Needless to say, the New York Times’s decision to erect a “paywall” is a stupid one. What it calls its “metered model” may make sense in the short-term, re-establishing a sense of value, and maximising revenue from non-subscribers. But over the long, it goes against the grain of the web, and consigns the NYT’s journalists to obscurity – something they will surely resent. Forcing users to pay a flat fee for more than a set number of monthly articles (like the FT) may seem fair and reasonable (as in “why should people get something for nothing?”) – but then the Internet doesn’t really do reasonable. The paywall is yet another attempt to protect a business model that needs fundamental reform, not marginal tinkering.
What is depressing is that NYT’s executives seem incapable of more radical thinking. Essentially the decision is a re-run of the ill-fated Times Select experiment. The Times decided in September 2007 to go back to free-for-all after realising that it could not bring sufficient numbers to advertisers. Crucially, its top columnists resented writing for small audiences and pushed for the u-turn. The question is why management thinks things will be different this time?
Some people think that the time has come to make a stand against the anarchists who say Internet content has to be free. They argue that institutions like the NYT have the clout to make the market, giving cover to others to follow suit. When Murdoch announced his own paywall plan in the summer, observers wondered if he could bring the rest of the UK industry with him. Speculation has since followed of private deals between newspaper groups for a co-ordinated paywall push.
Commentators such as Nicolas Carr have backed the NYT’s decision on the basis that it segments the market based on willingness to pay. Thus, the NYT can continue to take in subscription revenue from “loyalists” and “traditionalists”, while making what it can from “freeloaders”. Carr says the NYT decision is smart “particularly when viewed in the context of the Times’s previously disclosed last-man-standing strategy” – which said that it would benefit from demise of newspapers, by picking up readers from failing outlets. Carr doesn’t however say that the NYT’s new plan will work.
Backers of the paywall, such as this BBC executive (how nice to rely on public money!) normally accompany their support with expressions of regret for the newspaper industry’s troubles, and talk of the need to protect quality journalism. This conflates different issues, however: the sustainability of a particular business model, and the future of journalism. Newspapers tell us that their survival is essential because they are the only institutions that can protect journalism. It may be, however, that lighter-weight models would serve journalism better, and that the problems of the newspaper industry are precisely what is hurting journalism.
The question is surely how to build a sustainable model over the long-term. Felix Salmon points out that the NYT’s move is one to protect short-term interests:
This is, of course, exactly the approach that the NYT’s management would take if it felt that it was managing a company in terminal decline, and wanted to squeeze as many dollars out of it as possible before it dies. Successful media companies go after audience first, and then watch revenues follow; failing ones alienate their audience in an attempt to maximize short-term revenues.
Salmon says the inevitable impact of a paywall is that bloggers will stop linking to NYT articles, because they won’t want readers not being able to access what they are linking to. The NYT will rely increasingly on “destination” visitors – people who come direct to the NYT, rather than via third-parties. Because of NYT’s legacy, the destination audience may remain fairly large (TimesSelect had 227,000 subscribers when it closed) but what happens when older and richer customers start dying off? How will the NYT reach new audiences?
If the game, then, is maximising readership and advertising, how should newspapers go? I think the first thing to recognise is that the Internet changes the position of the journalist vis-a-vis the news organisation. “Name” journalists, such as Thomas Friedman, have a lot more power than they used to. They don’t necessarily need an august masthead to reach large numbers, and as brands in their own right they don’t need the implied credibility either. Given his hatred of TimesSelect, we can safely assume how Friedman feels about being metered. He is just the sort of frontier-thinking type who could leave the NYT, beefing up his own web site and doing his own marketing. In this, he would be following some music industry stars, who have either gone out on their own, or re-negotiated superior deals with the labels.
Newspapers would do well to strike similar deals, rather than putting journalists under greater pressure, and limiting their audiences. A better idea would be to allow journalists to build up followings via their own blogs, and then splitting the ad revenue. This would give journalists an incentive to work harder at blogging, rather than seeing it as just another chore, and increase their sense of self-worth at the same time.
Writing in the Atlantic back in 2006, Michael Hirschorn explained how communities make more money than readers who click and move on:
Not only do you allow your reporters to blog; you make them the hubs of their own social networks, the maestros of their own wikis, the masters of their own many-to-many realms. To take but one example, Kelefa Sanneh is the pop-music critic for The New York Times. He is very likely the best music critic in the country, and certainly the best new Times music writer in years. Let’s say that Sanneh creates his own community around the music he likes. Or The Washington Posts Dana Priest creates an interactive online universe around her intelligence reportage. With editorial oversight only for libel and factual accuracy, Sanneh or Priest are allowed to do whatever they want on their sites (while their mother ships pour their resources into marketing them). In Sanneh’s case, allow other people to write music reviews under the Times/Sanneh “brand.” In Priest’s case, turn the site into a clearinghouse for global intelligence information, rumors, conspiracy theories, and so forth
The NYT has yet to say whether its blogs will be included in the metered plan (the FT’s blogs don’t seem to be). Salmon thinks they will be. Either way, what the NYT move shows is that the industry still doesn’t get it. To me at least, this announcement feels like a desperate late-era step when what is needed is a fundamental rethink. Aside from distribution, news organisations should also consider how the Internet could provide opportunities for novel types of news-gathering – opportunities that might also have the benefit of saving money. Surely a more distributed structure, in which more reporters and editors work away from a high-cost office, is the way to go. Rather than dismissing the blogosphere as “pajama journalism”, newspapers should look at why blogs have gone from strength to strength and try to incorporate the best of them. Instead of building large new office spaces (as the NYT, Guardian and Telegraph have all done in recent years), they should build more flexible, lower-cost models that play to the Internet’s strengths and give journalists the freedom to be creative and entrepreneurial.
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