Is the New York Times Out of its Mind?

First things first: I believe in paying a fair price for
things of value to me. Most good-hearted or even just habitual capitalists do. What I consider a fair price for value and what others consider a fair price for value may differ (for the purpose of simplicity let’s agree to
the assumption that “I” includes people who had the Internet in high school and various other early
adopters. “Others” includes people who had to learn
the internet when they were well into their professional lives). As someone who has had virtually unlimited access to a wealth of high quality, virtually free information since I got my first period I’m not willing to pay a heck of a lot for it. So the new York times offering subscription levels from $15-$30 a month strikes me as, well, a little off.

There has been some buzz on the internet lately about the New York Times new “revenue stream” otherwise known as paid subscriptions. Some people applaud the move. Some people are shocked. I find the whole thing rather silly and sad. I feel for the New York Times. I can imagine the shareholder panic, the long strategy meanings, learning whole new vocabularies and the knowledge that your industry is changing radically for the first time in over a hundred years. It’s scary and confusing. But none of that is any excuse for acting like an idiot.

In a note to subscribers NTY publisher Arthur Ochs Sulzburger, Jr says the following:

“It’s an important step that we hope you will see as an investment in The Times, one that will strengthen our ability to provide high-quality journalism to readers around the world and on any platform,”

So let me get this straight, Mr. Sulzburger; you want your readers, your consumers, the people for whom you produce your content to become uncompensated investors? And this when there are thousands of credible, easy to access, up-to-the-minute news sources out there completely free. Your subscribers should not only stay loyal but pay a price that is more than twice that of your competition for the privilege?


Chart courtesy of Chart of the Day

Fun Fact: Canada gets to try out this new pay-model first. Honestly, is there a content provider other than Netflix out there who doesn’t want us to bend over and grab our ankles?

Not everyone agrees with me here. That’s fair. Mr Lance Ulanoff over at PCMag predicted over two years ago that the free internet is taking its leave, suggesting that the free-expecting public were being unreasonable. He now lauds the New York Times’ decision, and does make the excellent point that the paywall is so poorly instituted as to render itself moot. However, I think Mr. Ulanoff is missing the point, then and now. The point is that the NYT is ignoring some really important market forces at work here. Obvious things. The same things the record industry can’t seem to wrap its head around: that what they’re creating just isn’t worth that much anymore.

This whole deal reminds me of an article I read a few years ago, by Wired’s Chris Anderson. It was called: Free! Why $0.00 is the Future of Business. This article has informed pretty much every business decision I’ve made since. He posits that:

“Once a marketing gimmick, free has emerged as a full-fledged economy. Offering free music proved successful for Radiohead, Trent Reznor of Nine Inch Nails, and a swarm of other bands on MySpace that grasped the audience-building merits of zero. The fastest-growing parts of the gaming industry are ad-supported casual games online and free-to-try massively multiplayer online games. Virtually everything Google does is free to consumers, from Gmail to Picasa to GOOG-411.”

He’s right, and it’s even truer for written content. Any
writer will tell you that as a skill it’s not valued highly when it comes to dollars and cents, even though the argument can be made that it should be.

As consumers of content on the web, our place in the scheme of things has shifted. For many content
providers, we are the product that generates revenue.
This works because there are some things we still pay money for: personal services, physical goods, and even some information. When it comes to content words, video and music many of us are willing to pay something but the price had better be as close to free
as possible. Articles and news stories are no longer things we really buy they’re lures to get us onto a webspace so that we in turn can be sold to advertisers who have something that might really tempt our wallets.

The New York Times, being populated by a whole gaggle of smart, talented people, one has to assume that they’re just trying to shift people back into hard copy subscriptions which just reeks of desperation. It’s a gamble that consumers won’t forgo the New York Times all together in favour of a news source providing the real perceived value for price.
Is that so hard to understand?

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