New York Times hints at cost, audience size for metered online model

The New York Times continues to be coy about details of the metered model that will debut in the first quarter of 2011 and charge heavy users for unlimited access to its website. It remains to be determined exactly how much monthly access will cost and how many articles per month a user may read for free.

But in a presentation to the annual UBS Global Media Conference this morning, the company dropped some fresh hints about how the pay wall will work and the underlying business strategy behind it.

Martin Nisenholtz, chief of digital operations, said that the company considers about 15 percent of current visitors to to be "heavy users," viewing 20 pages or more a month.

Given that the site draws roughly 40 million monthly uniques, that translates to a potential base of 6 million that can try to convert to paid. That is roughly seven times its daily print circulation of 877,000 and more than four times its Sunday circulation of 1.4 million.

At even a modest conversion rate of 5 percent, that would work out to 300,000 additional paid subscribers. A Kindle subscription to the Times cost $19.99 a month, and Scott Heeken-Canedy, president of The New York Times newspaper, said that might be indicative of where pricing for full Web access will end up. In a single month, that $19.99 for 300,000 subscribers would total about $6 million.

He and Times Co. CEO Janet Robinson both said that the switch to metered is a straightforward strategy to generate a second income stream from the Web, now supported entirely by advertising.

The site's home page, access to stories via links and a limited number of stories per month called up on site will all remain free.  Using Nisenholtz's figures that means the 34 million light users per month can continue their usage as usual (and the Times retains that traffic for advertisers).

But the other 6 million will face the choice of reading less online or paying something, unless they are also print subscribers and granted free access.

Robinson said in her prepared remarks that the Times "will offer cross-platform packages for a seamless user experience," but was not more specific.

I asked Nisenholtz if that meant print subscribers might be asked to pay an additional amount more for full access. He said probably not.

Robinson also said that coming into the site via a search engine or link will not trigger a pay wall notice (as it does in Rupert Murdoch's high-wall model at The Times of London).  But when I questioned Nisenholtz, he said that there may be a monthly limit on articles accessed for free on Google.

The Times print circulation has fallen slightly this year, and after years of aggressive price increases (taking a full-print subscription to $770 annually) it has held back from further increases for more than a year. There have even been reports of subscribers threatening to quit and bargaining down from the full renewal rate to a half-price short-term rate.

No wonder the paid online option, which the Times tried and then abandoned in the mid 2000s, looks freshly attractive.

And a discussion of costs in the presentation gave one more reason the company is leaning hard on digital with paid e-editions and iPad apps. Rising newsprint costs are having a negative impact of $13 million in expense this quarter compared to the same period in 2009, and the company expects newsprint prices to rise another 12 to 13 percent in 2011.


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