New York Times will charge for news on website
NEW YORK (Reuters) - The New York Times will make people pay for articles online starting next year, marking a big move by a prominent newspaper to find ways to survive on the Web as print subscriptions and advertising sales fall.
The New York Times Co said on Wednesday that it would use a "metered model," charging readers for access after they read a certain number of articles in a month.
People who get the paper delivered at home would get free access to the website.
"This process of rethinking our business model has also been driven by our desire to achieve additional revenue diversity that will make us less susceptible to the inevitable economic cycles," Chief Executive Janet Robinson said in a statement.
The move strikes at the heart of a debate within the publishing business -- whether to continue giving away valuable news and features on the Web, or start charging at the risk of losing readers.
The New York Times, which has experimented with charging for Web content, provided little detail on its latest plan. But on the face of it, the proposed model appears similar to what the Financial Times does on its website.
"It's a big deal for the industry because the question that's been out there for a year or more is whether the general news, the mass news publishers would go in a paid-content direction," said Rob Grimshaw, the FT.com's managing director. "A major player breaking cover on something like this is a bit step."
The debate over whether newspapers should make people pay for Web news has bubbled for a decade or more. It grew more urgent in the past two years as ad revenue declines sharpened.
The recession and the collapse of the housing market lent an intensity to the debate as U.S. newspaper publisher stocks tanked, thousands of journalists were furloughed or laid off and newspaper bankruptcies and closings increased.
The New York Times has faced its own problems in this respect, and has bought out and laid off some of its journalists to cut newsroom costs. Last year, it threatened to close The Boston Globe unless it extracted millions of dollars in concessions from its unions.
The major question is whether attempts to charge drive away online readers used to getting the news for free. Websites attract advertisers by showing that they have large numbers of visitors. Any move to stop the spigot of free news, or to limit access to it, could drive away large numbers of visitors.
"The obvious downside risk that they very likely lose half their current readership, meaning ad revenue will go down by half as well," said Forrester Research analyst James McQuivey.
The New York Times would consider the launch a success if they have 250,000 paid Web subscribers by the end of its first year, McQuivey said.
Today, the New York Times site has around 20 million unique visitors a month, according to Nielsen Research.
Only a few U.S. newspapers, including News Corp's Wall Street Journal, charge for access to articles on its website. WSJ.com has more than 1 million paid users.
New York Times previously charged for some Web content in a program called TimesSelect, which walled off some of its offerings, including commentary by well known columnists such as Maureen Dowd and Thomas Friedman.
It ended TimesSelect in 2007 after two years, saying it did not attract as many users and as much revenue that it wanted.
Online ad revenue has failed to make up for the print revenue declines of most traditional news organizations like newspapers and magazines.
"Most news organizations are really optimized to be subsidized by print advertising that's fallen out of the market," said Forrester's McQuivey.
(Reporting by Yinka Adegoke. Editing by Gerald E. McCormick and Robert MacMillan)
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