AS A contributor to the free side of a venerable publication which has charged for its content for over a century, I can understand that tough situation in which the New York Times finds itself. Its website is one of the top online news sites, visited by millions of readers, and its news stories are among the most cited source materials on the web. To maintain that preeminent position, open and free access to stories would seem crucial. And yet, the bills must be paid. The hope is to try and find a pay model consistent with the maintenance of the dominant web position, but it’s not clear that that sweet spot is manageable.
The Times will give a pay-wall another go, it seems. New York Magazine writes that the paper is ready to use a system not unlike that at the Financial Times, where readers can access a certain number of pieces each month for free, after which they must pay. Kevin Drum has good comments here. Felix Salmon muses on what an ideal system might look like here:
The NYT system should instead simply measure how much you used the site last month, and then bill you; my guess is that Apple, when it releases its new tablet later this month, will also unveil a system which makes it very easy to link your nytimes.com account to your iTunes account so that your NYT bill will simply get added on to your iTunes bill along with your apps and TV shows and music and ringtones. The NYT itself won’t even need to collect your credit-card information. Once you reach a certain maximum billing level for the year, the NYT and Apple will just stop billing you.
The comparison with iTunes is interesting. For a while, it seemed as though free access to all music was an inevitable development, but pay music sites seem to have found a workable model, for the time being at least. Perhaps that model can be extended to include news.
The problem there is that the valuable good—the song—is a copyright-able piece of information. It was possible to make consumers feel bad about getting something legally protected for free, and it was possible to prosecute violators. Once a simple and affordable pay system arrived, the music theft penalities and stigma helped it become a sustainable system.
But news can’t be protected by copyright. Once the New York Times reports a story, there is nothing to stop a paying subscriber from distilling the key information into an easily digestible blog post, which can be made available for free. Indeed, if the New York Times takes itself out of the free online news business, that just increases the incentive for other start-up firms to collect, aggregate, and publish the key details faster and more effectively. Since such businesses would have very low overhead, they’d only need to capture a small share of the Times‘ readership to make a profit, and to drain the Times of potential customers.
To make its model work, the Times needs to produce work over which it can assert a property right, and news discovery doesn’t count. That’s why I tend to think that the news sites that will survive will be those that develop a specialty in protectable content—the actual writing, for instance, or a networking experience. And ultimately, reporting will not survive as a for-profit business.
That, at least, is what the economics would seem to suggest. But perhaps one news organisation or another will prove me wrong.
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