New York Times changing their business model

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The New York Times is considered by many to be the most trusted, reliable and important newspaper in the world. It has one of the largest circulations (3rd largest in the U.S.) and is read by people all around the world. However, the NYT has not been immune to the decline of the newspaper industry and like many newspapers, they have been thinking about how to reverse their downward trend.

Well, starting yesterday in Canada and on March 28 for the rest of the world (not sure why they singled Canada out first), the NYT will be implementing a paid subscription model for their website. I won’t get into too many details about how they priced everything out because it is a lot more complex than you would expect something like this to be. I did read an article on Reuters (click here to read it) that explains it well, in case you want to know exactly how it will work. To cut to the chase though about their pricing model, you will still be able to read a limited amount of articles on the NYT website for free every month, but beyond that I would refer to the article I linked to because, like I said, it is needlessly complicated.

The real question that everybody is asking about this big change to their business model is if it’s a good idea? I think it’s clear that they had to do something since their business was declining. However, I’m not sure this was the best change to make. A lot of people (like me) who write blogs that often reference and link to NYT articles or people that like to share articles on Facebook or Twitter may not be willing to pay for the service. It’s not like the NYT has a monopoly on good reporting by any means. The LA Times is very good, as is Reuters and a long list of other news agencies. On the down side for the NYT, bloggers and people that like to share NYT articles on social networking sites bring in a lot of traffic into the NYT website which generates ad revenue. This traffic will surely decline.

Now it’s a matter of will the new paid subscription money out weigh the reduction in ad revenue? The NYT obviously thinks it will, but we will need to wait about a year or slightly less to really know for sure. However, because they made their pricing model so complex, some people may be turned off by the whole thing and may just move on from the New York Times website. If it were my newspaper and I wanted to implement a paid subscription, I certainly would make it simple to understand. This may haunt them down the road.