"Finally, a note about why we will not be concentrating very much on the fate of the New York Times. A remarkable amount of what has been written about the fortunes of American journalism over the past decade has centered on the question of what will happen to the Times. We believe this focus has been distracting.
"In the last generation, the Times has gone from being a great daily paper, in competition with several other such papers, to being a cultural institution of unique and global importance, even as those papers—the Washington Post, Chicago Tribune, Los Angeles Times, Miami Herald, among others—have shrunk their coverage and their ambitions. This puts the Times in a category of one. Any sentence that begins “Let’s take the New York Times as an example ...” is thus liable to explain or describe little about the rest of the landscape.
"The Times newsroom is a source of much interesting experimentation—data visualizations, novel partnerships, integration of blogs—and we have talked to many of our friends and colleagues there in an effort to learn from their experiences and make recommendations for other news organizations. However, because the Times is in a category of one, the choices its management can make, and the outcomes of those choices, are not illustrative or predictive for most other news organizations, large or small, old or new. We will therefore spend comparatively little time discussing its fate. While the Times serves as an inspiration for news organizations everywhere, it is less useful as a model or bellwether for other institutions."
An actual paywall would be a lot less likely to work, because when people get to a paywall, they can't see what they're supposed to be buying, so they just go away and never come back. By contrast, this "works" because it gives people what they want unconditionally and then having accepted it without paying, guilts them into making a donation. Nonprofits have been running on this model forever.
But the real question is whether it's actually "working" -- the conversion rate to paid subscribers is evidently around 2%. That's pretty bad. And then they call it a success because it makes up 50% of their revenue instead of 20% as was traditionally true, but is that because subscriptions are up or because print advertising has been falling for so long? They only quote the most recent rate of change rather than the long-term numbers, and there may be one of these going on: [http://xkcd.com/605/]. When you first open a new revenue model, you can pretty well expect the first couple of years to have a higher growth rate than the ensuing years. Once everyone is subscribed who wants to subscribe, you have a hard time achieving any more subscription growth. And if subscriptions stop growing faster than advertising is falling, they're right back into the death spiral of cutting costs to save money which reduces readership which loses revenue which induces cost cutting.
The first segment consists of customers with a higher willingness to pay that aren't aware of the paywall workarounds or enjoy accessing the Times without futzing around. Who are these readers? Readers with high disposable income, older readers, and heavy readers.
The second segment consists of customers with a lower willingness to pay, who have identified the workarounds, and are willing to deal with the additional steps involved in bypassing the paywall. Who are these readers? Readers with lower disposable income, younger readers, and light readers.
The result of this segmentation is that the New York Times has been able to attract a significant number of online paying subscribers (segment 1), without decimating its overall readership figures (segment 1 + 2). By maintaining its overall readership figures, the New York Times has been able to preserve its online advertising revenue.
 Since the product is nearly the same for both segments, aside from the steps involved in bypassing the paywall, you might consider this as an example of price discrimination.
I also keep a rather extensive blocklist of URL-patterns I don't need my browser to load, ever. It took quite a while before I noticed (on a friend's computer, about 1.5y ago) that YouTube makes you watch ads before a video. I actually have no idea how that particular URL-pattern got into the blocklist, since I honestly hadn't seen those ads before. I suppose I was messing around with the webdev tool one day, noticed some resources that seemed unnecessary, I disabled them, videos continued to work fine, and forgot about it.
I realize this places me securely in the second segment, of course.
And to everyone who objects "It's one step!", remember Step Zero:
Knowing it can be done.
Which implies Step Negative One:
Caring enough to find out.
It's hard to take those steps. There are, in point of fact, very likely a huge number of Steps Negative One you haven't yet taken, or are not going to take. I know that's true for me.
Were there worlds enough, and time, perhaps, but not as long as I'm living on the fourscore and ten plus change.
Currently, the New York Times is to the news world what mainframe computers were to the computer world. People still pay money for mainframe computers, but only the people at the very top end of the market, given that a mainframe computer is feature rich and expensive.
Similarly, NYT is the most feature rich, extensive and wealthy masthead in the entire news world. People will continue paying for it in the same way that people pay for mainframe computers, but this doesn't mean they haven't been disrupted. The market for other news is far, far bigger and in the coming years will make NYT look like a drop in a vast ocean.
Agreed 100% though - amazing presentation. Just the right amount (and format) of multimedia in a way that added to the story without being overly flashy/showy.
I have seen a lot of links/comments on that story in a wide variety of different communities, including those that are less traditionally interested in internet/multimedia design than HN, so it certainly did generate some good publicity for them.
There's at least one person from the digital side of the Times that contributes to Hacker News, the person that wrote the fantastic Emphasis. (I've been looking for a chance to use it.) Wonder if he'll -- forgive the ambiguity, I've forgotten his username -- show up in this thread and shed some light on our speculation.
EDIT: Ah, he's left the NYT.
I didn't have anything to do with Snow Fall, but I did frequently walk past the people who were working on it late at night. We don't have anything formalized like 20% time, but these projects are definitely a labor of love.
I know a couple people that are getting picked up by newsrooms for "startuppey" digital lab work, data visualization, that kind of thing. Your publication is definitely setting the pace for the field at large these days, and it's a good thing.
They can afford to put in a bit more expense in building an impressive article.
So the interesting part of all of this is that people choose not to bypass it and pay. The reminder that they need to pay alone seems to be working.
As long as you establish that the content is worth money, a lot of people are more than happy to pay for it.
As time goes by and the unsustainability and injustice of the "all content should be free" mantra becomes widely recognized, a much clearer line between contet that is and is not worth paying for will crystallize—and with it, the social attitudes that work with or against payment for publishers, depending on the surrounding expectations.
The Times has done a solid job of positioning itself. Pity those that lack the resources an foresight to do the same.
The other day, I found out we're now using that figure of speech against the intent of the original phrase: a custom best ignored, e.g. http://afterdeadline.blogs.nytimes.com/2012/01/17/mangled-sh...
In this case, I like the modern take, because it provides us with words for a real phenomenon. I dislike some other modern takes, such as the literal "beg the question", that deprive us of precise meaning (petitio principii, http://en.wikipedia.org/wiki/Begging_the_question ).
Educated people managed to save the word "irony" from Alanis Morissette, I don't think "beg the question" is lost yet.
I don't know if anyone ever debated the notion that paywalls will produce revenue, and it's great that the NYT earns more from its paywall than many industry analysts expected.
But the fact is, even at the revenue levels that it may produce in upcoming years, it still costs more to produce that content than people are willing to pay for it. This is the big hold-up with journalism. Even if people will spend a billion dollars a year purchasing your newspaper, if it costs you two billion dollars to produce it you're screwed.
I'd say most people mean "the question remains..", "...fails to answer the initial question" or "...leaves the question X unanswered" when they say "...begs the question". Unfortunately, none of these more correct phrase have the same flourish. What to do...
Nearly every newspaper in the United States sees that by switching to free, digital content, they only earn a small fraction of the revenue that they did from the more heavily based subscription model. The response to this was to erect "paywalls," or requiring a subscription at some point online, in order to recoup done of the lost revenue.
What we are finding (and the NYT is the 600-pound gorilla in journalism and arguably the most important case study) is that some people are willing to pay for access to digital content.
The problem, however, is that the cost to produce this digital content is currently still greater than the revenue it brings in. Yes, the New York Times loses money every year - it's publicly traded and its profit and loss statements are publicly available, so there's no assumptions being made; they are losing money. A lot of it. They're publicly traded and have a lot of retained earnings, so they can afford to do this for a while, but they are losing money every year nonetheless.
Hence why I specifically asked:
"""Alternatively, are you saying their costs are going up dramatically to compensate for this increase in revenue, and that, in fact, they are now losing money and will soon die?"""
Is your claim that the costs this content digital (developers, designers, etc.) are drastically higher than making physical papers(which are sufficiently expensive that papers normally take a loss on sales)?
One other possible option (although from the same "alternatively"): are you saying that the digital content is much more expansive, not by a little (the online blogs and image rolls) than the paper content that their costs went up?
I specifically left the outs regarding the costs increasing, and no one is arguing that: I got back a fairly useless "what?" followed by your argument that doesn't seem to be informed by the scant numbers in the article. :(
Obviously, though, you aren't going to do that, because you didn't even use the numbers from this article, so I went and pulled New York Time Company's SEC filings and some historical expense reports.
It is clear from their filings that 1) advertising revenues are decreasing, but not by much, 2) as the article states, circulation revenues are increasing enough to compensate, and 3) their costs have not increased in the last 4 years.
Why, then, do you make this assertion that their product costs more to make than to sell? Again: either 1) that means their income is down (it isn't, per the article), 2) they were never profitable in the first place (not true, by common sense), or 3) their costs are up.
#3 is the only plausible option, and neither the person I responded to not the responses to me are justifying that position, and it really doesn't seem justifiable from the data they release on their financials.
I am glad that this is working model/experiment. To not alienate much of the eyeballs while putting effort to make the paying subscribers experience better.
I'm curious what price you would be willing to pay for access to all of the Times content.
Personally, I find that 15 USD a month is a fair price for an abundance of news that seems high quality (perhaps I've been duped?). There's all the multimedia, the arts section, the magazine, and, of course the news (both world and US).
Do you not enjoy as many sections as I do? Or do you share my interests but find 15 USD too steep a price for the content?
I also wonder, does means affect your choice? I recognize that the value of money is sometimes inversely related to how much you have.
$15 per month is too much for a bunch of content that I'm mostly not interested in.
In theory I'm paying £200 per year for Wall Street Journal; £270 for Financial Times (standard, not premium); £117 for the Economist - well, these three are nearly $1,000 per year. Add in a UK daily paper (because that's where I live); and Private Eye, and something like Monocle and the costs are easily over $1,000 per year.
So, I gently write to newspapers and ask them to include tipjars on articles (so they know how much people actually value good writing); and I leave ads turned on but ask for single-article payment systems to allow me to view ad-free articles; and I hope that something gets done to implement micro-payments because it'd be awesome.
PS: Why are newspaper websites so awful?
EDIT: Here's my complaints screenshoted.
Are you saying the NYTimes is not a good value or that, it's simply not a product you seek because you're already amply satisfied by WSJ, FT, the Economist, etc.?
It just seems weird to me to call something too expensive when the real reason is that you've already purchased it, just from someone else.
Unless you think the cost to journalistic quality ratio of the aforementioned papers and magazines is superior to the NYT?
I don't want all of it. I want a couple of articles a week. Those articles are worth $0.50 at most to me; but probably much less. (I have no idea how much they'd get for ads for my view for any articles I want to read).
I mention those other journals because there is so much good journalism that buying all of it for a whole year is not practical for most people. People will pick and chose. At the moment they chose to include one paper for a year and exclude other papers for that year. But it'd be better if they could just pick and chose and pay for any individual article they wanted to read.
Also I have never been fan of the subscription model when it is about consuming content and not providing service.
But I believe that NYT reporters are providing a pretty important public service, especially in this day and age of many "journalists" not taking the time to do more than parrot official talking points. Not saying the Times never does this, but they do have some of the better reporting in the industry in my experience.
The NYT paywall is meant to be a deterrent or an annoyance, not an iron curtain.
Felix Salmon from Reuters wrote a good piece about the psychology of it all a while back: http://www.wired.com/business/2011/08/new-york-times-paywall...
The paywall is not much of a deterrent and circumventing it isn't terribly annoying, either. While I am sure there are plenty of people who pay for a subscription because they feel the content is worth the money, I would guess that there are far more who pay because they lack the computer literacy to know how to edit the address bar in their browser. I find it distasteful to make money off of others' ignorance, and i find it insulting because the success of the business model hinges on the hope that we are all that ignorant.
But you are using the lawn. Keep that in mind. You are demanding they enforce their pricing scheme.
You're effectively the kid who ignored the "Please take only 1" sign above the bowl of candy on Halloween.
If you don't find that analogy compelling, don't bother commenting. Those types of comments are, in essence, "Well actually"-type posts which are insulting to the community here.
It's probably a mixture of people that would cheat if they knew how and people who simply choose to be honest. It's hard to ascertain how big each of those categories is.
Compare the NYT with Adobe here. They both have lousy protection against piracy because they see piracy as the lowest tier in a price discrimination scheme. Poor student who can't pay? Sure, go ahead and circumvent whatever barriers we've put up. Can pay? Then do.
In any case, I don't find "if only people were smarter, they could cheat more" to be a very compelling argument.
Looking forward, Google's attempt at replacing paywalls seems compelling and definitely a step in the right direction(I'd like to give away all of our content for free), but it needs to be refined. There is no guarantee the surveys will deliver accurate results.
See if you can reproduce this. Go to nytimes.com and just start clicking on different stories. After about 10 I got a little popup saying "This is your last free article of the month", but the next few articles still displayed with no problem, with the exception of a single full-page click-through ad at one point. Have clicked on about 50 articles now with no impediment. Pretty curious. Does it only count clicks coming from external sources? If so, why does it tell me that I'm on my "last free article" after clicking around for a bit?
Running Firefox on Linux, with no funny business except Ghostery, which I have configured to let ads through.
So I take it you don't know what Ghostery does? That's why you're not bumping into it.
Disclaimer, but hopefully not a disqualifying one: I'll be launching a paid subscription service next fall.
I've felt that way before, too. There are times I show someone something that is technically simple (to me) but, when I try to show it to someone, I see a glaze go over their eyes.
Part of the problem is that what I think is technically simple, really isn't because it requires background knowledge that I forget they don't have. Even if it's a basic technical knowledge that's lacking, it's still one more thing they need to learn before they learn this "simple" task I'm trying to show them.
Another issue is disinterest. If they really aren't interested in the solution, they won't give it much effort. In your case, people seem to be comfortable paying for the Times subscription, so they're probably not interested in learning about how to get around it.
(edit: Because it allows students and tech-literate people to get to the content for free. So NYTimes content will do very well on social media sites, which in turn keeps the NYTimes relevant for younger people. Who will get a subscription when they graduate and become professionals.)
Paywall limits access to people who pay (subscribers) => more people pay => Times gets more revenue. What's not to understand?
Additionally, in print media, subscriber revenue surpassing advertiser revenue is huge and not something that would be likely to happen without a successful digital product for a couple reasons.
Beyond that, yes, there's nothing here but correlation. However I think there is enough in the first two paragraphs to make a case.
The question is, how long will these subscriptions take to pay for themselves, and will paid users stick around that long?
Advertising isn't that simple; if it were, it'd be a lot different.
Spending tens of millions of dollars airing the high-quality commercials that the NYT had commissioned? I doubt what they did was simple, but it was damn sure expensive.
On my Nexus 7, I use Firefox instead of Chrome because (1) I can use stylize to make it white text on black background, and (2) it has a built-in reader that makes the articles easy to read.
The biggest "problem" is that it will be harder to build as many giant media companies around general news distribution. On the other hand, a bunch of smaller players will have a chance to flourish. A lot like modern digital music.
In other words, they're charging so much, and the cost of digital distribution is so low, that they're making a ton of money from this paywall. They shouldn't be. Advertising should be the bigger source of revenue. It's like the government running at a massive surplus - time for a tax cut.
The NYT can rely on its name: we all know it's good, and its been around forever. Their target audience is the educated middle-upper-class. Many will pay, and they'll make money.
But very few existing news organizations could successfully implement a paywall, and zero new organizations could. The only really successful business model on the internet has been "freemium", and free, but ad-based: Google, Facebook, etc. So this one exception occurs; great. But I'm saying lets not all get excited and start suggesting that next tech startup launch with a paywall. "But the NYT did it successfully" will be their last words.
I was trying to subscribe to NYT months ago because a wonderful piece they did and I thought I should offer my share of respect. Unfortunately I tried with Paypal many times for about one hour and still couldn't get the payment through. Then I gave up.
I wonder if Rupert Murdoch has been approached by Facebook or anyone..?
I pay $20/month to read the Times in bed on my iPad. I mean, it's five trips to Starbucks/Peet's/whatever, guys. The majority of you are programmers clearing high-five or even six figures for, in the grand scheme of things, easy work (not exactly breaking rocks, are we?). Don't forget, those of us who even know how to edit cookies or alter referrers are a small minority; the Times doesn't care if you bypass it because they know you will no matter what.
If I have ever read a comment that summed up HN perfectly, that was it.
It only keyed in my memory because I watch people pay $4 for coffee every work day but balk at something that's $80/month, or even $20/month (in this case). Perspective is strange.
And I can only speak for myself when I say I consider Starbucks coffee prohibitively expensive. In that respect, the comparison is apt.
Once or twice in the last year, I've hit the ten-article limit. One of those times, I actually cleaned out the cookies.
> those who know how to edit cookies or alter referrers
On a global scale, these are both minorities, and I'm not even so sure which one is tinier.