The New York Times Company (NYT) may soon be charging readers for its online content, which will bring the media conglomerate at par with the Wall Street Journal and the Financial Times.
In an effort to offset declining revenue and a shrinking market share, publishing companies are now considering charging readers for online content. This comes in the wake of a longer-term secular decline as more readers choose to read news free online, thereby making the print-advertising model irrelevant.
The New York Times is considering two options for charging online traffic. The first option is the Wall Street Journal’s walled-garden system, where some articles are available free but certain other articles are only available to paying subscribers. The second option is the Financial Times’ metered system, where readers after browsing a certain number of free articles, are being asked to subscribe.
Charging online users for content will definitely increase revenue but at the same time, there is a high risk of losing online traffic and advertising dollar, since display-advertising revenue is fueled by page views, and restricting the readers to access a certain number of articles may depress advertisers. The New York Times should find a way to generate revenue through online subscriptions without hindering online advertising.
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