I really hope this works for them. I subscribe to LWN and don't mind paying for things that I find valuable (even news). I also like the idea of the reader being the real customer instead of the advertiser.
But I don't think it will work.
The problem is that the 50¢ a copy we used to pay was never the real money maker for newspapers. What made the business so fat was the near-monopoly control they had over many components of local advertising. That control is gone and it's never coming back.
But remember one of their largest costs is also disappearing. Newspapers almost certainly lost money per copy by selling it for 50¢, and made up for it by selling ads. The problem will be selling that same metaphor of "copies" or subscriptions, when each additional subscription costs them next to nothing.
But the real cost was never the production of the physical newspaper - it was always centered on content. Content really hasn't gotten any cheaper to produce, though... the fact that they're saving a few pennies a copy (that they used to sell for money) by distributing their content for free online is really little comfort to them I'm sure.
Doubt charging for NYT will work. FT and WSJ can get away with it because their financial reporting is actually worth paying for by biz people.
I think what is really interesting to observe from all of this is the fact that leaving families in charge of companies can lead to innovation stagnation.
WaPo got lucky in that Buffett came aboard decades ago and steered the company towards good capital allocation. Those kinds of lessons served them well and they managed to purchase businesses to support their journalism operations (Kaplan).
But the Sulzberger family (NYT) pretty much stuck with journalism. The Bancroft family (WSJ) lucked out in that their product is good enough to pay for, but early on they had the option of moving into providing financial data services (think Bloomberg) and decided against it. They would have been an absolute beast of a company today if they went that route.
Both NYT and WSJ has a product good enough to pay for, but WSJ subscribers are a lot more likely to have their subscription paid by their employer.
Same goes with the Economist, who's doing great at a time where Newsweek and Time face serious problems. IMHO we're entering the age of expense account publications, which will mean quality journalism will have much more limited worldview and target audience.
Ask yourself why the employer is willing to pay for the WSJ though. That's the thing. There are only two financial newspapers and most employers, especially in business, will be willing to pay for that because they see an informational benefit in it. Same goes for The Economist, which is known for stellar reporting in their Business/Finance section.
To contrast, the NYT does not offer the same kinds of benefits. Their reporting on global issues faces stiff competition not only from the WSJ, FT, and The Economist, but also TV/Radio journalism and other newspapers.
Not expecting this to work for them, but if it does, maybe they'll use the money to start doing good investigative reporting again. I'd love to see more journalist-run sting operations like reporters used to do in the old days.
Agreed, had the quality of their paper (or of the newspaper industry in general) been similar to what it was even just a decade ago, I believe this could have worked.
However, the newspaper industry has been losing quality at a rate equaled only by their loss of readers and one influences the other. This feedback loop they've developed is going to be their death, and unless they can stall this loop, they'll be gone for good, which IMO is a shame.
Unless this pay-for effort spurs new life and quality into their articles, I doubt they'll manage to get enough people to pay the prices required. They need to poach would-be payers from other newspapers and hold them as their own. The newspaper industry is entering an evolutionary state, only the hyper-competitive are going to survive this.
Can't really speak for the rest of the world (any one know any studies?) but the quality of online is the Australian market is absolutely appalling.
The Sydney Morning Herald is probably the best broad sheet in the country, but online smh.com.au is absolute link baiting trash. Personally i could not fathom forking out for celebrity trash nor for the un fact checked gibberish that is posted throughout the day. Lately i would be lucky to check it once a day for 30sec.
And i'm really skeptical if they could ever find scale to charge for online access in an any Australian city market.
I used to check the site of the News Ltd paper in SA a number of times a day but a couple of months ago I deleted all related bookmarks and feeds and went cold turkey. I don't think I'm missing much. They bow down to the pageview gods and, subsequently, the quality of their material is woeful.
Isn't the metered system as adopted by the Financial Times simple to circumvent? I simply open each article in an Incognito Window in Chrome and I can read as many articles as I want.
Just like with Adblock, if the most tech-savvy 2% find a way around it, it's not going to make a big difference to their bottom line. Even moreso here because a lot of those free riders would have just chosen not to read it if it required money.
Only way that will work is if you require everyone to make an account, which won't do wonders for traffic.
Maybe only showing the start of articles without an account would be the only way to prevent people getting around it. Seems useless to if you can just Google search an article and see it anyway.
My prediction: A gorgeous interactive iTablet magazine app with the software written by Apple and the content provided by the NYTimes, Sports Illustrated, etc.
At least, I'm hoping the content producers don't try to make their own (as in iPhone). A standard iTablet newspaper/magazine app would make the experience consistent. In the iPhone apps, it's pretty fragmented right now in terms of quality and experience.
I don't think advertising for "a paper" will ever be as lucrative as the old paper days, because it's too easy to drift over to the billion other sites on the web.
The old paper days allowed for virtual monopolies because it was physically inconvenient to have more than three or four papers at hand, and most people only had one. It was easier to convince an advertiser that a reader was going to at least glance through every section and be exposed to the ads.
These days I never read a news outlet's site all the way through[1], not in the way I used to sit on the floor on Sunday with paper and coffee. A news outlet has at most two or three articles' chance at getting my eyes to glide over an advertisement. I will never see 99% of what's on a site before I move on to some other site. Google is the only one making money this way.
[1] Except for Hacker News. I think aggregation points the way to where the money is in the future, both aggregation of content and aggregation of ads.
I wish them luck but given the majority of people read newspapers for entertainment/distraction I have no idea how they'll compete with the avalanche of free content online.
Personally I'd pay good money for a paper that did lots of investigative reporting (and only investigative reporting) but I suspect I'm in the minority.
While I wouldn't pay if I were Google either, and I won't be subscribing to the NYT, I think it's Google that derives the most business value from being able to index NYT content: they get answers to give to their consumers, and they get something valuable for "free" that they sell a large volume of ads against.
But I don't think it will work.
The problem is that the 50¢ a copy we used to pay was never the real money maker for newspapers. What made the business so fat was the near-monopoly control they had over many components of local advertising. That control is gone and it's never coming back.