New York Times' Print and Digital Units Reportedly Disagreeing Over iPad Content Pricing

[jotto4]

As a longtime Mac user/fan/stockholder AND a former manager at 2 market leading newspapers, I cannot keep silent on this topic.

The newspaper industry is dying. Period. They haven't figured out how to significantly monetize the Internet in over 10 years. They have sat back and reaped the rewards of annual rate increases alongside declining circulation for years, burying their heads in the sand. The ROI of an advertising dollar with print has finally lost to the web.

Look at the number of newspaper that get $ from subcriptions to their online product. You can count them on fingers and toes and still keep your shoes on. No single newspaper group has figured out how to get people to pay for their product online.

Along comes Apple with this new media product (again). Circa 2001, Apple revolutionized another dying industry (music). Those dinosaurs also sat back on old business models and principles, making tons of $ in the process. They didn't see Apple as a threat and agreed across the board on a deal that has continued to make them mad cash, maybe a little less...but more than they were getting when napster ran rampant. Since Apple's iTunes and iPod hit the scene, and their music catelogue expanded, I personally haven't downloaded free music. That is a coup for the industry, and I'm not alone. Online music piracy has fallen. BTW, music has ALWAYS been "shared". Tapes, records, CDs...I've found some of my favorite bands through this "peer sharing"...and paid online for their albums.

So, newspapers are not going to get caught with their pants down after seeing how the Apple/Music industry dance went. Soooo short sighted.

70% of something is better than 100% of nothing. Very simple math. THE NEWSPAPER INDUSTRY CANT GET PEOPLE TO PAY FOR CONTENT ON ITS OWN. Haven't done it yet, can't do it now.

A centralized distributor will get it. The iTunes store is that. It's ubiquitous nature will facilitate the deal. Period. Individual newspapers or their paren companies will NOT get it.

So, Newspaper Industry, take the 70% while it's hot an people may actually pay for it. I put up with crappy mobile service to use my iPhone (which I'm typing this post on BTW)

And the whining about not getting subcriber info...don't play it off like you use that to make your product better. I trained my staff to sell ADVERTISING based on demographic data for sections of the newspaper. In the end, it's about THE MONEY. Newspapers are afraid they will loose that info as a sale tool first, a content influencer second. Get creative. Use online surveys or something to gleen info from your subscriber base.

With the rest industry balking at this current deal, I would put money on the success of the paper that shuts down it's presses in April and goes digital subcriptions only. Hell, they should SELL IPADS to their subcriber base, get a cut of the sale (10-30%) and discount their content for the first year. THAT would be a truly revolutionary move in the industry. Would be a first in a long time. Fact is, THE MAJORITY OF NEWSPAPERS LOOSE MONEY ON SUBSCRIPTION SALES. They are posturing an negotiating from a position of weakness and will loose long term.

It's over newspapers. Your strongest subscriber base is dying off and those still alive think a device that holds their books, magazines, newspapers and photos of their grandkids is pretty damn cool.

Don't get me started on the environmentally UNFRIENDLY nature of the newspaper industry too... Apple's, no, scratch that, the NEWSPAPER's new slogan should be..."SAVE A TREE, buy an iPad and subcribe".

Typed on my iPhone

 

[hugodrax]

If Apple really wants to be taken seriously in the world of academia, they are going to have to implement multi-tasking. Pages, Keynote, and iBooks need to run simultaneously.

At that point why not get a laptop. The screen in the iPad and probably ram is too small to handle 30 windows on the screen. where do you plug in the mouse and keyboard?

 

[MikhailT]

You're out of your mind man. News on the internet will ALWAYS be free. Sure there will be sites that attempt to charge, but the internet is a huge place, you will always be able to find your news for free somewhere on it.

But you can't verify the information. How can you tell which news is fact-checked and confirmed three or four times?

There's a difference between reading about Bush's wiretapping program from NYT than reading about that from some blog site or from some tabloid news site.

 

[redkamel]

"Free news"

News WILL always be free now. Because people can write on the internet for essentially free, and make money by advertising. Google and AOL make money be traffic, not by selling news. So do websites

Why should I pay for news? For journalists? the ones we have now are mostly hacks, none of them cover stories or give real op-eds anymore. I get better, more perceptive news by reading several blogs by people actually IN the finance industry, political activists, or gadget people then I ever will from a newspaper aimed at the average joe written by a journalist. In the past, this may have been false. But now it is true.


And where do free sources get their news, you say? Why, the same place everyone else does. Reality. Anything really important is publicly announced, released or available. Or seen on TV. Local news will always exist, and I will pay for that. Interest stuff too (like National Geographic). But when it comes to public discourse and events, the facts are usually public. Its putting all of it together to make a story thats interesting. And these news companies ain't doing it. No one wants to read them. So why pay them?

WSJ is ok. The Economist is worth it. But CNN is all fluff. So is ABC I can't remember a link or reference to a NYT story in six months. Wired is old; theres better writing on Gizmodo and Engadget. Huffpo, Newsweek...all conventional wisdom, with rare exclusives.

If you want to say these journo's are doing "investigative journalism" please tell me one scandal/big story broken by a print journalist in the last few years. I am sure they exist, but I sure as hell don't remember any. Its all handfed news to them.

EDIT: ok I eat my words; the NYT wiretap program. But NYT times didn't "find" squat. There was a whistleblower. Who could have gone to ANY reputable source.

 

[batchtaster]

Funniest MR entry for the week.

"LOL" is overused as a substitute for "I have nothing worthwhile to contribute", but I literally did laugh out loud. If these guys can't get their own ducks in a row, it says something about their ability to demand things from Apple with any authority in regards to how iPad (and related) content should be provided. That is, they're upset about Apple taking 30% and not providing subscriber statistics, and yet they can't even agree within their own company as to how to proceed.

I predict history will bear this out in Apple's favor, just as it did for iTunes. Record companies were brought kicking and screaming into the 21st century, and now it's hard to imagine it any other way.

Why should I pay for news?

Bear in mind that there is a difference between news and blogs. Between journalism and blogging. Yes, anyone can do it and provide it for free, but they also do not operate under the same qualifications, ethics or other structures as actual journalists. Remember the stock dips due to Engadget's rumors.

Which is not to say that blogs are what you were necessarily talking about, because if a reputable news/journalism company can create a business model powered entirely by online advertising and offer it's content for free, yeah, I'm probably going to choose it over a subscription.

 

[RazHyena]

At that point why not get a laptop. The screen in the iPad and probably ram is too small to handle 30 windows on the screen. where do you plug in the mouse and keyboard?

Because the iPad is supposed to be revolutionary, and not to mention "magical" as well.

When nobody can get paid to produce news anymore, who do you think is going to do it? Crazies with an axe to grind, that's who.

Have fun in your dystopia where your "free news" consists of your neighbor raving about the CIA on a blog, and mouthpieces on each political front funded by benefactors who like throwing money away.

That's great, but the main complaint here is about an industry so out of touch with reality that they want to charge ridiculous prices for their "content." Overcharging for digital print will ALSO cause publishers to not get paid. Have you ever thought about THAT? No one's stopping you from being gouged, however. Buy yourself a bloated subscription.

Dear NYT: Give my regards to the RIAA!

+1

 

[Neutral Gamer]

You Have to Pay for Quality

As someone who buys internet advertising for a living....

I couldn't agree with you more marksman! I understand people using ad blockers for websites with annoying ads or with too many of them. But after testing out AdBlock the other day I was amazed that more or less everything, even innocuous, text only Adsense ads, were completely blocked (using the default subscriptions such as EasyList).

Many smaller websites such as blogs will struggle to pay server and bandwidth costs as the adoption of catch-all adblocking software continues. I think it's quite simple: if a website annoys you with its ads then simply DON'T visit it again. If you like a website's content (e.g. MacRumors) then disable your adblocker to help them get impressions and on the off chance you may find an interesting advert to click.

Unfortunately there's so many zealots out there who seem to think the internet should go back to non-commercial traffic. That capitalism is evil and that everything should be free online (music, movies, games) ignoring the TOTAL costs of production and always fixated on "marginal costs". Sadly the internet's future looks bleak as more and websites, in order to bypass the adblockers, will end up having to use adverts that become part of the article, e.g. brand placements. Actually resulting in a more annoying advertising experience and the loss of journalistic integrity! And these same people will be the first to complain! Ha.

I was framing this the same way as you. Ten bucks a monthly seems fair. And it's pretty unrealistic to think newspapers could continue delivering content for free.

I think this issue was addressed rather well in the fifth season of THE WIRE.

Agreed. If you keep lowering prices to zero then you'll have to compensate somehow by decreasing the size of your workforce and lowering wages resulting in the attraction of lower quality workers. Both will directly affect the quality of the product you're creating and you'll end up going for the least skillfull publishing options, e.g. flamebait and "hit-whore" articles from certain websites that we see today. Rather than intelligent, investigative and insightful journalism.

And The Wire was an excellent series!

 

[macshill2]

Zachery Kouwe RESIGNED: New York Times Plagiarist OUT

http://www.huffingtonpost.com/2010/02/16/zachery-kouwe-suspended-n_n_464677.html

Apple will sell their souls to the DEVIL to make a quick buck. lol Speaks volumes fro your precious company.

To rub the salts in the wound all the more deeper, $30 for the MaxiPad with NO FLASH. hahahaha All because selfish, petty Steve Jobs won't play ball w/ 75% of the Internet that uses (Adobe) flash. "Don't use that proprietary when you can use a different form of it... from Apple! Then it's fair to the world."

 

[louis Fashion]

I get the NY Times on Kindle

It is not $30 it is not $20 it is not $18! NYT and AAPL cannot charge more that twice for an e-paper when they have set the price at Amazon.

 

[jerome65]

I currently pay $21/month for a delivered version of the LA Times. I am sure that the NYT is more than this - probably close to $30/month. I have no problem paying for my LA Times subscription in print, why would I object to paying a similar fee to receive it delivered digitally?

Something that most people may not realize is that at the current prices newspapers are not making a lot of money, and a lot of them are loosing money when you take into account that advertising is down. Everyone keeps saying that the market will decide, but what if the market "Decides" on a price that is below the operating cost, then we will just be left with blogs and TV news.

I personally agree that $30/month is too much, but at .50/day comes out to $15/month and that sounds a bit more reasonable for a news source that has real journalism instead opinion and sound bites.

The thing that is going to be hard to predict here is how much ad revenue will they be able to support in the new format? If they can get a lot of ad revenue coming in then they can charge less, if they have to go with 50% of the typical ad revenue then that kills most if not all the savings they gain from eliminating print and distribution.

 

[Robin4]

The genie is out of the bottle now. If for the past few years we have been able to get our news for free, be it from newspaper websites or political sites; i.e. Politico, Huffington Post, etc. it is almost impossible to ask us to pay $20-$30/mo.

The only portion I am willing to pay is the Opinions page. Yes, once in a while I buy the NY Times and read it from front to last page, love doing it too. The thought of a monthly payment is a downer that I can't get past. I may have reached my saturation point - cable bill, phone bill, internet bill, etc., etc.

My plan if the fees are too high - Local library, trusted local bloggers, political sites, whatever web newspaper I find. If I am desperate enough - BBC, LeFigaro, La Nacion.

Wouldn't the NYT come out winning with a small charge but a huge quantity of readers? I mean world wide, large and small towns everywhere?

 

[Jason Lee]

I couldn't agree with you more marksman! I understand people using ad blockers for websites with annoying ads or with too many of them. But after testing out AdBlock the other day I was amazed that more or less everything, even innocuous, text only Adsense ads, were completely blocked (using the default subscriptions such as EasyList).

Many smaller websites such as blogs will struggle to pay server and bandwidth costs as the adoption of catch-all adblocking software continues. I think it's quite simple: if a website annoys you with its ads then simply DON'T visit it again. If you like a website's content (e.g. MacRumors) then disable your adblocker to help them get impressions and on the off chance you may find an interesting advert to click.

Unfortunately there's so many zealots out there who seem to think the internet should go back to non-commercial traffic. That capitalism is evil and that everything should be free online (music, movies, games) ignoring the TOTAL costs of production and always fixated on "marginal costs". Sadly the internet's future looks bleak as more and websites, in order to bypass the adblockers, will end up having to use adverts that become part of the article, e.g. brand placements. Actually resulting in a more annoying advertising experience and the loss of journalistic integrity! And these same people will be the first to complain! Ha.




Agreed. If you keep lowering prices to zero then you'll have to compensate somehow by decreasing the size of your workforce and lowering wages resulting in the attraction of lower quality workers. Both will directly affect the quality of the product you're creating and you'll end up going for the least skillfull publishing options, e.g. flamebait and "hit-whore" articles from certain websites that we see today. Rather than intelligent, investigative and insightful journalism.

And The Wire was an excellent series!

And let's not forget that a lot of newspapers have closed their foreign bureaus.

 

[TheIguana]

http://homedelivery.nytimes.com/HDS...bscriptionAcquisition&ExternalMediaCode=W31XX

Okay, enjoying math as I do, I worked out what a years worth of paper boy delivered papers is:

• If you are a new subscriber you pay $5.85 a week for 12 weeks and then $11.70 a week for the other 40 weeks in a year. So you would pay $538.20 a year; or 44.85 a month.
• But what about people who already subscribe? You would pay the regular $11.70 rate for the full 52 weeks in a year, so you pay $610.07 a year; or $50.84 a month.

Now just to compare, my local paper the Calgary Herald costs ~$285.66 USD year, or ~$23.81 USD a month. This of course takes into account currency exchange. A big discrepancy, yes!; but do consider that at this rate this paper is considered one of the few very profitable papers in Canada.

* I should also add, I used 52 week years and ignored the impact of leap years in these calculations.

 

[meecect]

... and mouthpieces on each political front funded by benefactors who like throwing money away.

That sounds pretty much like what we have now. Heck, in the UK, the Glenn Beck boycott has eliminated ALL of his sponsors, but they still air him, and just do sister network news updates and weather reports during the breaks.

In fact, one could argue that there is a very long history of news organizations existing SOLELY for that purpose. The owners may be throwing their money away, grinding their axes, but then they use that sharp axe to take down political leadership and get favorable business deals done. I guess only the Rupert's and the Hearst's can tell us if it is worth it in the end.

 

[dasman88]

Total craziness...

As others have said, news online will remain free.

If the NY Times, or anyone else thinks folks will pay more than $9 for a monthly subsccription to their rag, they are in for a rude awakening.

Frankly, I am a little surprised how many folks on this forum are out of touch with current online content monetization models.

What the NYT and every else entering this arena need to understand, is how to leverage advertising in this venue. They should be working out with Apple some agreements for NYT Ad Revenues on their iPad served pages.

THAT'S where the money is... and I expect Apple has been trying to tell that to the Rag companies. These executives that have this expectation of folks paying more than a few bucks for monthly content rights have their heads stuck up a dead horses a**.

NYT needs to negotiate Ad Server rights with Apple, and then make money on those ads, in limited density, on their iPad served pages. It's kind of a no brainer...

 

[PAC88]

No way I would pay a penny to this liberal news source.. let alone read anything from it

 

[nastebu]

That being said, while distribution costs are negligible, productions costs are not zero. Yes, the actual printing & paper costs are eliminated, but there still will be an additional cost for producing the online version. While much has been written about the iPad, very little has been revealed about content development for the new medium.

This is quite true. Production costs are not zero for an online version. And if we want it to be an online version that really takes advantage of the internet and the possibilities of integrating video, etc, the costs are quite high. You need people to shoot, edit, write, code, etc.

Thus ends my defense. NO ONE IS GOING TO PAY $360 per year. While it sounded like a great idea in the boardroom, it will fail. They need to go the other way, and charge a ridiculously low amount like $12 or maybe $25 per year. Price it low enough and it will become a game of numbers, as in volume. One only look at the example of micro-pricing as evidenced with the success of iTunes and the new fledgling Ap industry. Get 10 million subscribers and the amount starts to look respectable, and probably a lot more than they are actually making in profit now.

This sounds a lot like selling at a loss and making it up in numbers. The problem is the New York Times needs to make money, and if they produce a really good online version, their print subscriptions--which really do pull in more than $30 a month per subscription, will decline to zero. It's not what we want them to charge, it's what they can charge and still make money.

This is the problem that the iPad is trying to solve. How can traditional print media survive.

 

[nastebu]

Frankly, I am a little surprised how many folks on this forum are out of touch with current online content monetization models.

What the NYT and every else entering this arena need to understand, is how to leverage advertising in this venue. They should be working out with Apple some agreements for NYT Ad Revenues on their iPad served pages.

Ads have never generated enough revenue. The NYT has a very successful website, but it does not generate enough ad revenue to make up the cost of lost subscriptions. Print subscriptions are much better revenue.

 

[cocky jeremy]

$10? $20? $30? Buhahahaha. You can find the same news, even earlier, and for free. How do these idiots run companies?!

 

[coolbreeze]

This is an awkward time for news outlets. The Kindle has lit the world on fire with digital news/books. IMO, Amazon has done an outstanding job with it's content and most importantly, PRICING. Publishers need to understand that when a consumer drops $200 - $800 on a device mostly intended to read on, they aren't going to be thrilled to pay print prices for content. After all, it costs virtually nothing for an electronic version of text. Internet news = free. Kindle content = reduced prices vs. retail. How on EARTH can the NYT expect consumers to pay so much for it's content?

There is no printing, warehouse, machine, storage, transportation, delivery personnel, fuel costs with an electronic version.

Deal with the fact that it's now a game of volume at a lower cost. Once publishers get over the fact that they can no longer rape consumers for print media prices, the better off electronic media will be.

I'm willing to pay a reasonable price for e-media. $20-30/month is ludicrous. I won't even pay $14.99 for the Kindle version of the WSJ. It's overpriced (see reviews on Amazon).

$5.99 - $9.99 per month is the sweet spot for electronic newspapers. Magazines are at $1.99 or so.

Amazon has fortunately paved the way for this logical pricing model. Let's not hope the glitz and glamor of the iPad (ooohhh, pretty IPS graphics!!) doesn't cloud logical pricing and create greedy media outlets.

Oh, while you're at at NYT, it's time to ban all free content on your website. If someone goes to nytimes.com, you will need to require a paid account to see anything. Report back on how well that works!

 

[Chaos123x]

$30 a month!


They must out of their minds!


I can't believe this is true. With advertising and no Printing or Distribution fees the price should be pretty low.

I can't see anyone paying that much ever.

 

[JGowan]

He wants $15...

Oldest trick in the book... you say $20-30 so when you both settle on $15, the opposition feels like they got a good deal and that the "high guy" really bent over backwards to compromise.

 

[gwangung]

This is an awkward time for news outlets. The Kindle has lit the world on fire with digital news/books. IMO, Amazon has done an outstanding job with it's content and most importantly, PRICING. Publishers need to understand that when a consumer drops $200 - $800 on a device mostly intended to read on, they aren't going to be thrilled to pay print prices for content. After all, it costs virtually nothing for an electronic version of text. Internet news = free. Kindle content = reduced prices vs. retail. How on EARTH can the NYT expect consumers to pay so much for it's content?

There is no printing, warehouse, machine, storage, transportation, delivery personnel, fuel costs with an electronic version.

Deal with the fact that it's now a game of volume at a lower cost. Once publishers get over the fact that they can no longer rape consumers for print media prices, the better off electronic media will be.

I'm willing to pay a reasonable price for e-media. $20-30/month is ludicrous. I won't even pay $14.99 for the Kindle version of the WSJ. It's overpriced (see reviews on Amazon).

$5.99 - $9.99 per month is the sweet spot for electronic newspapers. Magazines are at $1.99 or so.

Amazon has fortunately paved the way for this logical pricing model. Let's not hope the glitz and glamor of the iPad (ooohhh, pretty IPS graphics!!) doesn't cloud logical pricing and create greedy media outlets.

Oh, while you're at at NYT, it's time to ban all free content on your website. If someone goes to nytimes.com, you will need to require a paid account to see anything. Report back on how well that works!

Garbage in, garbage out. Take a look at the posts above you. Might be surprised at how much things actually do cost.

 

[DTphonehome]

As a longtime Mac user/fan/stockholder AND a former manager at 2 market leading newspapers, I cannot keep silent on this topic....

GREAT post! Right on the money.

 

[DTphonehome]

I'm really surprised at the amount of people here who think that news is free... SOMEONE is paying for it, the news doesn't go out there and write itself. Quality ORIGINAL reporting is worth paying for. Yes, there may be sources of news that are "free" to you, but they will all gradually charge some sort of fee as they continue to lose money off the ad-supported model. Access providers and portals may pay the fee for some level of basic news, but for original stories (ie, NYTimes Magazine), editorials, etc, you are going to have to pay at some point. The WSJ does it, and they have managed to attract a rather large paying subscriber base.