NY Times lays foundation for paywall

Posted by Leah McBride Mensching on January 18, 2010 at 5:00 PM

The New York Times is expected to announce within days that it will charge for access to its online news content. After much in-house debate, the paywall is expected to be along the lines of what the Wall Street Journal uses, as well as a metered system such as the one the Financial Times uses, New York Magazine reported yesterday.

However, the big question isn't whether The Times will charge, but what kind of a paywall it will be.

Felix Salmon wrote in his Reuters blog that:

"The first and most important principle that the NYT must bear in mind is that any smart metering system will work more like a taxicab than like the dreadful FT approach: the key thing is that a meter measures how much of the service you've consumed, and then you pay for that much -- and no more. At the FT, by contrast, the meter slams down a hard paywall after you've reached n pageviews in a given month, and then charges you a very large sum for the n+1th pageview. That's stupid, because no single pageview is worth that much to a reader.

"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 Economist points out today that unlike music, which has found a sustainable online paid model, news can't be so easily protected by copyright. Even with paywalls, if The Times reports a story, a paying subscriber can write up the information into a short, snappy blog post which people can then get for free. So, to make this new model work, newspapers must "produce work over which it can assert a property right, and news discovery doesn't count." Content that can't be duplicated, such as a networking experience, will have to be part of the value proposition for newspapers with paywalls.

As for when the paywall announcement will be made: "We'll announce a decision when we believe that we have crafted the best possible business approach. No details till then," Times spokeswoman Diane McNulty told New York Magazine.