scarcity that drains the more it is read. Of course, it isn’t.”

But there’s a different reading. It’s not that content is a consummable product. It’s that regular provision of general news coverage is a valuable service. Valuable not in the send of “should pay” but “would pay”. What you charge for is daily visits to the front page by the same people, not access to content.

The business model is upside down. Our neighborhood gym charges less if you go at least 12 times per month. They are giving an economic incentive in the hopes of generating what they call a “lifestyle change.” They want you as a customer for life. By incenting us to attend more often, more people do that, it becomes part of their lifestyle, the gym becomes a community and the economics of having to attract new members with “special deals” becomes less necessary.

The NYT should take a page from our local gym: incent making the NYT part of your lifestyle — their current plan provides an economic incentive to cut time at their site short, find alternative sites for the same or similar products and eventually establish a new browsing/consumption lifestyle.

Selling Dollar Bills for Fifty cents, while not a good business model, is almost always allot of fun and enjoyable, that is until you run out of dollar bills.

That’s where the NYT and just about everyone else like them is now heading. I don’t care if the product is the printed version or the online version, the issue is still the same. Quality costs money, really good quality costs even more. Even if you strip out the $50 sq ft rent, and union contracts, and private jets, and newspaper trucks, etc, etc, etc……. we are still faced with the core fundamental issue (s) of Sales (however you decide to charge) less costs (however inexpensively you can make it) “should” produce a profit. To the best of my knowledge, very few if any ONLINE news businesses have solved this simple math equation to date. I did make one assumption here (and we all know the line about assumptions) and that is for any of this to work, there must be a Profit.

So who know’s? Maybe the NYT will get it right. It surely will not be what allot of us might want it to be, but who says it has to? If they can solve the basic equation, and figure out how to sell dollar bills for $1.50, and it only costs them twenty-five cents per dollar bill to do it, maybe it will work after all.

Jeff:

I think Ann B. is onto something. I know that “why charge your best customers?” is in the context of your well-considered theories on the link economy. But standing alone it’s an odd assertion. Millions of businesses do.
And even in context, I think it makes plenty of business sense — have
just posted Biz Blog item to that efffect.

http://www.poynter.org/column.asp?id=123&aid=176198

Metering is useless unless is strictly enforced, say by requiring credit card info for every account, even if you won’t read enough to pay. Then the NYT has to choose between getting in your way when you are about to jump into the “pay” bracket or annoy you with unexpected (but totally legitimate and unrefundable) charges.

More important than that: Why is the NYT obliged to make the advertising model work? This wrong assumption leads to the wrong discussion.

If working to write/research/edit a piece doesn’t entitle you to decide how and how much to charge for it (if you charge at all) I don’t know what it will. What you (or I) think of information doesn’t matter -what the journalist thinks of his work (which has information but is not just information) is what really matters.

If you think news is a commodity, why do you care so much for what the NYT does? A little while ago I wrote this, precisely in the context of News Corp. wanting to get paid:

http://blog.hcuevas.info/2009/12/01/nothing-on-the-internet-is-free/

My take? If the NYT dies, it will be because there’s no paying market for it, not because it dared to get value from it. And we don’t get to set the price -only the choice of not paying it.

For those who lament the passing of high quality editorial & columnist content in the NY Times.

1) Isn’t this post and the high quality of the comments here far better and more detailed, balanced and nuanced than any analysis you’d get of this story in the NY Times?

2) If its better than that, isn’t it far better than what you’ll get in your regional news source, and light years better than CNN?