The Return of the Firewall of Sanity

posted at 1:27 pm on July 10, 2009 by Ed Morrissey
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One might have thought that the New York Times would have learned its lesson from its previous efforts at subscription-only services.  In 2005, the Paper of Record had the brilliant idea to hide its columnists and editorials behind a $50-per-year members-only virtual gate, thus sparing us the inanities of Maureen Dowd, Frank Rich, and Bob Herbert for almost two years.  By August 2007, Pinch Sulzberger finally figured out that his paper had become entirely irrelevant in the blogosphere and outside of the print-delivery area of New York, as subscribers flocked to the idea by the dozens and their columnists went unread by everyone else.

After that experience, what is the logical next step? Locking the entire paper behind the Firewall of Sanity:

New York Times Co. said in a survey of print subscribers that it’s considering a $5 monthly fee for access to its namesake newspaper’s Web site.

Times Co. also asked whether subscribers would be willing to pay a discounted fee of $2.50 a month for access to the site, in the poll confirmed today by Catherine Mathis, a company spokeswoman. Nytimes.com, the most visited among newspapers’ sites, is currently free.

Times Co. is contemplating additional sources of revenue as marketers slow spending on the Internet. Ad sales at the publisher’s sites, also including about.com and boston.com, fell 8 percent and 3.5 percent in the first quarter and fourth quarter of 2008 respectively. They gained 6.5 percent last year.

“The question here for consumers is the psychological barrier of now paying when you were getting it for free before, and you’re going to lose some readers as a result,” said Ken Doctor, an analyst at Outsell Inc. in Burlingame, California. “The New York Times will also have to evaluate what this means for ad rates as they lose readers.”

Didn’t they already do that in 2007?  Newspapers like to gripe about giving away their product for free on the Internet, but that’s not really accurate.  They may not get the same kind of ad rates as they do for their print editions, but advertisers do buy space on newspaper websites.  They also don’t mention the readers they get from bloggers linking and discussing their articles, which drive up page views and ad dollars.

One could understand a newspaper trying this, though, in a desperate attempt to find a successful formula … if the theory hadn’t already flopped, and flopped famously, in the recent past.

Earlier this week, Slate’s Big Money predicted newspapers would try this, and discover that people wouldn’t subscribe — and especially in a recession:

Before things get that far, newspapers are likely to fumble around with experiments to find out if and how much readers will pay on the Internet. Medianews—which owns the San Jose Mercury News, the Denver Post, and 52 other papers—plans to start charging for some online stories by year’s end. The Newport Daily News, a 14,000-circulation paper in Rhode Island, charges $345 a year for an online subscription to a page-for-page digital replica of the print edition. A year’s subscription to the print paper is only $145. And that’s the whole idea: If everyone’s reading your online paper for free, charge them so much that the paper looks cheap by comparison. Now, that’s a bargain.

Meanwhile, companies like Journalism Online and ViewPass are creating e-commerce technology to help newspapers charge readers for stories while gathering personal data on them for free. (This idea of paying for information is apparently a one-way street.) So far, Journalism Online is generating greater buzz, claiming to have signed up several newspapers that will start charging monthly or per-article fees as early as this fall. Its strategy is to hide just enough news stories behind pay walls to entice 5 percent or 10 percent of readers into subscriptions while giving up less than 10 percent of ad revenue. Among Journalism Online’s founders is Steve Brill, whose past efforts to charge for content online have led to painful defeats. In 2001, Brill bought Inside.com and merged it with his Brill’s Content magazine, only to see both shut down six months later. His controversial micro-payment venture Contentville also went down in flames. …

Worst of all is the timing: The summer of 2009 is a terrible time to start charging for what was free. The Journal established its current pay-wall structure before the recession. Today, newspapers need to bargain with readers who are seeing their wages and salaries dwindle, who are saving more to rebuild nest eggs, and who are seeing the cost of everything from gas to groceries to local taxes get higher. Cable companies are thinking of charging for their online content, nabbing another piece of our monthly budgets.

So is this really the best time to start charging for online news? No. The best time was back in 1994, when the Web made online publishing to the masses a snap. And now that newspapers are finally making the move, they’re applying a 1994 solution to the 2009 Web. Today, online publishers are seeing more and more traffic coming through blogs, aggregators like Google News, and social sites like Facebook and Twitter. Ignoring them is even more perilous to a paper’s image than it was two years ago, when the New York Times tore down its Times Select pay walls. The hypertext link that made the Web unique is even more powerful today, and pay walls that break those links send would-be readers a clear message: Don’t bother.

Kevin Kelleher says the most embarrassing part of the effort is that newspapers are supposed to understand and report on the world, and yet they’re completely out of touch in their own industry.  In all fairness, he wrote that before the Times began rebuilding its Maginot Line to defend itself from on-line readers.

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