NY Times risks losing readers with new pay model

By @ibtimes on

The New York Times will start charging for full access to its articles on phones, tablet computers and the Web, in a bold plan that risks alienating readers of its popular news website.

Readers who do not subscribe to New York Times Co's namesake newspaper will still able to read 20 articles per month on the website for free, but will have to pay to read more.

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 will 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.

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

The Times' strategy is similar to that of Pearson Plc's 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 experiment with the Times of London. The British paper bars anyone who does not pay from reading its website, an action that 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 approached 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 diversify its revenue stream.

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

The New York Times said it will 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 to five a day.

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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