NY Times To Charge For Web Content - InformationWeek

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NY Times To Charge For Web Content

The media company plans to introduce a "metered model" to charge consumers of its digital content.

The New York Times plans to start charging readers for its Web content next year, hoping to boost online revenue to help counter the losses in print advertising that has made it difficult to support a major news operation.

The media company plans to introduce a "metered model" that lets visitors read a set number of articles for free per month, and charge them for stories exceeding that number. It is believed that avid readers of the Web site will be willing to pay for content. Newspaper subscribers will get unlimited access at no additional cost.

The Times has charged for Web content before, but dropped the paid model in the belief it could increase ad revenue through higher readership. But despite becoming the leading newspaper-owned Web site, the number of online ad dollars hasn't countered the loss in print advertising as readers, particularly younger adults, give up newspapers for the Web.

In the third quarter, The New York Times Co. posted a loss of $35.6 million, as revenue fell nearly 17% from the same period a year ago.

"Our new business model is designed to provide additional support for The New York Times' extraordinary, professional journalism," Arthur Sulzberger, Jr., publisher, and chairman of The New York Times Company, said in a statement released Wednesday. "Our audiences are very loyal and we believe that our readers will pay for our award-winning digital content and services."

Over the years, consumers of online media have grown used to accessing content for free. Most analysts, however, agree that newspapers and magazines will have to turn many of those readers into paying customers in order to remain viable businesses.

The Times' decision to re-introduce a paid Web content model comes as readers appear to be getting use to paying for electronic content. E-readers, such as Amazon's Kindle, were among the hottest sellers during the holiday shopping season. Device users can usually access an online store to buy books and order newspaper and magazine subscriptions.

Forrester Research estimates 3 million e-readers were sold in 2009 and predicts 10 million will be sold this year. In addition, studies have shown that an increasing number of people are using smartphones to read news and sports content from the Web.

Janet L. Robinson, president and chief executive of The New York Times Company, acknowledged that the shift to mobile devices in saying the decision to introduce the metered model was "guided by the fact that our news and information are being featured in an increasingly broad range of end-user devices and services, and our pricing plans and policies must reflect this vision."

In addition, making readers pay for unlimited access to NYTimes.com would also introduce a new revenue stream "that will make us less susceptible to the inevitable economic cycles," Robinson said.

The Times will not be the only major newspaper charging for Web content. The Wall Street Journal has long charged an annual subscription for unlimited access to its site.

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