News Groups Wrestle With Online Fees
To charge or not to charge, that is the question still bedeviling the news industry nearly a decade after it decided to give away news on the Web for free.
The debate got fresh fodder last week when the New York Times announced that come September, it will charge $50 a year for Web access to its op-ed columnists and news archives. A week earlier, the Los Angeles Times moved in the reverse direction, removing the $60 annual fee it had been charging for its online entertainment guide to Los Angeles.
The free-vs.-pay debate is assuming heightened urgency -- and generating a fair amount of flip-flopping these days -- because Internet readership and advertising are booming at a time when newspaper circulation is declining at accelerated rates. Newspapers are struggling to figure out how to make money from their growing Internet audience without cannibalizing their print editions.
The Los Angeles Times declined to say how many Web subscriptions it had sold, but apparently it wasn't enough to offset the advertising it sacrificed when it started charging for CalendarLive, a Web entertainment guide, in August 2003. By making the information free again, the paper said it expects to attract many more Web readers. "A subscription offering on the Web is a barrier to the fastest and widest growth in our markets," declared Robertson Barrett, general manager of the Los Angeles Times Interactive.
Both papers offered print subscribers free access to their premium Web content, suggesting that their Web fees were defensive moves to prevent paper subscribers from defecting to free Internet sites. The New York Times, however, said the goal of its TimesSelect subscription is diversifying Web revenue beyond advertising so it can cushion against ad downturns.
"There comes a point at which you have to say, 'Where is the value equation?' when you are talking about online media," said Martin Nisenholtz, president of New York Times Digital.
The New York Times is adopting a hybrid model in which most of its news will remain free online, but non-print subscribers will have to pay to read its eight op-ed columnists and 14 other columnists on the Web. If that seems an inflated price for opinions, the paper is shrewdly bundling other material into TimesSelect, including access to its archives, customized e-mail news alerts, new audio and video packages, and a new Web tool for organizing and saving Times stories.
"For the cost of roughly two and a half martinis, you can have access to the entire archives," Nisenholtz quipped. He took issue with bloggers who predicted the subscription plan will reduce the readership and influence of the paper's columnists. "We expect quite a number of people will subscribe," he said.
But since the New York Times has more online readers than print subscribers, it's hard to believe the columnists won't see a dramatic fall-off in readership even if its subscription plan catches on.
The painful transition facing the newspaper industry was on display here this week at the Wall Street Journal's "D: All Things Digital" conference. In a panel discussion, top executives from three newspaper companies -- Knight-Ridder Inc., The Washington Post Co. and Dow Jones & Co. -- expressed optimism about what they called the "challenges" facing their industry. Since most large papers have gained more Web readers than they have lost in print, the panelists said the industry has a chance to reinvent itself.
"If we're in trouble, shame on us," said Donald Graham, chairman and chief executive of The Washington Post, noting that total readership of Post journalism has more than doubled in the past seven years if online readers and those reading the company's free Express paper are counted.