The opportunity cost of the New York Times’ Pay Wall

Sat, Mar 19, 2011


There’s been a lot of debate surrounding the New York Times’ recent announcement of a pay wall. The merits and complexities of the Times’ subscription options aside, former Times employee and design director Khol Vinh argues the opportunity cost incurred to develop the pay model will not be worth the payoff.

Explaining that it took the NYT approximately 18 months to conceptualize the pay wall and get it up and running, Vinh argues that that time could have been better spent on any number of other endeavors, especially because the Times is expending resources on a product for an arguably dwindling audience.

The people who will open their wallets and subscribe will be the hard-core Times loyalists, and it’s generally understood that those folks fall into an older demographic, and that there are fewer of fewer of them every year.

There’s nothing wrong with building products for that audience, of course. But the world doesn’t stop while The Times gets its books in order. Newer, younger audiences are growing up into a world where The New York Times is an afterthought, and they’re forming patterns of news consumption that barely incorporate The Times if at all.

Just think what else could have been done with the time and resources that the company devoted to the pay wall: entirely new news products could have been developed, products that could engage a wholly different kind of audience and expand the company’s reach by several orders of magnitude. Flipboard was born in roughly that same time span;The Daily, for all of its imperfections, was conceived and launched within less than half that time. Groupon skyrocketed to prominence and tremendous revenue in that time, and over the course of the past eighteen months any number of other information-based startups and new products debuted and captured the public’s imagination.

It’s an interesting opinion, and Vinh’s point that readers today are growing up in a world where the NYT simply lacks the same kind of esteem that it once had in a pre-digital age should not be overlooked. The Times is often referred to as the national paper of record, but for many kids growing up today, it’s just a paper.

As for devoting resources towards other initiatives, that’s a little bit more tricky. Sure, the NYT could have made a huge foray into the iPad world a’la the Daily, but it remains to be seen how that will ultimately pan out. But come on, Vinh can’t realistically have expected the Times to have come up with something like Groupon. The New York Times is a journalistic entity; it’s focus is not, nor should it be, on delivering 40% off deals to local Sushi shops. But Vinh’s broader point is well-taken. In 18 months the Times came up with a pay wall model that’s more confusing than anything else, while also, perhaps, lacking the foresight to account for the new age of journalism that we live in.


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