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ink-stained wretches

New York Times Ready to Charge Online Readers

Sulzberger Jr.

New York Times Chairman Arthur Sulzberger Jr. appears close to announcing that the paper will begin charging for access to its website, according to people familiar with internal deliberations. After a year of sometimes fraught debate inside the paper, the choice for some time has been between a Wall Street Journal-type pay wall and the metered system adopted by the Financial Times, in which readers can sample a certain number of free articles before being asked to subscribe. The Times seems to have settled on the metered system.

One personal friend of Sulzberger said a final decision could come within days, and a senior newsroom source agreed, adding that the plan could be announced in a matter of weeks. (Apple's tablet computer is rumored to launch on January 27, and sources speculate that Sulzberger will strike a content partnership for the new device, which could dovetail with the paid strategy.) It will likely be months before the Times actually begins to charge for content, perhaps sometime this spring. Executive Editor Bill Keller declined to comment. Times spokesperson Diane McNulty said: "We'll announce a decision when we believe that we have crafted the best possible business approach. No details till then."

The Times has considered three types of pay strategies. One option was a more traditional pay wall along the lines of The Wall Street Journal, in which some parts of the site are free and some subscription-only. For example, editors and business-side executives discussed a premium version of Andrew Ross Sorkin's DealBook section. Another option was the metered system. The third choice, an NPR-style membership model, was abandoned last fall, two sources explained. The thinking was that it would be too expensive and cumbersome to maintain because subscribers would have to receive privileges (think WNYC tote bags and travel mugs, access to Times events and seminars).

The Times has also decided against partnering with Journalism Online, the start-up run by Steve Brill and former Journal publisher L. Gordon Crovitz. It has rejected entreaties by News Corp. chief digital officer Jon Miller, who is leading Rupert Murdoch’s efforts to get rival publishers onboard to demand more favorable terms from Google and other web aggregators. This fall, Miller met with Times digital chief Martin Nisenholtz, but nothing came of the talks.

The decision to go paid is monumental for the Times, and culminates a yearlong debate that grew contentious, people close to the talks say. In favor of a paid model were Keller and managing editor Jill Abramson. Nisenholtz and former deputy managing editor Jon Landman, who was until recently in charge of nytimes.com, advocated for a free site.

The argument for remaining free was based on the belief that nytimes.com is growing into an English-language global newspaper of record, with a vast audience — 20 million unique readers — that, Nisenholtz and others believed, would prove lucrative as web advertising matured. (The nytimes.com homepage, for example, has sold out on numerous occasions in the past year.) As other papers failed to survive the massive migration to the web, the Times would be the last man standing and emerge with even more readers. Going paid would capture more circulation revenue, but risk losing significant traffic and with it ad dollars. At an investor conference this fall, Nisenholtz alluded to this tension: "At the end of the day, if we don't get this right, a lot of money falls out of the system."

But with the painful declines in advertising brought on by last year's financial crisis, the argument pushed by Keller and others — that online advertising might never grow big enough to sustain the paper's high-cost, ambitious journalism — gained more weight. The view was that the Times needed to make the leap to some form of paid content and it needed to do it now. The trick would be to build a source of real revenue through online subscriptions while still being able to sell significant online advertising. The appeal of the metered model is that it charges high-volume readers while allowing casual browsers to sample articles for free, thus preserving some of the Times' online reach.

Landman disputes the notion of competing factions. "The idea of two camps is just wrong. There's many shades to this,” he told me. Inside the newsroom, the protracted talks have frustrated staffers who want clarity on where the paper is headed. “It’s a real problem,” one staffer explained. “It’s embarrassing and reflects badly on the Times that they can’t make a decision. They’re fighting among themselves.”

What makes the decision so agonizing for Sulzberger is that it involves not just business considerations, but ultimately a self-assessment of just what Times journalism is worth to the world. This fall, Keller told the Observer that at some point, the decision is a “gut call about what we think the audience will accept.” Hanging over the deliberations is the fact that the Times’ last experience with pay walls, TimesSelect, was deeply unsatisfying and exposed a rift between Sulzberger and his roster of A-list columnists, particularly Tom Friedman and Maureen Dowd, who grew frustrated at their dramatic fall-off in online readership. Not long before the Times ultimately pulled the plug on TimesSelect, Friedman wrote Sulzberger a long memo explaining that, while he was initially supportive of TimesSelect, he’d been alarmed that he had lost most of his readers in India and China and the Middle East.

“As we got into it, it was clear to me I was getting cut off from a lot of my readers in India and China where 50 dollars per year would be equal to a quarter of college tuition,” Friedman recently told me by phone. “What was coming to me anecdotally from my travels was the five worst words that as a columnist you ever want to hear: ‘I used to read you before you went behind the wall.’”

Friedman is now “pro some kind of pay model,” he says. “My own feeling is, we have to do anything we can to raise money,” he told me. “At some point we gotta charge for our product.”

I asked Friedman whether any of the technologists he meets during his globe-trotting had presented any groundbreaking ideas for how to save the Times and journalism. While he’s optimistic about the coming crop of tablets and e-readers, the answer is no. “We’re in a megatransition. It hasn’t ever felt like anyone has the answer,” he said. “My macro feeling is that I’m glad I had this job at this time. It was great working at the paper when it was on dead trees and could pay for itself.”

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