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More On Times Online Pay Model: The Memo

nyt logo.jpgAlthough details are scarce about The New York Times‘ decision to launch a metered pay model on its Web site next year, announced this morning, publisher Arthur Sulzberger, Jr. and New York Times Co. CEO Janet L. Robinson sent a memo to staff today explaining the impetus behind their decision.

As suspected, the reason behind the move is the search for an additional revenue stream, which Sulzberger and Robinson said, “will be an important part of our future.” They added:

“While digital advertising will continue to be the major contributor to our success on the Web, we expect that online subscription revenue will improve our ability to grow an important part of this business.”

As for the choice of a metered model versus, say, The Wall Street Journal‘s model requiring payment for full access to exclusive stories, Sulzberger and Robinson said the move will allow the Times to “remain a vibrant part of the search-driven Web, which has proven to be an integral reason for why we have become an industry leader in display advertising.” Who said Google News wasn’t good for something (ahem, Rupert Murdoch)?

Sulzberger and Robinson also addressed concern from critics recently — criticism which has reached a fever pitch since a New York magazine report surfaced over the weekend revealing the paper’s pay model plans a few days in advance. The execs admitted there are challenges ahead, and they are taking it slowly, planning to roll out the pay model a year from now. As they told their staff:

“Ultimately, we recognize that the success of our ideas will be judged by how well we execute this effort in the months to come. That is why we are waiting until 2011 to introduce this new system. To pursue this new approach requires that we utilize the full energy and intellect of all of you. All that work begins today…It will take time to get this right.”

Other things to take away from the memo: while the idea of joining a consortium with other publishers is still on the table, this metered model will be a “stand-alone product.”

In addition to the memo, the paper also published their own story today about their announcement, emphasizing their desire to take it slowly and get their pay model right. Executive editor Bill Keller, has reportedly “embraced the plan,” telling the Times:

“It underscores the value of what we do — trustworthy, aggressively reported professional journalism, which is an increasingly rare and precious thing. And it gives us a second way to sustain that hard, expensive work, in addition to our healthy advertising revenue.”

After the jump, the full memo sent to Times staffers today.

Read more: The Times to Charge for Frequent Access to Its Web SiteNew York Times


Vol. 1 2010: An Important Decision about Our Future

Today we are announcing that we will be introducing a paid model for NYTimes.com at the beginning of 2011. As you will see in the press release, we have chosen a metered approach that will offer users free access to a set number of articles per month and then charge users once they exceed that number.

The metered model implementation is an integral part of our comprehensive plan for enhancing NYTimes.com. In 2010 we will continue initiatives such as Times Open, Times Topics and our work to develop more active communities and more fully integrate the real-time Web. We will continue to develop new online products and offerings as part of our effort to enhance the user experience for our readers and advertisers.

Our strategy is to build the metered model while we remain focused on making NYTimes.com more compelling, interactive and entertaining, providing many more reasons for online audiences to visit our site and stay longer. In the weeks ahead, we will be adding resources to achieve these critically important goals.

Since NYTimes.com is, by a variety of standards, one of the world’s most popular and successful news Web sites, why are we changing our model at all?

We are doing so because we believe that a second revenue stream will be an important part of our future. While digital advertising will continue to be the major contributor to our success on the Web, we expect that online subscription revenue will improve our ability to grow an important part of this business.

Fundamentally, this is an important step in our effort to support The New York Times’s high-quality, professional journalism. Our readers know that The Times brings them the most authoritative news and opinion to be found anywhere. We believe that they are willing to pay for it online, just as they are already paying a significant price for it in print.

We greatly appreciate this loyalty and dedication to what we have to offer. Once the metered model infrastructure is completed, New York Times home delivery print subscribers will continue to have free access to NYTimes.com.

We also selected the metered model because it offers a number of important virtues from a financial and growth perspective. It allows NYTimes.com to remain a vibrant part of the search-driven Web, which has proven to be an integral reason for why we have become an industry leader in display advertising. This flexibility enables us to create a proper ratio between free and paid content and to aggressively build on our very successful digital advertising business.

As you have already seen over the past few days, there are those who think that such an action is critical to our future success and those who see it as a serious mistake. This comes as no surprise. We know from long experience that significant change invariably breeds controversy; that there will be an ongoing public conversation about what we are doing, and we expect that many of the comments will prove to be helpful.

We know these arguments well because our metered model decision is a product of months of vigorous analysis and debate. There was much we wanted to learn and know. We wanted to get a far better sense of NYTimes.com’s potential over the next decade. We also wanted to understand where the Web may be heading and how new technologies will affect customer online usage. We believed that only by carefully pursuing these and other important issues could we arrive at the best possible answer.

Ultimately, we recognize that the success of our ideas will be judged by how well we execute this effort in the months to come. That is why we are waiting until 2011 to introduce this new system. To pursue this new approach requires that we utilize the full energy and intellect of all of you. All that work begins today. As we said earlier, our goal is to create the best possible user experience, integrating many of our customer management systems throughout the Company. It will take time to get this right.

Moving with appropriate care will enhance our ability to embrace an array of promising opportunities that are at our doorstep. As we look ahead, we see a broad range of end-user devices coming to market that will provide even more mobility, connectivity, rich media experiences and a higher degree of application value, and our pricing plans and policies must reflect this vision.

There has also been much speculation in the media and elsewhere about whether The Times will join a consortium as part of the metered model implementation plan. At this stage, our plan is to introduce the metered model as a stand-alone product. At the same time, we continue to discuss alternatives with a broad range of prospective collaborators with regard to bundled offers and other aggregation opportunities.

We will provide additional details about our plan as we get closer to launch.

The creation of a metered model for NYTimes.com is part of a long evolution to expand our presence on the Web and exploit new mobile and social networking vehicles. We are able to take this step today because of the scale and success that we have developed over the past 15 years. NYTimes.com is now widely recognized as the gold standard in online news and information. This decision is a natural next step and we hope that you will be as excited as we are to take on this new opportunity.

To read the press release go to www.nytco.com.

Arthur and Janet

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