We clicked on a New York Times ad this morning.Not because we’re actually thinking of ponying up to get a paper-based New York Times delivered to our door (why on earth would we do that? It’s expensive and out-of-date and wasteful. The paper’s web site, meanwhile, is up-to-the minute and free).
We clicked on the ad because we were curious how much the New York Times is charging these days to deliver a paper-based paper to our door.
$5.85 a week, or $304 a year. And that’s 50% off the normal price of $608 a year.
And that reminded us of the real reason the New York Times needs to proceed with its paywall experiment sooner rather than later: It needs to make the decision to sign up to get the paper-based paper less stupid financially.
We understand that many folks prefer the paper-based version of the NYT to the online one. But if the NYT doesn’t narrow the gap between the cost of the online version and paper-based version, more and more those folks are going to decide that they can live with the (free) digital version instead of vaporizing $304 a year for a stack of paper–most of which they will never read.
In the most recent quarter, the NYT’s circulation revenue began to shrink. This is a big moment: Until now, the paper has been able to raise prices fast enough to offset the loss of readers to the web. If that trend has now been broken, the paper’s slide toward a major restructuring will be significantly faster.
We have never understood why someone would choose to pay $304 for something they could get for free. (We get the nostalgia part, and we do miss the pile of paper on Sunday morning, but we can live without that.) And as consumers look for ways to scrimp-and-save in this new normal, we imagine that most of them will decide that this is an easy $304 to save.
And that’s the real reason the NYT needs to get on with its paywall: It needs to protect its paper-based subscription business for as long as it can. That business is doomed, of course–printing newspapers is a scale business, and the more the circulation shrinks, the less viable paper-version will become–but the NYT needs to make it last as long as possible.
If the NYT executes the paywall strategy well, using the FT’s “metered model” rather the WSJ’s wall, it will be able to preserve most of its online readership and and all of its online ad revenue. By forcing NYT junkies to pay what they’re now getting for free, meanwhile, it will reduce the gap between the online version and the paper version.
And the latter will postpone the day the that paper needs to stop printing the paper version and go through its inevitable restructuring.
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