The Gray Lady paywall: will others follow NYT?

Last week the New York Times started charging Canadians for access to online content, and it plans to roll out its U.S. subscriptions this week. Good idea or bad idea? Rob Washburn reports.

The New York Times’ launch of its new pay system in Canada last week (and subsequent arrival in U.S. next week) stirred up the news industry and media commentators as companies scramble to find a workable economic model for the future.

After 14 months of planning, NYT decided to use the Canadian market as a testing ground to work out bugs before going global. It will offer 20 free article views per month with a range of online options for those receiving home delivery to those wanting various apps for tablets and smartphones.
The company was very careful not to lose the vital aspects of social media, allowing people to read articles via links from blogs, search engines, Facebook and Twitter. Some aspects of the paper will remain free, such as the home page, all section fronts, blog fronts and classifieds. Mobile apps will carry the “Top News” sections without a charge.

Paid Content provides an excellent summary of the plan.

Hackers have already found a work around for the site, allowing more than 20 free views.

And, the various bloggers and commentators are drawing the old battle lines regarding why the pay wall system will work or not. But, as one blogger put it, the NYT is trying to find a middle ground, balancing the Internet culture of free information with the real need for news organizations to generate a new economic model that works.

Canadian news organizations will be watching this experiment closely, as well as Rupert Murdoch’s iPad daily, launched a little more than a month ago. These are two of the most serious efforts to resolve the ongoing issue of increasing online revenue streams
The Canadian Newspaper Association released its figures last week saying total revenues were up to just over $3 billion, a rise of 3.7 per cent over 2009 with online revenues increasing by 15 per cent over the same period. The reasons for the success are varied and complex, but it appears Canadians are doing slightly better than American publishers, according to the International Newsmedia Marketing Association.

There are plenty of implications. But the central question stirring up all the commentary is simple. Will the NYT experiment be the model for the future?  Is it possible we will see large urban papers in Canada adopt a similar system? The Globe and Mail already has a pay system in place, while the Toronto Star and National Post do not.

Pay system are used successfully at the Financial Times and Wall Street Journal. But both these newspapers are specialty business papers with unique content aimed at a particular, narrow audience. Most likely, the accounts are purchased through businesses and not paid for by individuals. The Times of London went to a pay system and lost nearly 30 per cent of its online audience.

Canada’s daily newspapers will not be able to simply use the NYT experiment as a template. No doubt, some aspects may translate, but don’t expect to see a wholesale adoption. The same holds true for Murdoch’s venture.

While it is tantalizing to watch the NYT, it is imperative Canadian news media bring forward its own solutions. Even then, what will work in Toronto may not work in Montreal or Vancouver. And, what works in those markets will be completely different from what will work in rural Canada.

What is inspiring is the experimentation. To sit back in the weeds and wait is no strategy. It will be interesting to see how Canadian news companies move forward and what lessons were divined from the NYT model.