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From AJR,   October/November 2011  issue

Encouraging News for the New York Times   

Charging for content seems to be paying off. Thurs., October 20, 2011


By Rem Rieder
Rem Rieder (rrieder@ajr.umd.edu) is AJR's editor and senior vice president.      

When the New York Times announced its plan to start charging for digital content last March, there was no shortage of savants who predicted it would be an abject failure.

After all, it flew in the face of the widely held belief that people simply won't shell out for digital content.

But while it's way too soon to declare victory, all signs seem to suggest that the plan is working quite well.

And that's good news for journalism.

Journalism, quality journalism, is an expensive proposition. It takes serious money to staff international hotspots and do time-consuming accountability reporting.

As you may have noticed, the print advertising that made newspapers such cash cows for so long has shrunk precipitously in the digital age. And online advertising has fallen far short of making up the difference.

Under these circumstances, asking news consumers to pay for valuable information hardly seems like a radical notion.

The New York Times Co. reported today that it had made a $15.7 million profit from July through September, compared with a loss of $4.3 million in the same period last year. This despite an advertising decline of 8.8 percent.

The really promising news is that the Times says it now has 324,000 paid subscribers to its various digital products, up from 281,000 three months before. That's both a powerful new revenue stream and a lusty vote of confidence from the fan base.

And that total doesn't count the 100,000 people whose digital subscriptions are being underwritten by Ford.

One reason for the success is the high quality of the content. Another is that the plan was so well thought out.

Rather than erect a classic paywall in which all content is off limits until you get out your wallet, the Times approach allows readers access to 20 articles a month before the meter starts running. That helps reduce the loss of casual readers. The plan also permits readers to view Times articles via social media sites and search engines.

Most important, the plan overnight increased the value of a retro old print subscription by throwing in full digital access at no additional cost. The Times said new orders for print subscriptions were increasing, which it attributed in part to the inclusion of digital access.

So does that mean charging for content will pay off for other news outlets? Hard to say. The Times – and the Wall Street Journal, which has long had a successful paywall – are very distinctive products. There's no guarantee the approach will work as well for regional news organizations.

But plenty of them are going that route. It will be interesting to see how things play out for paid-content plans at the Dallas Morning News, the Boston Globe, the Baltimore Sun, among others.

But for now it's enough to savor the glad tidings at the Times. It wasn't that long ago that the paper's future looked very shaky indeed. Now things are looking up. The company even managed to pay back early the millions it was forced to borrow from controversial Mexican billionaire Carlos Slim Helú.

The Times, despite its occasional misfires, is a national treasure. Keeping it alive and well is a good thing.