It's the moment free-loading news consumers have dreaded for years. The New York Times has announced it's erecting a $15 per month pay wall for its most frequent users. The new payment system begins March 28 and will allow users to read 20 articles per month for free. After that, a pay wall will prompt users to select one of three payment plans: $15 for a month of access with a mobile phone app included, $20 for a month of access with an iPad app included or $35 for a month of access to both the iPad and mobile app.
There are several holes in the Times' fee barrier, however: clicking on a link to a Times story from a social network like Facebook or Twitter will not count towards the 20-article limit. Neither will visits from search engines like Google, however, there will be a five-article daily limit.
“A few years ago it was almost an article of faith that people would not pay for the content they accessed via the Web,”, chairman of . "This move is an investment in our future. It will allow us to develop new sources of revenue to support the continuation of our journalistic mission and digital innovation, while maintaining our large and growing audience to support our robust advertising business. And this system is our latest, and best, demonstration of where we believe the future of valued content — be it news, music, games or more — is going.”
The wisdom of erecting a pay wall has been fiercely-debated amongst media observers for years.
Let’s take the $20 price point as an average sales price, figuring both that tablets will drive sales and that smartphone-only and all-access digital subs will balance themselves out. At $20 per month, that’s about $78 million a year in digital circulation revenue — a new line item. Double it and you have $156 million a year.
Let’s put that number in perspective. The New York Times Media group — essentially the Times — took in $683 million in circulation revenue in 2010. So a one-percent digital success rate would yield a 11 percent increase in circulation revenue, if print revenue stays flat (which it won’t). Not bad, but not world-beating. Two percent, or a 22 percent increase on the print base, would be something to shout about — and a great platform for growth. Three percent is an almost magical number: $230 million a year.