Left Bay’s Musings on the Media

Searching for answers in sales and marketing

Archive for January, 2010

Metering the NY Times

How many users will pay for the online version of the New York Times?

Last week, the Times announced that they were implementing a metered system whereby they would start charging their high-volume users a flat fee to continue reading their articles. At what point that fee kicks in is still to be determined. In fact, how the entire system works is still very much up in the air, as the Times gave themselves until sometime in 2011 for implementation. But a question that I wonder — just how many users will pay for content?

And it turns out that I’m not alone in trying to figure it out. Frédéric Filloux of Monday Note crunched the numbers and produced a chart that shows that even a 5% subscription rate, priced at $2 to $8 month, would boost the Time’s online revenue by 7% to 29%.

But is a 5% subscription rate likely? Yes, apparently, as that’s about the percentage that the Wall Street Journal is getting, according to analyst Ken Doctor of Content Bridges:

“Isn’t it suicide to charge your best digital customers for content, while allowing others to get some for free? Not really. In fact, that’s what the Wall Street Journal has been doing for years. Remember the numbers: about a million paying online subscribers…..and another 19 million uniques, who get to Journal content through search engines and all manner of side doors for free.”

The Times isn’t saying what percentage of its readers fall into the category of “frequent readers,” the folks who will get hit by the meter. But pulling from the Pointer Online blog of Bill Mitchell, who takes from the Times David Carr, the number looks like 2 million out of 17 million uniques, which would be an ambitious 11%

So, maybe 5% – 10%?

That leaves plenty of room for a crowd-funded platform like Kachingle whereby users would voluntarily pay for content they’re otherwise getting for free. Would users do so? Look at public broadcasting. If the appeal is done right, if it appears others are giving, then yes, people will pay for free. Our models for Kachingle are based on a 1% – 2% adoption rate in year 1, jumping to 3%-4% in year 2, and then growing by 1% annually until it tops off at 6% – 8%.

You can mix free and paid. It can work.