The New York Times’ plan to charge users online, which it unveiled today, has been dubbed by Ken Doctor a “pay fence” because it is easier to get over than a “pay wall”. The NYT’s fence is also rather low.
The NYT’s adoption of the FT’s metered model – online readers can access a certain number of articles a month before being charged – strikes me as a sensible way to go about it in principle, whether or not all the details are correct.
The advantage of the fence is its flexibility, compared with the “free at all costs” strategy of The Guardian, and the rigid paywall adopted by News International for The Times and Sunday Times. The NYT will be able to adjust it over time, once it sees how readers respond.
The FT has reduced the number of articles that non-subscribers can access to 10 per month, while the NYT is starting with 20 per month. In fact, the NYT fence will be even lower than that because articles accessed through social networks such as Twitter and Facebook will not count toward the limit.
To start with, the NYT stands a decent chance of not losing too much traffic or advertising while gaining a relatively small but useful stream of revenue from subscriptions. Over time, I would expect it to raise the subscription side by making the fence harder to climb.
The point is that a base of core paying readers has a far higher value than the subscription revenues alone would suggest. Ken Doctor expresses the point this way:
“Here is the growing epiphany about these core readers: Not only do they pay you, they use lots more pages than the fly-by people, the non-core sent by Google, Facebook, Twitter and all manner of other referrals. More than 50% of the Financial Times traffic comes from about 10% of its unique visitors, largely the paying ones, who just got a fee increase this year and paid up. The Wall Street Journal has seen similar disproportionate usage.”