domingo, 12 de junio de 2011

Lessons of the NYT Paywall

One of the newspaper’s biggest fears is the future. This mainly relates to the fact that most of them don’t see themselves there. The internet has become a slow and painful death for most printed newspapers. With their traditional business model being threatened, newspapers have debated what to do next. Some opted to become completely free, hoping that the advertising revenue would make up for any losses. 
 
Others like the New York Times have come up with a Paywall. This means that any user can read 20 NYT articles a month, but after that he or she needs to subscribe. This radical change was a big risk, mostly because the NYT was basically going to give away part of the ad revenue it was generating from its 15 million monthly users. Still, they decided to go ahead with it and after one year, (contrary to what many people thought) the pay wall is working.

At the time when its online content was free, a year’s subscription to the print edition of the NYT cost around $12 dollars a week or $600 dollars a year. It doesn’t take a genius to figure out why circulation was declining: “Why pay for something you can get for free?” Or better yet, “Why do I have to pay for something that others can get for free?” What this meant was that loyal print subscribers were getting less benefits than the people who didn’t pay anything at all. It was a question of creating value for the customer. With the Paywall the value of the NYT increased. People who valued it also increased, because putting a price on the online content made subscribers feel better. Not only that, according to Businessinsider.com, there has been an increase in print subscriptions!

I think that newspapers in general feared that, because of the size of the Internet, they needed to cater to a large market. They figured that by giving away news for free they could generate more revenue from the millions of new users they could reach. In NYT’s case, it was losing its customer base not because of other free news sites, but because it was giving its content for free. 

Currently, the newspaper is rolling out its digital subscription for tablets and smartphones trying to make the best out of these technologies and their reach. The Wall Street Journal and the Financial Times also have paywalls and, like the NYT, they are expanding into digital subscriptions.

A lot of people get their news from different sources, many of them for free. But there are also a lot of people who are willing to pay. In my opinion newspapers that want to differentiate themselves must do so by the quality of their news, editorials and opinion articles; not by their price or the way they are distributed. Now more than ever it is important to create a brand that subscribers can identify with, because to be able to charge for value, it first needs to be created.

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