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It's not a paywall (part 2)

Submitted by yelvington on March 17, 2011 - 1:14pm

The New York Times has (finally) unveiled details of its metered-access digital subscription system to predictably mixed reviews.

As I've said, it's not a paywall, and using that word steers you toward misunderstandings. Think of it as rate-limiting. Light usage is free; heavy usage brings a request for payment.

A paywall, by contrast, is a dumb, blunt instrument that separates content from the general public, prevents sampling, inhibits linkage and sharing, and usually is the product of an unhealthy arrogance.

There is potential in metered access without damaging the advertising revenue stream or cutting a site off from the Web.

Earlier this week Alan Mutter wrote about the Augusta Chronicle, reporting that "page views rose a nifty 5% in the three months since the Georgia newspaper installed a metered system."

No one knows how this will play out over time, but the early numbers from Augusta and other sites where this technique is being piloted should not be surprising. They're performing as designed.

There is actual science behind all of this -- not just a back-of-the-envelope calculation, but extensive modeling based on detailed frequency-of-use accounting of real website traffic.

The configurations and threshholds that you're seeing are specifically intended to leave the vast majority of visitors untouched, while focusing on the much smaller audience that already sees high value in the website and has demonstrated that through heavy, frequent usage.

The upside is worth thinking about. Gordon Crovitz was quoted by BusinessInsider.com: "We estimate the N.Y. Times should be able to generate $100 million in new revenues with this approach." That's based on a mathematical model that includes some key assumptions. The only way to discover whether those assumptions are valid is to test them in the real world.

It is possible, of course, to beat the New York Times meter, or for that matter any meter, and it's not even as hard as Cory Doctorow suggested. (Think "incognito mode.") It's also easy to read a newspaper while standing at a newsstand, or to take two copies from the dispenser in front of IHOP while paying for only one.

But so what? It's not supposed to be a bank vault, people. It's a polite request for payment. I am fairly certain that if you flush your cookies and your HTML5 local storage and disable Flash, the New York Times Website Payment Police will not track you down.

This is a matter of large numbers and is not about you.

It's also worth noting that this may not work, and that there are risks, and that the external economics could change at any time.

By targeting its heavy users, a news site also targets its best, highest-quality set of eyeballs from an advertising perspective. Advertising campaigns require repeat exposure to a message in order to be effective. Driving away repeat users would immediately undermine the site's value proposition even if gross traffic levels remained fairly strong.

And the external economy could shift. I'm fairly certain we wouldn't even be having discussions about charging for content if the economy were booming and advertisers were beating down the doors.

Comments

The Times tried this before. Much of their news was free, but if you wanted their best content, you were asked to pay $50 a year. I paid that willingly. Not a problem. The quality is good, and I want them to survive and thrive. That experiment FAILED. So, about 3 years later, they're quadrupling (quintupling, if you own an iPad, as I do) the price and trying it again, and it will fail even more miserably. Yes, there are people who don't want to pay for anything. The Times screwed up this time because they priced the subscription far too high. If you would bother to read the comments section at the paper (and the comments when they posted this on their FB page this morning, before they deleted the post), there were few complaints about the Times charging. Almost all of the complaints were about HOW MUCH. Most people only pay $30-40 a month for their broadband connection; now they're expected to pay $15 for access to ONE SITE? That's how much I would pay to have the newspaper physically delivered to my home, including newsprint, ink, transportation and delivery. Who thinks this is a good idea? And it IS a paywall. You get 20 articles a month, and then you go from $0 to $15, even if you only read another 5 articles. A lot of people will sign up with the Times using several IDs, and get 20 per ID, if they really want to cheat the system. A dollar a week, and they would have a winner. But $3.75 - $5 a week, in a country that's struggling to beat a recession? They have to be kidding. And you have to be kidding if you think they'll make MORE money this way. By the way, the Augusta Chronicle charges $6.95 a month, not $16.25 - 21.67 per month. ($15-20 every four weeks). That's a huge difference.