New York Times to charge readers for online content

America’s most popular newspaper website on Wednesday announced that its era of free online journalism is drawing to a close. The New York Times, the so-called grey lady of United States media, has become the biggest publisher yet to set out plans for a paywall around its digital offering, abandoning the once-unshakeable orthodoxy that internet users will not pay for news.

Struggling with an evaporation of advertising and a downward drift in street corner sales, the New York Times — motto: “All the news that’s fit to print” — intends to introduce a “metered” model at the beginning of 2011. Readers will be required to pay when they have exceeded a set number of its online articles per month.

The decision puts the 159-year-old newspaper, which lent its name to Times Square, on the charging side of an increasingly wide chasm in the media industry. Rupert Murdoch intends to erect similar paywalls around the online offerings of his papers, which include the Times, the Sun and the News of the World.

But others, including the Guardian, have said they will not charge internet readers and certain papers, such as London’s Evening Standard, have gone further in abandoning readership revenue by making their print editions free.

The New York Times‘s publisher, Arthur Sulzberger, acknowledged that the move is a gamble: “This is a bet, to a certain degree, in where we think the web is going.”

In an interview with his own paper’s media reporter, Sulzberger said the decision “allows us to begin the thought process that’s going to answer so many of the questions that we all care about”. He left no ambiguity about the importance of the shift: “We can’t get this halfway right or three-quarters of the way right. We have to get this really, really right.”

Boasting a print circulation of 995 000 on weekdays and 1,4-million on Sundays, the New York Times is the third-bestselling American newspaper behind the Wall Street Journal and USA Today. While most US papers focus on a single city, the New York Times is among the few that can claim national scope — as well as 16 bureaux in the New York area, it has 11 offices around the US and maintains 26 bureaux elsewhere in the world.

But in common with many in the publishing industry, the paper is in the grip of a savage financial crisis. Its parent company, the New York Times Company, has a stable of 15 papers, including the International Herald Tribune and the Boston Globe, but suffered a loss of $70-million in the nine months to September and recently accepted a $250-million loan from a Mexican billionaire, Carlos Slim, to bolster its balance sheet.

Journalists at the New York Times were obliged to take 5% pay cuts last year and the paper is shedding 100 jobs from its newsroom of about 1 300 people.

“The advertising situation is pretty glum, circulation is glum and they’re looking at a long-term drop in readership numbers,” said Ed Atorino, a publishing analyst at Benchmark, a Wall Street stockbroking firm. “I think it’s inevitable that newspapers are going to have to look for alternative sources of revenue.”

For publishers, internet charges are a dilemma. Erecting a paywall means that the number of readers seeing online promotions will fall dramatically, which is likely to make newspaper websites less appealing to advertisers.

The New York Times has had an unhappy history with online charging. It levied a subscription service called TimesSelect for certain parts of its site between 2005 and 2007, but some of its best known opinion columnists, including left-leaning writers Maureen Dowd and Thomas Friedman, objected on the grounds that many readers, particularly in developing countries, would not be able to afford to see their output.

Although the decline in advertising revenue has slowed, few major newspapers are making money and several titles, such as the Seattle Post-Intelligencer and the Rocky Mountain News, have folded. In Britain, the loss-making Independent is in talks over a possible sale to Russian billionaire Alexander Lebedev after struggling to meet debt obligations last year.

Critics, including Huffington Post founder Arianna Huffington, contend that online charging will not work because of the extent of free-of-charge competition in cyberspace. She remarked last year: “Unless you’re selling porn, and especially very weird porn, online subscriptions are a dead loss.”

But John Morton, a veteran US newspaper analyst, said papers need to take risks to revive their fortunes. “The newspaper industry made a big mistake about a decade ago when it accepted the false premise that information on the internet needs to be free. That has proven not to be a workable economic model for newspaper websites.” —

Staff Reporter
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