Partial paywall will be built this year for 2011 launch
The New York Times says it will charge readers for full access to its Web site starting in 2011, a risky move aimed at drawing more revenue online without driving away advertisers that want the biggest possible audience.
The potential pitfalls have made most other major newspapers hesitant to take a similar step. But after months of deliberation, the Times said Wednesday it will use a metered system, allowing free access to a certain number of articles and then charging users for additional content.
Shares in The New York Times Co. fell 4 percent in afternoon trading.
The Times did not disclose how many articles will be available for free or what it will charge to read more. Subscribers to the printed version of the Times would still have free access to the Web site.
It would not be the first time the newspaper has asked readers to pay for its online articles.
It charged for its Web site in 1996 but attracted only about 4,000 subscribers. Another experiment called Times Select, which required a $50 annual subscription to read Times columnists, drew 221,000 customers but was scrapped in 2007 because it dented ad sales. Advertisers generally pay more for higher Web traffic.
The goal of a metered system is to draw casual readers with free articles while getting fees from people who want to go deeper on the site.
The plan would not stop search engines from cataloging the newspaper’s Web site, so its articles could still benefit from the traffic generated by search results.
The Times said it will use 2010 to build a new online infrastructure for charging readers on different platforms, not just personal computers. For instance, the newspaper can be read for free through an application on Apple’s iPhone. But the Times did not specify its plans for mobile editions.
In a statement, New York Times Co. CEO Janet Robinson said the company is “guided by the fact that our news and information are being featured in an increasingly broad range of end-user devices and services, and our pricing plans and policies must reflect this vision.”
The push for subscription revenue is happening because online advertising hasn’t grown enough to offset declines in print ads. The recession brought on a painful slump in ad spending as publishers were already facing new competition on the Web.
Overall advertising revenue fell nearly 30 percent in the first nine months of 2009 for the Times Co.’s business unit that includes the Times, the International Herald Tribune and their Web sites. The company reports fourth-quarter results Feb. 10.
One of the Times’ biggest rivals, The Wall Street Journal, already charges for access to its site. Rupert Murdoch, chairman of the Journal’s owner, News Corp., has vowed to impose a similar system at the company’s other titles, which include The Times of London and the New York Post.
The New York Times is contemplating a different approach than the Journal, however. On the Journal’s Web site, some articles are free to anyone, and some require a subscription.
The Times’ site would function more like the one run by The Financial Times. The London-based newspaper allows anyone to view one free article per month, and people who register on the site can get 10 free articles per month. Subscribers who pay $186 a year get access to most material on the site. A premium subscription for $299 comes with extra material. Or for $397 a year, FT subscribers can get the printed newspaper and read the Web site.
Rob Grimshaw, the managing director of FT.com, said the site has struck a successful balance between ad revenue and subscription fees. He said the newspaper has roughly 121,000 people who subscribe exclusively to its digital edition, up 22 percent from a year ago. By comparison, the print edition has about 400,000 subscribers.
And though he did not disclose specific figures on ad revenue, he said the newspaper makes up for the loss of advertising volume by charging each advertiser more. It can get this premium, he said, because FT.com knows more than other online destinations about its users and their interests.