Charging for NYTimes.com is not innovation

So the New York Times website finally caved – it announced that it’s putting up a paywall.

The industry’s been waiting for months to see how the Times intended to begin the march toward monetizing online content. Other papers have been hoping that they’ll be able to follow its lead. Sad to say, they won’t be able to, and the Times experiment will likely fail, in large part because it fails to achieve the one thing the industry desperately needs: to attract younger readers.

At a moment in history when circulation figures are in free-fall and the only reliable readers of newspapers are ending their subscriptions because of dementia or death, the Times has made the supposedly informed decision to put a paywall around...its columnists. Basically, its bloggers.

The paper will charge for a form of content that every living, breathing, e-commerce-capable reader under the age of 40 knows in his or her DNA should be, is, and will be, forever free to readers. Ad-supported.

Second, the paper announced that archives will be part of the “Select” package (a per-article charge has always been in effect for any items older than one week) – virtually ensuring that the Times will be quoted far less in university papers by students than other sources.

(If students do access the Times archives – a legitimate research product for which the paper should charge – they’ll do it through Lexis/Nexus subscriptions their universities carry. So zero new Select subscriptions here among younger readers.)

On the Web, students will simply use Wikipedia, or another free source...Google comes to mind as a decent research-database front end.

And, lastly, Select will be free to those with print subs – again, not young readers, but all those older readers who use computers the least of any age group.

Beyond missing the opportunity to lure younger readers, the Times appears to have missed the mark in two other significant ways.

First, the paper has now anointed some bloggers - oh, sorry, “columnists” – as stars, while others will languish in the “free” content universe...until the business side or the editors decide to bring them onto the paying island.

“Survivor: Newsroom” is born. Now that would be a series I’d pay to watch. Let’s get a webcam in the Times newsroom today.

I’m sorry, but won’t those who become columnist “winners” go on to star in their own shows? Since the Times has helped them learn that money should be their true measure, the paper shouldn’t be too chagrined when those star bloggers strike off on their own (why share the advertising bananas with the paper?) or other papers lure them away with cash and prizes. The Times’ “quality” will no longer keep them on the island. They’ll swim off. (Or become irrelevant, as the bulk of their audience remains locked on the other side of the paywall.)

If the Times’ editors truly believed in this model, they would put their own editorials behind the paywall as well. Somehow, I doubt they will.

I was Editor in Chief at Netscape and, with other folks, tried to get the company to embrace its users as an audience rather than just an installed base. But like Microsoft, Netscape wanted to remain a software company. In the end, it didn’t really understand the advice of Jim Barksdale, its own CEO, to “find a parade and get in front of it.” If it had, Netscape would have been the company to buy Time Warner.

The Times is planning to treat its readers as an installed base that MUST pay for something rather than an audience that WANTS to pay for something.

Although Netscape ultimately failed, they started an important marketing trend: Put out a networked product and figure out how to make money on it afterward. Even smarter people at Yahoo! and Google have done even better. And now smart folks at the BBC have launched BBC Backstage – an innovative way to syndicate BBC content that actually takes into account the fact that the content is online. Interactive. Digital.

Aside from higher CPMs from increased audience, Backstage will most likely lead to new news products that the BBC could actually charge good cash money for. And the basis? Innovation, not forced-march subscription.

The BBC treats its readers as an audience and blends in the best of what an installed base can expect in software capabilities. The BBC gets it.

The Times is going to treat its readers as an installed base with the worst of what an audience can expect.

(So we get this out of the way: The WSJ is specialty content, has an older and wealthier readership, never had to worry about younger readers, and charged from inception.)

And second, the Times thinks it’s got in front of a parade – probably read the log files and were seduced by the big numbers of people who like to read their (very talented) columnists. But rather than lead the parade, the Times prefers to shut it down. Readership of the columnists will plummet; those who won’t pay will go on to other parades or go home.

The Times marketing folks have failed here. They’re responsible for product, price, placement, promotion, and place. And the best they could come up with was...”Let’s charge ‘em for the columns!”

If they truly valued their audience, they would know and understand that a parade is not just a large crowd to be fleeced – parade-goers and marchers have a shared purpose and destination. In this case, the audience in question will want to read Friedman or Rich or Krugman. Rather than celebrate that, and lead them with new, enticing services, the Times is going to leave readers to hunt down copies of the best columns as they shoot around the Internet. For free. Think they won’t find them?

(How much will the Times budget for “compliance officers”? Or maybe they’ll just contract with the RIAA.)

The parade for online news isn’t about putting a cover price on an issue or a section of a paper. It’s about innovation. The Times has confused the two; rather than lead, the paper will force readers to go where it wants - to the paywall. But people have a way of going around, climbing over, writing graffiti on, and knocking down walls.

Imposing user behavior is never the right choice and never pays off. See, for example, these recent lesson-learners: The LA Times opening back up its calendar for no charge, and CNN for dropping the fee for its coveted video footage.

A better move would be for the Times to truly go for the long game, work harder to find gems in those log files - services and features that readers are responding to not just in sheer number but in enthusiasm and online activity. Or in discovering how to increase their audience numbers and time spent with Times content, as the BBC has.