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Will NY Times Charge For Content & Bundle Delivery With New Apple iPad?

Speculation is circulating from reputable sources such as Mashable  that the New York Times is contemplating charging for content. While legacy newspapers have struggled to develop new business models to address dwindling subscriptions and ad revenue, it's apparent that a metered system is on the table for consideration.

Titan of the TabloidsTitan of the TabloidsPrior to these rumors, Rupert Murdoch has engaged in an ongoing feud with Google  regarding pay-walls that would block access to news sites such as the Wall Street Journal. The larger debate that hangs like a ominous cloud over this test of wills is whether or not Web access can continue to remain free? Or whether 'paid content' may infringe upon these rights in the very near future? Up till now, with only a handful of news outlets raising red flags, this didn't appear to be a major issue. Now, with the New York Times potentially joining the fray, things are looking bleaker.

On January 17, Chairman Arthur Sulzberger Jr. is coming  close to announcing that the paper will beginArthuer Sulzberger, Jr.Arthuer Sulzberger, Jr. charging for access to its Web site. After a year of a sometimes fraught debate inside the paper, the choice for some time has been between a Wall Street Journal-type pay wall and the metered system adopted by the Financial Times, in which readers can sample a certain number of free articles before being asked to subscribe.

Even more self-serving is the possibility that a deal is brewing between Apple and the New York Times. With the yet-to-be-launched Apple tablet (iSlate), new rumors are emerging that Sulzberger may hold back from announcing his decision to coincide with a joint announcement with Steve Jobs. Dovetailing with their paid strategy, if the Times struck a content partnership with the Job's new device, they could now distribute their news in a brand new 'mobile' format and be perceived as giving additional value to their readers.

The reason I think this is the path they may be taking is when they tried to charge for their content from columnists in the past through their option, they failed miserably. Readership fell substantially and the project was abandoned.

What they were missing was a NEW 'distribution' model to piggyback the 'paid content' roll-out. Newspaper readers were use to paying for 'paper' subscriptions. However, the Internet squashed that delivery system, whether or not we were tree-huggers. Now, with the entree' of the Apple tablet (iPad), the Times can bundle the subscription fee in a number of ways. It could become part of the purchase price of the Apple iPad. It could come as a free one-year subscription, with annual fees for succeeding years. It could be a deep discount compared to what they will eventually charge for Internet users.

Whatever avenue they take, they will have opened up a new revenue stream that I am sure Murdoch et al and others will jump on as quickly as it's launched.

If this speculation on my part does become a reality, the only fly in the ointment would be real-time news delivery. I think the distribution on a new mobile device will be tremendously attractive to a lot of readers, but it would garner an even greater and larger market share if the news delivered to the tablet was updated regularly throughout the day. If the New York Times can figure out how to enhance their new monetization plan to include real-time delivery, I think early adopters will be lining up for those proposed $1000 tablets just as quickly as they roll off the assembly line. 

Check back with me in another couple of weeks to see if my prognostications are correct. Or leave me a comment and let me know your thoughts on the subject?

January 28 UPDATE:  Well...not to say, I told you so...but...the following puts us one step closer to a major new business model for legacy newspapers...

In presenting the iPad , Jobs was joined by the New York Times's Martin Nisenholtz, the senior vice-president overseeing the paper's digital operations, to present a crisp Times app for the iPad. Financially the New York Times has not struck any deals with Apple yet – as Nisenholtz said, it gave them only three weeks to develop the app. However, this seems likely to be the device that will finally put a price on digital journalism, and not only because the Times is heading towards a metered pay model for its content.

So what does it look like? When Nisenholtz introduced the Times application, he said: "We're incredibly psyched to pioneer the next generation of digital journalism. We want to create the best of print and best of digital, all rolled up into one." Which is what they did.

UPDATE: February 17, 2010 - Not only did my prediction prove correct -Gawker has word of a turf war going on over at the New York Times for control of the iPad version of the paper. According to an anonymous NYT insider, it boils down to this: The NYT print circulation folks want to charge $30 a month for access to the tablet version of the paper, while the digital operation side wants to go for a more reasonable $10 a month fee. Apparently, the print group is afraid that subscribers will cancel their print orders once they get access to the tablet version of the paper — hence the high price.

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Ron Callari
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