Wednesday, September 30, 2015
Traditional newspapers and magazines are in trouble: Declining readership, declining ad revenue, rising costs—it all seems to indicate impending doom. How the various companies respond may determine if they survive, but already some are clearly getting it wrong.
The New York Times (NYT) is a good example: It has been active in pushing readers to subscribe one way or another. In fact, it’s become so intrusive that if I see a link to a NYT story, I now just ignore it. I can’t remember how many free views of their stories they allow in a month, but sometimes I’d swear it’s one.
The NYT has been sending me sales emails for months on end, each promoting a “limited time offer”, then telling me it’s about to expire, and then—miracle!—the offer’s extended. The deadline passes, and the emails start again, week after week after week. And then the cycle starts again.
What the NYT is promoting is in the screenshot above: The lowest rate is access to the NYT website from any device, plus access through the NYT smartphone App for $1.88 a week (after the first 8 weeks). After the first year is up, the rate goes up to $3.75 per week.
The NYT has a separate subscription rate for website and tablet access (the middle-priced option) and the most expensive version covers the website, smartphone and tablet. This is a very weird strategy.
First, their phone and tablet Apps are clearly different, which means different maintenance, which seems an unnecessary cost. Also, some features are apparently only written for the tablet App.
All three options allow subscribers to access up to 100 archived articles per month—why just 100? To be honest, apart from researchers, I can’t imagine anyone wanting to access anywhere near 100 articles per month, let alone more, but the limit seems capricious and arbitrary to me.
My main gripe is with their tiered subscription: It adds value by device, not by content desired. So, someone with a tablet who wants everything pays more than someone accessing mostly the same content on their phone and computer. Or, someone with a smartphone but no tablet is limited in what they can access. This is incredibly dumb. A much better approach would be to have the price go up as the subscriber gains more content. This is a true user-pays model, not one that rations content by technology, so it’s more like a print subscription where a person can decide how many days they want the paper delivered.
Ah, print—the thing that’s dying also shows, it turns out, the biggest problem of all for the NYT’s digital subscriptions: It’s way too expensive.
Daily 7-day delivery of the NYT within New York City is $3.50 per week and includes all digital access and apps for free. The cheapest digital subscription—which is just website and phone—is, after the first year, $3.75 per week. To get the same level of digital access that a print subscriber gets for their $3.50 per week, a digital-only subscriber would have to pay $8.75 per week (after the first year).
Clearly, the New York Times doesn’t want people to move from print to digital, so it charges FAR more for digital access than it does for print subscription in the city. At the very least, digital subscribers are subsidising losses from the print edition.
Of course, a print subscription in most of the USA (let alone overseas) would cost far more than $3.50 per week, so by that measure a digital subscription is a bargain, right? No. In the digital world, place means nothing: Digital content delivery costs the same whether the subscriber is next door or on the other side of the planet.
I’ve run into this before with US magazines charging the same amount for digital subscriptions as print, even though they have zero printing and distribution costs (in one memorable case, a magazine insisted on charging foreigners a higher subscription fee, just as they do with print, just because—they never could give me a reason, and I pushed for one).
There are already an ever-increasing array of digital-only publications available for free, and many of them are quite good. We’ll also see new subscription-based digital-only publications emerging that charge reasonanble amounts for their subscriptions. If old fashioned, old-time publishing companies want to compete, they’re going to have to learn not just that digital is different from print, but also the cost to subscribers must be, too.
The New York Times hasn’t learned that yet, but maybe there’s still time for them. If not, someone else will fill the void. Count on it.