New York Times paywall: Savior of journalism or confusing debacle?

On Monday, The New York Times rolled out its newest plan to entice readers to pay for web-based stories. For an industry whose very existence could depend on finding ways to raise revenues from online content, the Times scheme is being watched closely by media consultants eager to see if this might be a model that providers of online content can emulate.

In short, the Times will let readers access 20 articles a month for free, but further reading will require a monthly subscription. The Times has unsuccessfully tried charging user fees before, and this time, too, it could confront problems as users tussle for awhile with a multitiered approach that charges different fees depending on how you access the material, experts say.

But the Times pay model, which cost $40 million to implement, might be a pivot point for the online news content industry, says Dale Carr, CEO of LeadBolt, a firm that helps online companies maximize ad revenues. He calls it one of the largest experiments in online journalism

“Many treat this as a huge gamble,” he says via e-mail. But he points out that since the Times's last effort to charge for content, seismic changes have overtaken the digital marketplace – most notably the explosion of “apps" on mobile devices such as the iPad and Kindle.

'Eureka' moment

Not only have apps helped pioneer microbilling and pay-per-use applications directly relevant to The New York Times's plan, but also they made the concept of paying for premium content more acceptable.

The proliferation of apps was the “Eureka” moment for online publishers, says Matt Shanahan, an executive at Scout Analytics, which helps digital publishers optimize revenue. “Apps woke the public up to the fact that there are other revenue streams they can create,” he says.

Whether it will work for online content the way it works for digital music or movie tickets is not clear.

Users can view as many as 20 articles per month without charge, but after that they must pony up. Scanning headlines on the homepage is free, and users can read stories that have been shared via social media – Twitter or Facebook – without impinging on their monthly allowance. However, depending on the search engine, stories that turn up from a search will count against the monthly tally.

Price by platform

The new pricing model is priced by platform. For example, the basic four-week subscription, which includes an app for a smartphone, is $15, while a four-week subscription with an iPad app is $20. If you want apps for your smartphone and tablet, you must pay both fees for a total of $35.

The model is one to watch closely, says Thomas Ksiazek, assistant professor of communication at Villanova University in Pennsylvania. It remains to be seen whether this slightly confusing quota system will lead to more subscriptions or merely more creative access routes, he says, calling the model a “leaky fence,” rather than a blunt paywall.

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