Wednesday, March 30, 2011

Media rivals are pulling their punches regarding new Times paywall, hoping to learn from rivals experiment

Despite loads of snark, many media rivals seem tio be holding back criticism of the NYT paywall as they watch and learn from their rival's experiment in digital paid media. While there are many examples of columns written in a snarky tone, or revealing a deep skepticism about the concept of a metered paywall, many of the NYT's closes rivals are conspicuously quiet about their competitor's effort to generate revenue from online and app-based media.

This is not totally unexpected: newspapers, in particular, have been less willing to criticize their competitors over the past couple decades as the newspaper business has become more endangered, creating a more closed environment that resembles a guild-like industry.

I could find no stories at all in the NY Daily News, while the NY Post, never one to pull their punches, has only published short and to the point pieces on the move. One year ago, however, the Post was a bit more willing to have some fun at the expense of its rival. "The New York Times will make you pay," is how the original January 21, 2010 story started in the Post.

Which also goes to show how long the NYY has been working on its paywall, and why it has ended up costing so much money. This is the point of a blog post on, snarkily entitled "The miracle of the New York Times pay wall" (I, too, am struggling with whether paywall is one word or two). Patricio Robles ponders how it is possible that the NYT could spend a reported $40 million to construct its new paywall:

Assuming that the $40-50m figure, which has been reported by multiple media outlets, is correct, it may serve as one of the most powerful highlights of the real problem newspapers like the NYT face: inherently flawed economics.

Put simply, many struggling newspapers don't just have a revenue problem, they have a spending problem.
Meanwhile, Apple may be proclaiming 2011 to be the year of iPad2, and therefore tablets, newspaper executives will be directing their attention elsewhere as they eagerly await the first signs that the NYT strategy will be a success. But with the NYT investment costs so high, and with the resulting system ending up with so many holes in it, this paywall experiment looks more and more like the Times Select experiment where both sides of the debate could claim it's argument had merit.

But unlike the last paywall attempt, I have a feeling that the Times won't completely pull back its paywall if it feels things are not going well. The publisher can, after all, loosen the article limits, lower its prices, or change the formula of paid versus free articles. As a result, this metered paywall approach may result in more intelligence concerning digital media pay systems, but no solid answers.