UPDATE 6-NY Times risks losing readers with new pay model

Thu Mar 17, 2011 6:02pm EDT

* New York Times rolls out pay model in Canada

* Will start charging U.S. and worldwide readers March 28

* Print subscribers will have free access to website

* Will begin to use Apple subscription service June 30 (Adds analysts' estimate)

By Jennifer Saba

NEW YORK, March 17 (Reuters) - The New York Times will start charging for full access to its articles on phones, tablet computers and the Internet, in a bold plan that risks alienating readers of its popular news website.

Readers who do not subscribe to New York Times Co's (NYT.N) namesake newspaper will be able to read 20 articles per month on the website for free, but will have to pay to read more, the company said on Thursday.

Subscribers to the print edition will have full, free access to the website, NYTimes.com.

The newspaper launched the pay model in Canada on Thursday and plans to roll it out in the United States and globally on March 28.

The pay model is a big test for large-circulation general interest newspapers, which have struggled to retain readers and advertisers as more and more people get their news from the Internet. [ID:nN1349719]

(For a Breakingviews column on the New York Times' plan, click on [ID:nN17193539].)

The scheme is being closely monitored by other news organizations weighing similar plans.

The Times' strategy is similar to that of Pearson Plc's (PSON.L) Financial Times, which has had some success charging high-end business readers for online access.

The Wall Street Journal, once a newspaper targeted to financial professionals, also is on the forefront of charging for online news, even as it has broadened out to become more of a general newspaper under News Corp's Rupert Murdoch. The Journal is now the largest U.S. newspaper.

The Times' new pay model allows casual readers to access the New York Times, unlike some other pay strategies such as News Corp's (NWSA.O) experiment with the Times of London. The British paper bars anyone who does not pay from reading its website, which has resulted in a 90 percent plunge in visitors.

About 31.4 million individuals visited NYTimes.com in February, according to online research measurement firm comScore.

"We need to make sure that part of our business continues to grow," said Martin Nisenholtz, senior vice president of digital operations at the company. "The way we think we can do that is taking this metered approach charging the folks who are drinking deeply."

This is the second attempt by the New York Times, one of the world's most prestigious papers, to charge for digital news in hopes of diversifying its revenue stream.

It will charge $15 per month, or 4 weeks, for unlimited access to NYTimes.com and a smartphone application; $20 per month for online access and an Apple Inc (AAPL.O) iPad app; and $35 per month for online, smartphone and an iPad app.

The New York Times said it would begin using Apple's new subscription service in its app store by June 30.

Readers who come to Times articles from other sources such as blogs and social media sites including Facebook will be able to access content even if they hit the limit. However, the Times is limiting the amount of free articles on Google (GOOG.O) to five a day.

UBS analyst John Janedis maintained a "sell" rating on the stock but said in a note to investors that the pay model could be a long term "game changer".

"Today marks a significant transition for The Times, an important day in our 159-year history of evolution and reinvention," New York Times Chairman and Publisher Arthur Sulzberger Jr. said in a statement.

The newspaper attempted to make readers pay in 2005, charging non-print subscribers for online access to columnists such as Frank Rich and Maureen Dowd, but dropped the plan in two years.

It remains to be seen whether people will pay for digital news. Of the three dozen newspapers that have moved to some sort of online pay model, only 1 percent of readers have opted to pay, according to a recent study by the Pew Research Center's Project for Excellence in Journalism.

New York Times Co shares rose 0.3 percent to close at $8.89 on the New York Stock Exchange. (Editing by Lisa Von Ahn, Gerald E. McCormick, John Wallace and Richard Chang)

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Comments (20)
Limey wrote:
For many years I used to have the New Times delivered on a Sunday until I realized I was getting more advertising than real news and it seemed to get worse and worse until I had enough and canceled my subscription.Why waste my money on ads I don’t want to see.
I now read the New York Times on line but once I have to pay for it I will choose to go to other sites to get my news.Once a person buys into a subscription for the Times then they’ll eventually end up in the same situation as I did with the actual paper version.The news media these days is all about the huge amounts of money it can earn from advertising and cares less and less about the quality of the reporting or depth of coverage.

Mar 17, 2011 6:28pm EDT  --  Report as abuse
sjyd wrote:
How can you write an article about NY Times subscriptions and not include pricing?

Mar 17, 2011 6:31pm EDT  --  Report as abuse
reubenr wrote:
I like the Times but not at any price. $15 per month for the basic is $180 a year. These are tight times (this is a pun notice for the pun impaired). I’ve read the NY Times for over 50 years. People say it’s elitist now. I don’t feel that way. They have a point of view that’s a lot more concervative than most people would think but they do strive to be honest and accurate, though they are not, always. The “news” has sunken. Is that a word? They should be paying me! Well, maybe not! I guess, I’ll just take it out of the garbage. Wll, maybe not. I’ll just be illiterate. OK.

Mar 17, 2011 6:49pm EDT  --  Report as abuse
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