Would you pay for content? The New York Times thinks that you will!

Article Update: When I wrote this post regarding the death of print newspapers the Wall Street Journal scandal obviously was not widely known at the time. So here is the question, is the WSJ fiasco of buying their own papers through third-party companies the final nail in the newsprint industry’s coffin?

The New York Times is expected to begin charging readers next month for unlimited access to its website, but the introduction of multiple subscription packages will not affect the majority of the site’s readers, the Wall Street Journal reports.

from CBC News article “New York Times preps online paywall” January 24th, 2011

It was just last week that I wrote about the monetization of social networks in which I referred to a September 2009 interview I did with social media expert and author Shel Israel regarding Twitter’s challenges with turning on its revenue-producing engines (Can Twitter Make Money and Other Questions Regarding Social Media Revenue Models).

Then in the April 17th, 2010 post “Does Ning CEO Rosenthal Announcement Mark the Beginning of the End of Our Social Networking Free Ride?,” I openly wondered if the days of the free ride in social media and networking were over.

At that time, the then new Ning CEO Jason Rosenthal made the announcement regarding the “need to double down on our premium services business,” and as a result look to “our Premium Ning Networks like Friends or Enemies, Linkin Park, Shred or Die, Pickens Plan, and tens of thousands of others which drive 75% of our monthly US traffic,” to “pay for many more services and features from us.”

Yikes . . . it looks like the jig is up!

Of course changes were inevitable relative to the need for users to pay fees of some sort to access services and information.

This being said, I am not certain that traditional print media such as newspapers have the same leverage as a social network like Ning, LinkedIn or Facebook to suddenly begin charging readers an access fee.  After all, these sites have become communities of purpose where they are not solely used as an information resource.  To many, they have become a medium through which a virtual realm connects its members and drives value in much the same way as L.J. Hanifan defined social capital in the physical world back in 1916.

This is why the decision by the New York Times to begin charging an albeit small percentage of it’s electronic readership an access fee, is both interesting and perhaps even courageous.  Of course given the dire prediction by veteran media industry expert J. William Grimes in 2009 that daily newspapers in the United States as we know them would cease to exist within 5 years, left the venerable paper with little option.

In an August 30th, 2009 post titled “Death of Print Newspapers in 5 Years (J. William Grimes),” I wrote about the Grimes comment which was made during a speech at the prestigious Commonwealth Club of California a month earlier.

Citing statistic which showed that print newspapers’ share of the $37 billion spent on advertising was 15% – down from 25% a decade earlier, Grimes pointed out that only 5% of our collective time is spent reading newspapers.  This he concluded, “is not a sustainable model.”

As a result of these declines Grimes would point out, both the Washington Post’s and New York Times’ traditional print businesses were losing money at a surprisingly rapid rate.

The fact that a separate study indicated that the Times’ web-based offering was also losing money certainly added insult to injury.

Against this backdrop of little to no choice, I guess the best way to describe the paper’s decision to charge readers a fee to access on-line articles can best be summed up with the analogy of standing on the edge of a cliff with a stampede of bulls bearing down on you, in that jumping probably looks like a good idea . . . okay the only idea.

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Like the parable of putting new wine in old wine skins, the model is not likely to hold up as there are so many options available in what is still a largely disparate network of competing mediums.  This broad and deep diversity of mediums is of course what favors the public as there are always going to be options.  More so in those situations where the person seeking access is a passive viewer versus being an active participant in a dynamic community.  Even if you have a favorite writer or columnist on the Times payroll, how much are you willing to pay to read what they have to say?

Of course, and as stated in the CBC article, “only so-called heavy users will be charged to view content,” which reportedly amounts to about 15 per cent of all visitors to the Times’ website.  This however opens up an entirely new line of questioning in that can the revenue generated by the 15 percent of said heavy users generate enough income to make the existing model viable?

This is definitely a question of balance to be certain, and a scale that will be different from one medium to the next.  Let me ask you this question, if you did not have access to the New York Times on-line would you pay to gain access?  How much?

Now let’s pose the same question but this time direct it to your Facebook or LinkedIn communities.  Would you pay to access your Facebook Network?  How much?

Herein lies the big question which is one of finding the right balance in the access pricing model – although you could also refer to it as the degree of user tolerance between what value they assign to have access to their community and at what point they will the just decide to walk away?

According to Shel Israel, whose book “Twitterville: How Businesses Can Thrive in the New Global Neighborhoods” the idea of paying for content is not one that will likely fly with end users.

Shel Israel, Author & Social Media Guru

Link to access radio interview excerpt: (BTR Special 5 Shel Israel_676243).

All-in-all, we are entering a very interesting period of social media and networking history.  Remember to stay tuned for further updates.

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Comments
One Response to “Would you pay for content? The New York Times thinks that you will!”
  1. wendy says:

    Jon,

    Great article! I agree with Shel Israel, paying for content is going to prove a hard sell.

    Dr. Wendy

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