Could a Frictionless Experience Overcome Resistance to Paid Content on The New York Times Site?

January 21st, 2010

We pay a lot for access — think about your cable or wireless bill.  We may not like it. But that’s the way it is, and we accept it.  Could the same premise work for news? Wednesday, The New York Times announced that it would begin charging for content in 2011. It won’t affect the one-click wonder or casual viewer because The Times plans to use a metered payment system that would allow users to view a certain number of articles for free each month, before having to pay for more. Those affected will be frequent, loyal readers…like me. I visit the site daily and read dozens of stories, but I don’t shell out the $600/year to subscribe to the printed paper (print subscribers will have unlimited free online access ).

I’ve been following the pay wall discussions for months (see previous post) and still have the same question: Will consumers pay for news — in big enough numbers that it will offset the decrease in traffic that pay walls will create? Obviously, the declining revenue situation for newspapers is not getting any better.  In Q3 2009 The New York Times posted a loss of $35.6 million, as revenue fell nearly 17% from the same period a year ago. So something has to change. There’s certainly little chance print subscriptions will increase given changing consumer media behaviors. And the advertising venues and options continue to proliferate online. But I believe website pay walls, as currently positioned, are very risky bets. And seem like a backwards move. A push in forward-thinking and innovations in information delivery and customization seems less risky and a better potential source of long-term revenue.

For The New York Times the bet is especially big, because it not only runs the risk of TimesSelect 2 (the abandoned payment approach in 2007), it risks losing its mojo as top digital (non-aggregator) news site and could retard its digital ad potential if it fails. If readers run into pay walls and quickly move on to still-free (and top-notch) sources like the BBC, Reuters, NBC, NPR and many more — then the model could fall apart. And, The Times, as the leader in advertising revenue with more than 17 million readers a month in the United States, it has a lot lose if the move backfires.

There was one line in the release yesterday that intrigued me and provided a signal of some forward thinking. “ will be building a new online infrastructure designed to provide consumers with a frictionless experience across multiple platforms.” The concept of a frictionless experience is very appealing and could be a major move, IF The Times can pull it off well and quickly. In the age of ubiquitous smart-phones, Kindles, the long awaited Apple tablet, and eventually the Internet-mediated livingroom TV monitor, readers are already coming to expect easy, and smart, access to the their content wherever, whenever. They also will come to expect the stories they save on one device to be known by another; ditto email sharing lists, stock portfolios, favorite sports team preferences.

If The Times can provide such synchronicity, then readers who are asked to pay may accept the charge as, in part, an access charge — like their wireless access charge. And that perception change could change the game.