What the NYT Pay Wall Really Costs

Finally delivering on a long held promise, The New York Times announced yesterday that it would debut a ‘pay wall’ around its digital products, first immediately for users in Canada and then at the end of the month for the U.S. and other countries. This is the culmination of a process that began in the dark days of the so-called Great Recession; I remember first hearing of it while employed at The Times in late 2008, I believe. There was much debate about it the next year, and an exploratory team, including myself, began putting together plans for it in the summer of 2009. By the time I left my job there in July 2010, the project was still evolving, and lots and lots of work remained to be done.

Whether the pay wall succeeds or not is an open question and I won’t pretend to know the answer. To be completely frank I was never a proponent of this concept and it was among the reasons I decided to leave my job there last year. Now that it’s upon us I hope it does succeed, actually, because The Times generates tremendous value for the public good and it would be terrific if we could find a way to continue to reward its talented journalists and staff for their hard work. Still, I can’t help but look at the effort that went into constructing this new revenue model and think that it has exacted an unfortunate opportunity cost on the company.

What Could Have Been

Depending on when you mark the start of the pay wall effort, it took The Times roughly eighteen months to get to this point, where they have a viable, launchable new product. That’s a long time for any company, but it’s a painfully long time to spend on a product that’s really for an audience that isn’t growing. The people who will open their wallets and subscribe will be the hard-core Times loyalists, and it’s generally understood that those folks fall into an older demographic, and that there are fewer and fewer of them every year.

There’s nothing wrong with building products for that audience, of course. But the world doesn’t stop while The Times gets its books in order. Newer, younger audiences are growing up into a world where The New York Times is an afterthought, and they’re forming patterns of news consumption that barely incorporate The Times if at all.

Just think what else could have been done with the time and resources that the company devoted to the pay wall: entirely new news products could have been developed, products that could engage a wholly different kind of audience and expand the company’s reach by several orders of magnitude. Flipboard was born in roughly that same time span; The Daily, for all of its imperfections, was conceived and launched within less than half that time; Groupon skyrocketed to prominence and tremendous revenue in that time, and over the course of the past eighteen months any number of other information-based startups and new products debuted and captured the public’s imagination. It’s exactly those kinds of innovations that The Times has needed for a very long time, frankly, but by focusing on the pay wall for most of the recent past, they effectively paused on that front for a dangerously long spell.

Ghosts of TimesSelect

The effects of this decision probably won’t be seen in the immediate future, but the long-term damage to the brand may be significant. The amount of notoriety that this new endeavor will receive is sure to be tremendous, but all the subtleties — and complex mathematics — of this new pay model are likely to be lost on most news consumers. Its many rules and semantics are simply too complex to be communicated effectively, and what’s more the marketing tends to use blatantly tricky language (e.g., “$15 every four weeks” — just tell me what I have to pay, already). I’m willing to bet that what most people will understand about this new development is that now you have to pay to read The New York Times. Period. With that misunderstanding, it wouldn’t surprise me if users start staying away in droves.

I saw something like this effect in action just last fall, at a dinner party held by some friends here in New York. Some of the other guests happened to be well-educated, high-income residents of Manhattan’s Upper East Side; exactly the kind of demographic that forms loyal attachments to The New York Times brand and that the company values dearly. And yet these people were under the impression that The Times’ Opinion content — widely-read Times columnists like Maureen Dowd and David Brooks — was restricted online to everyone but subscribers.

What they were referring to of course was TimesSelect, an earlier attempt at a different kind of pay wall that restricted only a subset of The Times’ online content to subscribers. The company shuttered that effort in the fall of 2007, and yet there we were, three years later, living with its lasting effects: at least a handful of The Times’ prime customers were under the impression that The Times was not 100% free when in fact it unambiguously was.

What a shame, I thought then. Now I wonder what people are likely to think this time around, when it seems like the entirety of the site is subject to the pay wall, and all of the reasons why it’s actually not as bad as that are being communicated in such a convoluted fashion? Not only has the company missed an opportunity to build something for new audiences, but they may also be signaling an entirely counter-productive message to their existing audience, and in a very lasting way. I worry.

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