New York Times paywall goes live

@CNNMoneyTech May 24, 2011: 4:16 PM ET
New York Times paywall goes live Monday

NEW YORK (CNN) -- Beginning at 2 p.m. ET Monday, The New York Times will try to harness the force that has been wrecking the newspaper business: free access on the Internet.

The nation's most prestigious general interest paper will now charge readers for extended access to its website, NYTimes.com. In erecting a paywall, executives at the Times are trying to walk a fine line: generate subscription revenue from avid readers willing to pay, while still retaining the more casual customers who boost advertising revenue with their clicks.

Analyzing online readership habits and polling data led the Times to set that fine line at 20 articles every four weeks. Click on fewer and you'll have free access -- but to get article #21, you'll have to pay up.

Readers will need to shell out $15 every four weeks for unlimited online and smartphone content, $20 for online access and the iPad tablet app, or $35 for the full digital smorgasbord. (Print subscribers get it all at no additional cost.)

That pricing structure is subject to tweaking, according to Martin Nisenholtz, The New York Times' head of digital operations.

"We're as confident as we can possibly be in a research setting. Obviously, whenever research hits the real world, there are changes," he said.

"A bet on the future" is how managing editor Jill Abramson describes the plan -- a gamble to raise revenue so the organization can maintain the breadth and depth of its news coverage. Sitting in her office, lined with books and baseball memorabilia, Abramson says she is confident of winning that bet.

"I believe strongly that the quality of our journalism is at such a level that people should be willing to pay to read it," Abramson said. "I don't know if there are that many other general interest newspapers that are offering that same kind of highest-quality journalism, so I'm not sure that everyone else is going to dive into this pond."

While business papers like The Wall Street Journal and Financial Times have long charged for online content, the New York Times is the largest general interest paper to end free, unlimited access to its website.

WSJ.com costs $155 a year, and the Financial Times charges $260 annually for FT.com.

More sites say goodbye to free content

As newspapers have given away their digital product for free, paper subscriptions have plunged. The prestigious Times is no exception. Circulation is down to 877,000 for the weekday edition and 1.35 million on Sunday. Meanwhile, readership at NYTimes.com is steadily climbing. According to ComScore, NYTimes.com had 48.5 million unique visitors in January.

Web advertising now accounts for one quarter of the ad revenue of the Times and its overseas sister, the International Herald Tribune. But that hasn't made up for the drop in print revenue, which has fallen sharply over the past few years. The Times' News Media Group, which includes both newspapers, reported revenue of $2.3 billion last year, off 3%.

So the NYTimes can't afford to retain the status quo. It needs a second stream of online revenue -- and company executives say now is the right time to start charging.

"A lot of things have changed recently. One is that people are more used to paying for digital content with the advent of apps and the app store," said Paul Smurl, NYTimes.com' vice president for paid products.

Even so, the Times will allow access to its site through links on social networks such as Facebook and Twitter, to bring in the large audience that makes NYTimes.com appealing to advertisers. In fact, the Times anticipates the vast majority of online readers will not reach the paywall limit. Its hope is simply that devoted readers will reach into their wallets, just as they used to for their daily newspaper.

If any general interest publication can pull it off, it should be The New York Times. But getting people to pay for something they've been getting for free is not easy in any industry. Competing newspaper publishers will be watching very closely. To top of page

CNNMoney Sponsors
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.