Submitted by Yi-Wyn Yen01.15.2009
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This prediction is closed and has been judged.
The New York Times is in financial trouble. The Times is using up a $400 million credit line that ends in May and drawing from its 2011 line of credit. Though the company defends that it is in "better position than many others in the newspaper business," the Times is looking into a few business deals like selling its stake of the Boston Red Sox and entering a sale-leaseback of their new Times Squares headquarters to stay afloat.
Silicon Alley Insider blogger and former financial analyst Henry Blodget suggests that the NYT starts charging users $80-$100 a year to read its web content. The Times stopped charging readers to access certain articles by columnists and the newspapers' archives in Sept. 2007.
Prediction: The NYT announces that it will charge readers a web subscription by the time it reports Q2 2009 earnings in late August. The Times currently charges readers a fee to access content from 1923 to 1986 and is not defined as a web subscription.
Image: Kevin Prichard/Flickr
Price History
Prediction Statistics
| Betting Closes: | Aug 26 2009 | Current Consensus: | 10.91% | Total Bets: | 68 |
| Today's Change: | 0% | ||||
| Life Time High: | 75.95% | ||||
| Life Time Low: | 9.11% |
Comments
Would the prediction be considered successful if they started charing for a section of the site - for instance business and finance, rather than for the whole site?
Yes, if the Times starts charging for a portion or all of their NYT.com content the prediction will be judged a success.
This is a lesson that NYT had learned when they launched TimesSelect in 2005 (a paid web subscription to its content). It was abandoned two years later on September 18, 2007 for the following reasons:
“But our projections for growth on that paid subscriber base were low, compared to the growth of online advertising,” said Vivian L. Schiller, senior vice president and general manager of the site, NYTimes.com.
What changed, The Times said, was that many more readers started coming to the site from search engines and links on other sites instead of coming directly to NYTimes.com. These indirect readers, unable to get access to articles behind the pay wall and less likely to pay subscription fees than the more loyal direct users, were seen as opportunities for more page views and increased advertising revenue.
“What wasn’t anticipated was the explosion in how much of our traffic would be generated by Google, by Yahoo and some others,” Ms. Schiller said.
The Times’s site has about 13 million unique visitors each month, according to Nielsen/NetRatings, far more than any other newspaper site. Ms. Schiller would not say how much increased Web traffic the paper expects by eliminating the charges, or how much additional ad revenue the move was expected to generate.
Reference: http://www.nytimes.com/2007/09/18/business/media/18times.html?_r=1
Someone once told me ... that a website success is all about "eyeballs". How many eyeballs can you get to look at the content and for how long? All that translates to how much ad revenue it would generate. This is the same reasons which continues to be true and should NYT revert to charging for content, it will most likely result in a net revenue loss. IMHO, this prediction has only one foregone conclusion ... NYT web content will remain available without a subscription.
@Yi-Wyn, just to be clear ... accessing past articles is on-demand and any charges to that does NOT count as web subscription as dictated by the prediction criteria. Please confirm.
Hi David, Yes that is correct.
Web ad revenue isn't going to be enough. There's a reason why the WSJ's still subscription-only.
WSJ is still subscription only because it had content that is not readily available elsewhere. Even Murdoch at one time was considering tearing down the subscription wall but decided for a 3-tier approach.
How desperate are things at the Times? The company
borrowed $250M from Carlos Slim, the world's richest man, to help refinance the company's $1.1B debt. The money buys NYT some breathing room, but now the Times owes even more money.
I wouldn't be surprised to see the NY Times do something like the WSJ's approach, which appears to be working, out of sheer financial necessity.
Some truth in this?
David, thanks for the link to Felix Salmon's column. Based Felix's arguments I have actually increased my bet in favour of Blodget's position.
Here's the ugly of NYT quarterly earnings per paidcontent.org:
Internet ad revenues included in the News Media Group fell 12.3 percent in December, as the NYTCo cited weakness in both display and online classified advertising. Looking back to its December '07 revenue report, online ad dollars were merely weak, rising a then anemic 2.7 percent in the News Media Group, but strong display pushed total web ads up 20 percent. What a difference a year makes. In Q4, internet advertising revenues included in the News Media Group were down 3.2 percent compared with the Q407, as declines in the online classified categories offset modest growth in display advertising.
The Times has hired Goldman Sachs to see if it can its stake in the Boston Red Sox. Another couple bad quarters and I wouldn't be surprised if they decide to start charging folks for web reading.
FT.com managing director discusses how web-based subscriptions work.
Bloomberg reports NYTimes is now seriously discussing charging for web content, quoting company execs
So I've just upped my bet
Nice. I think I'll do that too. And read as much as the Times now while it's still free.
I suspect, if NYT decides to go with subscription content, it will be done in a multi-tiered approach (much like WSJ).
Here's a fun parody video on the NYT ads.
Some more grist to the mill
AB
I've been a daily reader of NYT.com for many years. Of course, I enjoy it being free, but it also does occur to me that at one time I willingly paid for it in the form of a newspaper. I think this whole financial situation is sobering, and I can accept the possibility of paying for NYT.com access. However, $80 to $100 a year is a bit excessive. I would be more willing to pay $5 a month or $60 a year.
More support for charging
HI, what's the "watch "feature?
The "Watch" feature is a feature that does exactly that. If one is interested in monitoring specific predictions without having an active bet, it can be added to the "watch" list.
Reuters reports that Cablevision plans to charge for Newsday website. The trend is this predictions friend.
Here is the article about the Cablevision's plan.
Hearst to start charging for online content
The NYT completed a $225 million lease buyback of its headquarters in order to generate more cash.
Some more from the NYT on the paid/free debate .
...and again : March 12 Bloomberg report says "New York Times Co. is studying ways to charge users for some Web site content to combat the grim economic outlook," according to Chairman Arthur Sulzberger Jr. said.
It will be really interesting to watch and see how successful the Times model is as the whole newspaper industry implodes.
A little more details about Arthyr Sulzberger comments ...
http://www.nypost.com/seven/03142009/business/pinch_mull_web_charge_1594...
http://www.businessinsider.com/henry-blodget-new-york-times-mulls-online...
From paidcontent.org - more on Arthur Sulzberger's comments
AB
http://www.paidcontent.org/entry/419-weekend-reading-nyts-sulzberger-adm...
I invented the advertising model back in 1995 when the browser was introduced for public use. I announced my idea on radio and six months later someone wrote a book around it. Looking back, it is hard to believe people had no clue how to make money from the Internet.
The reason people are struggling online now is because their mind still lives in the 20th century. This does not mean ads are the only way to go. However, the solutions I've seen thus far reflect archaic thinking. I'm working on a book project about this right now. :-)
The Rupe says newspapers should charge for content.
According to the report, -- "People reading news for free on the Web, that's got to change," said Murdoch speaking at The Cable Show
http://news.yahoo.com/s/nm/20090403/media_nm/us_cableshow_murdoch
An interesting and inevitable development.
http://www.nytimes.com/2009/04/15/business/media/15brill.html?ref=busine...
Two plans under consideration, decision to made by the end of June, says this source:
http://www.observer.com/2009/media/new-york-times-considering-two-plans-...
If true, it's not clear if it would be announced right away.
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/ilamont
If either of the models outlined in the link supplied by Ian Lamont
http://www.observer.com/2009/media/new-york-times-considering-two-plans-... is adopted would that meet the criteria of for success under this prediction: New York Times charges readers a web subscription?
Andrew: I'd have to say "no" for the a meter system, but maybe for the other option.
A pledge is not the same thing as a subscription, but I'm wondering if the pledge system will serve as a de facto subscription -- for instance, you need to pledge a minimum of $X per year to access the content.
I'd say if it's a pledge system based on a minimum commitment and a fixed period of time, it should be considered a subscription, even if that term is not used.
What do others think?
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/ilamont
I think a minimum pledge in order to access the content sounds an awful lot like a subscription to me, but I'm biased since I bet Yes on this prediction
Dow Jones is reporting that NYT may charge a sub for mobile access. Would this meet the requirements of the prediction if true?
Andrew: No, a paid mobile app would not meet the criteria. The prediction references the Web -- i.e., accessed through a Web browser.
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/the_standard
The NYT is considering a subscription, according to reports in the Nieman Journalism Lab and elsewhere:
http://www.niemanlab.org/2009/07/dear-new-york-times-please-charge-me-mo...
If the Times moves quickly on this, a positive judgment on this prediction could be rendered.
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/the_standard
Not that many humans read newspapers anymore it's apparent you cant charge for information when it's free!
Why are we still waiting, one week later, for a judgement on this? They haven't charged for access. Let's get this off the books already, you're tying up "money". ;-)
Judged negative. Q2 transcript here:
http://seekingalpha.com/article/150955-the-new-york-times-company-q2-200...
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/the_standard
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