New York Times paywall goes up

Steve Henn Mar 17, 2011

New York Times paywall goes up

Steve Henn Mar 17, 2011

Kai Ryssdal: The New York Times announced what it’s calling its digital subscription strategy today, after working on it for more than a year. Readers who want just some of the news that’s fit to print — they’ll still be able to get it for free.

But if you want all the news that’s fit to put into pixels, you’re going to have to pay up — handsomely, too. The Times is walking a tricky line, trying to convince Americans to pay to read online what used to be free. Marketplace’s Steve Henn has more on the paper’s latest attempt to collect without killing traffic on its site.

Steve Henn: If you read fewer than 20 articles a month, you’ll never be asked to pay a cent and most links to Times stories will still work.

But for news junkies who want unlimited access to the Times on laptops, tablets and smartphones, the costs could be steep — up to $35 a month.

Josh Benton’s director of the Nieman Lab at Harvard.

Josh Benton: The Times is hoping that the more serious news consumer — the one who is going to be reading 20 or 30 or 200 articles per month — that those people are going to be willing to take out their credit card.

Henn: It’s like Angry Birds getting you addicted to their game and then charging you for extra powers in it.

Benton: Exactly, this is the mighty eagle equivalent in journalism.

Techies have another name for it: the freemium business model. It is one of the most popular ways to launch a media start-up. You give away your product, get millions of people hooked, then start charging a little bit for premium services. Skype works this way, so do Flickr and WordPress.

But rule number one is never start charging for stuff you had been giving away free. It angers your customers. And that’s exactly what the Times is doing.

Rick Edmonds: I think they will lose customers.

Rick Edmonds is a researcher at the Poytner Institute. Edmonds thinks the Times could earn $50 to $60 million in new digital subscriptions, but will also lose millions of readers who don’t want to pay.

Edmonds: So that amount of traffic, I mean, those people who at this point are on there regularly, are reading a lot of things, are lost to advertisers.

A recent study by Pew Research Center found just 1 percent of readers opt to pay when a paper start charging online.

In Silicon Valley, I’m Steve Henn for Marketplace.

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