Clearly struggling to find the “right model” to generate maximum revenues from both subscriptions and advertising, the New York Times appears to be preparing a multi-tiered program for charging it’s most active users for access to Times content on multiple platforms.
According to a story in the The Wall Street Journal (subscription needed), The New York Times is planning to roll out it’s elaborate scheme next month.
Quote sources “familiar with the matter”, WSJ said the Times has considered offering Internet-only access for about $10 and a more expensive package, perhaps double the price, that includes online and IPad App (which is also now free). Print subscribers to the paper will get all digital privileges at no additional cost.
But the newspaper is also planning to allow all readers to get free access to a set number of pages on the NYTimes website before being told that they need to sign up for a subscription in order to see any more Times content.
This controversial concept…allowing free access to infrequent users — many of whom come in from search engines — while charging the papers heaviest and most loyal users, stems from the desire to keep the raw number of unique users who come to the site up as high as possible in order to be able to attract as much advertising revenue as possible. This so-called “metered” approach has been used for some time by The Financial Times. Under this plan, users who come to the site via search engines will also be allowed to do so with no barrier.
The New York Times website, free until now, attracts more than 30 million unique users a month and generates more than $100 million a year in advertising according to sources at the Times.
But only about 15% of those 30 million users qualify as “heavy” users who might ultimately be charged. The concept behind this plan is that it will allow the company to begin to grow significant subscription revenues but still preserve enough overall traffic to allow for substantial advertising revenue.
Sources at the Times have told me that it will take somewhere between half a million and a million paying subscribers to make the Times plan a success.
While there is some concern that it seems counter intuitive to be charging the most loyal customers to the site, while letting less engaged customers get what they want for free, but the argument is that the loyal customers place the most demand on the site and other platforms and get the most out of it.
What is tremendously important is that the Times has done the work needed to build a platform that will allow it to charge once for multiple platforms and therefore to test many different scenarios.
The Times deserves a great deal of credit for testing as many alternative plans as possible. It will take constant testing to find the best mix of attracting readership, subscription revenue and advertising revenue.
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