Wednesday, January 20, 2010

Light at End of Tunnel for Newspapers

New York Times

The New York Times made an announcement that, years from now, will be seen as the turning point in newspapers' near death experience. The NYT plans to begin charging readers for full access to the newspaper's Web site, beginning in 2011. Back to the future, you say? Didn't the NYT try this before, more than once? Yes, but earlier implementations were fatally flawed by locking out casual readers. The new implementation promises to allow free access to the first few articles for each reader. Heavy users will find access cut off at a certain point unless they become paid subscribers. The doors remain open, so to speak, for window shoppers and samplers, but if you come through the door often enough, you'll be expected to buy something.

After the jump, why this will work.

Why will this work? It's a careful balance designed to entice customers with a low entry price (free), then profit from them as they become hooked on the product. Accidental readers who click on a NYT link from a news search on Google or a citation in another online site's article will still be welcomed for free at NYT. Readers who like what they find and become regular users will be asked to subscribe to the online edition when their usage exceeds a certain threshold. By then, they will see the value in the product and many will be willing to pay for it. Now, if the NYT leverages the growing popularity of e-readers (e.g., Amazon Kindle, Sony Reader, B&N Nook) by easing regular online readers into an e-reader subscription, too, newspapers' migration from print to electronic will be complete.

Expect this experiment to work. Expect other newspapers to follow suit (The Dallas Morning News is sure to be watching this experiment closely). Expect the newspaper industry to survive and emerge at the other end of this ordeal a little thinner maybe, but otherwise familiar, with one big exception: delivery will be to your computer and eventually e-reader, not to your flower bed.

Full disclosure: I do not own an e-reader. I do not subscribe to The Dallas Morning News print edition or eEdition. OK, a show of hands. How many of you even know what the DMN's eEdition is? Didn't think so. DMN is so deep in the ditch it may never climb out. So, don't take my prediction to the bank at least until I come back here and tell you I'm reading The Dallas Morning News on my e-reader. That light at the end of the tunnel I think I see might turn out to be beckoning the newspaper industry to that great newsroom in the sky.

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