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Members, fans and complementary revenue models for the New York Times

The other day, I had coffee with a friend who works for the New York Times. Early in the conversation, I admitted to him that I’ve developed a love/hate relationship with the Times. I love much of the paper’s content (though I share Greenwald’s wish that the Times would call torture “torture”) and find that many of the most interesting stories I read in a week come from the Times. But I am getting really sick of the Times’s efforts to nickle and dime me as a digital subscriber. Despite paying for access to the paper’s excellent content, they somehow make me feel like a piker if I’m not a subscriber to the print edition at nearly a thousand dollars a year.

I can access the Times through MIT, but decided that I read the paper often enough on other devices and outside of MIT’s network that I should become a digital subscriber. For a couple of weeks, I was a satisfied customer, reading far more than my allotment of ten free stories in my browser, and flipping through the paper on my phone when in transit or waiting on lines. But then the Times implemented its new “three articles a day” plan for mobile readers of the paper. My digital subscription – which costs $240 a year – includes a tablet and web version of the newspaper, but getting unlimited access via my phone costs an additional $180 a year.

Because the Times evidently takes its business cues from the widely despised cable TV industry, they like to bundle their content. As a result, the best way to get digital access is to purchase it bundled with the paper edition of the newspaper… which the Times won’t deliver to my rural address. I could also downgrade my bundle from web and iPad to web and phone, but it seems bizarre to me that digital data paid for in one place can’t be used in another.

And so I’ve found myself in the space of Times hacking, looking for ways to get content I want to read for a less exorbitant price than the Times wants to charge. (My current strategies: I am using my web subscription to dump articles to Instapaper, which I then read on my phone. Take that, Big Media!) Here, I join a large cadre of people who proudly post their tips for defrauding the Times so they can continue reading for free.

Let’s compare this situation to another media organization many New York Times readers rely on: public radio. No one writes articles bragging about how they avoided donating to NPR or how they get podcasts for free. In part, that’s because we don’t have to – public radio, for technical and historical reasons associated with the challenge of monetizing broadcast radio, is free by default, supported by voluntary donations. But there’s another reason: people love public radio, want to support it and feel guilty when they don’t.

I don’t intend to argue that the New York Times should become member supported. But I do want to make the case that they would benefit from thinking about the relationship public radio stations and shows have built with their members.

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There’s a diagram that often gets drawn on napkins or whiteboards when media people get together: a Pareto, or long-tail curve, where the Y axis represents how engaged with content your readers are, and the X axis represents your reader population. Near the origin of the graph, the curve is very high – those are the small set of users who are deeply engaged with your content. Farther from the origin, as the curve flattens out, we have the majority of readers, who engage with your content occasionally. For the New York Times, it’s key to turn the folks on the left of the graph into subscribers and to make money from the right of the graph through ads. And as we head towards Peak Ad, it’s increasingly important to move readers across the paywall that separates the left and right side of the graph.

Public radio stations, producers and podcasters face a similar graph. In their case, it’s critical to get the left side of the graph to become members or make donations. But instead of dropping a paywall, they use a combination of gratitude and guilt to persuade their most engaged listeners to support their programming. When they do it well, their listeners feel terrific: Ira Glass urges listeners to defray WBEZ’s bandwidth costs for delivering This American Life online, telling us that if we could give more than $5, we’d pay not only our costs but those of listeners who don’t donate. And if we don’t donate? We feel guilty, but not criminal. The New York Times, which reminds me how many of my three free stories I’ve read on my phone, makes me feel like there’s a security guard trailing me to make sure I don’t stuff an extra New York Times article down my pants.

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I suspect the business folks at the Times are operating under the assumption that there are only two places to be on their subscriber/revenue curve – you can be a subscriber and pay $300-800 a year, or you can be an outsider and cover a tiny fraction of your free riding with ad views. But there’s another option: the Times could start thinking of its readers in terms of subscribers, fans and passers-by. The Times won’t monetize passers-by, except through ads – these are folks who stumble onto the site occasionally and may not even realize they are reading Times content. That’s frustrating, but that’s how the web works. And the Times should certainly cultivate subscribers and encourage more fans to become subscribers. But they might do a better job of that by courting their fans, instead of locking them out.

Fans could be encouraged to support content on the Times not through a threat of locking them out, but by encouraging them to support the paper, and especially, the parts of the paper they value the most. When I donate to WNYC, I always take the opportunity to tell WNYC that I’m not a customer of the station as a whole, but of On The Media, my favorite outlet for smart media criticism. I have to think that some Times readers would love the opportunity to give to the paper and say, “Please don’t give this to Maureen Dowd. I’m giving in the hope of more Ta-Nehisi Coates op-eds.”

A New York Times that courted its fans would help fans track how much content they access from the Times, and perhaps, from other sources as well. It would take a suggestion from Doc Searls’s ideas about tracking usage of public radio and allowing users to donate to stations or programs that they listen to often. It might recognize that fans of the Times are fans of other publications, like The Guardian, the Christian Science Monitor or Planet Money, and band together with some of those other outlets to build a common tracking, membership and recommendations platform. (It would be very interesting for New York Times fans to discover they’re deeply dependent on the site’s content… or that they actually read other sources more than the times.) It could start treating fans who choose to subscribe as members, thanking them for making media accessible to others rather than making it clear that their content is only for those who pay.

Making news accessible for non-readers as well as readers is critical. News organizations have two bottom lines: they need to make enough money to keep the presses running, and they need to have a civic impact, holding the powerful responsible and giving citizens the information they need to participate in a democracy. As ad revenues decline, there’s a tendency for paywalled news sites to provide information only to the small group of people who subscribe to the paper. In the process, it’s possible that newspapers will lose their broader civic impact. If sites could find a way to get support from non-subscribers as fans, they could open their content to a broader audience and have more civic influence.

This would require some serious rethinking for the Times, and it’s quite possible they can support their reporting without making this change in the short term. But if we’re moving to a world where people are less dependent on a single media source, like the Times, and more inclined to pick and choose news from multiple sites, the Times will need to realize that fans can’t pay $300 to each content provider they want to support. Perhaps it’s time for the Times to start embracing and celebrating those fans, instead of alienating them.

11 thoughts on “Members, fans and complementary revenue models for the New York Times”

  1. Surprised one particular tip didn’t show up on the Atlantic comment thread: you’re not subject to the article limit if you arrive via a search engine. So if I’m blocked from reading, say, “C.I.A. Is Said to Pay AT&T for Data on International Calls”, I can Google “CIA is said to pay”, the article comes as the first result, and I click and read.

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  3. Great writing. Particularly fond of the analogy of being followed by a security guard making sure you’re not stuffing extra copies of the paper down your pants. Very much fits in with my recent thinking that content leaders are able to have horrible customer relationships because they feel they *can* — think NYTimes, Facebook, Disqus, ConstantContact, SalesForce…

  4. Couldn’t agree more. Another policy of the NYTimes that bugs me is that the site does not allow me to watch most videos unless I allow them to track me with Brightcove. Even as a print subscriber, I am forced to give up my privacy to watch Times video content. Shame on the Times!

  5. professor,

    this is so interesting to me for a number of reasons. thank you for the post and your thinking behind it. i share your pain with the NYT. the following is TL;DR, i know. i hope that YOU and the NYT will read.

    i graduated from HBS in 1977 along with a very smart man who later became a partner at mckinsey — one of whose first clients was the times. yes, the NYT and different family members saw/suspected danger lurking way back then, so the NYT was even then trying to figure out what to do, at the very least, by the mid-seventies when readership was already diving, product-purchasing (by a different market-segmentation than yours) was declining, and new technologies were looming and beginning their smart, accelerating march across the world.

    this was just about the time that john seely brown’s xerox PARC was synthesizing personal computers from their and others’ work and the metaphorical desktop GUI (a graphic user interface quickly “subsumed” by apple and much later by microsoft). a world of digitalia and edgerati was still only barely imagined, much less imagineered although brown, john hagel, lang davisson, and others (including sir-to-be tim berners-lee, anyone? anyone?) were about to come on-the-consumer, pull-push scene.

    one of the advantages to having been around “analytically” for a long time is that i have seen the times’ (usually lacking, if not awful) product-market programs increase in frequency, as you well describe, but mostly without understanding The Big Shift (hagel, brown, davisson, deloitte center for the edge) in the marketplace that was underway and had been underway at least since 1965.

    this is not the fault of the times although i’m certain that there is a fine and distinguished list of change-resistant perps there, top to bottom, as in any traditional institution, corporation, or other organization. in short, pretty much no one has known how to “fix newspapers” be they the NYT and IHT or my small family hometown newspaper in georgia…until much more recently.

    that said, the NYT has clearly stumbled along. (acquire the boston globe just when primary demand for the industry is noticeably and notably collapsing?; start up a digital continuning education/lifelong learning venture in which the times has no experience or expertise?; build a new, techno-heavy, complex, fixed-asset-mortgaged new nest for the professional family; and etc.?).

    some major problems include talent identification (in a world of news-aversion and journalism-as-entertainment…and/or…-propaganda), acquisition, and development due to high capital intensity, rapidly changing technoloGIES — and, therefore, lack of innovation — in an industrial sector that is disappearing before our eyes, and “bowling alone,” libertarian shifts on public support, and other underlying demographic and institutional changes in their ways of acquiring and distributing knowledge. not to mention understanding the company’s implicit, ethical, social contract with its society — not just readership — although the latter is legally required of only broadcasters and that, not so much anymore.

    the NYT has immense opportunities and dangers available to it today. perhaps, it has decided against some. perhaps, it continues to misunderstand and/or ignore them. i think its key problem is that it continues to think of itself as predominantly a newspaper, as in ted levitt’s brilliant 1960-ism, “marketing myopia.”

    how long before only hedge fund managers, investment bankers, venture capitalists, etc. be able to afford home delivery or price-on-the-street? at $1K/year? apparently not. $2K? $5K? my partner and i are tapped out and high on the logarithmic scale of frequent irritation with the times.

    neither is the NYT NOT out of looming neo-dangers-of-disruption yet, as its continuing pricing policies clearly suggest.

    michael massey
    cambridge, mass., USA

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