Daily Dose of iQ: Pay More for Better Experience?

May 05, 2011 — Allan Pulga

Print media's woes are now online ones. If the New York Times website, the most popular online newspaper site in the U.S. (with 30 million unique visitors per month), has to adapt its business model for online and mobile delivery, it tells you something about the state of print and online media in general.

How is their online delivery model changing?

On March 28, the NY Times introduced pay walls in order to "develop new sources of revenue to strengthen our ability to continue our journalistic mission as well as undertake digital innovations that will enable us to provide you with high-quality journalism on whatever device you choose."

Translation: Advertising money on our website isn't cutting it. We need you to pay a little bit more to keep funding our awesome content.

Here's how it works: (Source: NYTimes.com)

  • Current visitors are allowed access to only 20 articles per month.
  • Unlimited access to NYTimes.com + smartphone app is on promo for $1.88/week for 26 weeks
  • Unlimited access to NYTimes.com + tablet app: $2.50/week for 26 weeks
  • Unlimited "All Digital Access" (NYTimes.com + tablet app + smartphone app): $4.38/week for 26 weeks

Oliver Reichenstein of InformationArchitects.jp argued (May 4) that pay walls aren't about making profits, they're about sustaining the attention machine. About a recent conversation he had with an big, unnamed publisher, he wrote: "The main currency of news sites is attention and not dollars and that I believe that it is his job, as a publisher, to turn that attention into money to keep the attention machine running."

Reading premium news = Flying Business Class

The unnamed publisher concurred and made a fascinating analogy: "Why do people fly Business Class? In the end, an airplane brings me to the same place regardless of whether I fly Economy or Business Class and the massive price-increase I pay doesn’t compare the difference in value."

Look at the above photo. It compares what NYTimes.com looks like with the ads in (left), versus what it looks like without the ads (right). Reichenstein says even with all the ads, online news isn't making enough money.

By introducing pay walls, the NY Times is taking a risk: It's not about Economy or Business Class, because under the pay-wall model, only Business Class gets to the destination (i.e. the content).

It remains to be seen if pay walls will work for the NY Times. Personally, I haven't yet paid for unlimited access. I choose the articles I click through to and so far I haven't exceeded my monthly allotment of 20 articles. Once I hit my limit, I'll have to decide if paying $1.88 a week for unlimited access is worth it.

But I certainly wouldn't pay more to have a "better customer experience": without ads, like on the right of the photo. I suppose that's why I don't fly Business Class.

How about you?

Beyond paying for unlimited access, would you pay for a better customer experience and fly Business Class for online news? (Post your responses below.)

Topics: Mobile Industry, Customer Experience

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