The New York Times Company (NYT) will restrict the number of articles that can be accessed through search engines following the implementation of online subscription, slated for a global launch on March 28, 2011, Associated Press reported. This would make it hard for Internet users to avoid the payment gateway each time they visit the newspaper’s website through various search routes.
Earlier, the media conglomerate had hinted that online traffic via Google Inc. (GOOG) will be able to view five articles per day before being asked for a subscription, and readers visiting the news website via blog links or social-media sites such as Facebook or Twitter, or through other major search engines will be able to access unlimited numbers of articles.
The New York Times Company is trying to make the model more restrictive on free articles. Accordingly, it is bringing major search engines such as Microsoft Corporation‘s (MSFT) Bing and Yahoo Inc.(YHOO) on the same platform with Google, thereby restricting Web surfers’ unlimited aaccess to articles through search engines.
The publishing industry has long been grappling with sinking advertising revenue, with the recent global economic meltdown making the situation even worse. This comes in the wake of a longer-term secular decline as more readers choose free online news, thereby making the print-advertising model increasingly irrelevant.
In order to curb shrinking advertising revenue and seek new revenue streams, the publishing companies contemplated charging readers for online content. The publisher of The New York Times, the International Herald Tribune, The Boston Globe and 15 other dailies said that it has adopted the Financial Times’ metered system, whereby after browsing a certain number of free articles, readers will be asked to subscribe to enjoy access to its full articles on phones, tablet computers and the Internet.
The New York Times Company has fixed monthly charges of $15 for access to more than 20 articles on its website and a smartphone application; $20 for unlimited access online and on Apple Inc.‘s (AAPL) iPad tablet computer application; and $35 for online, smartphone and iPad application.
It also specified that subscribers to the New York Times’ print version will be able to access content or articles online as well as on all applications of The Times at no additional charge.
We believe the success of the pay model depends on the accessibility of new articles across the Web. People will be reluctant to shell out if content is available free of cost elsewhere. The Wall Street Journal and The Financial Times were the pioneers of the subscription-based model.
Way back in 2005, The New York Times Company had attempted to charge readers for online access to its columnists on a platform known as TimesSelect but rescinded it after two years as it failed to generate enough revenue.
Currently, we have a long-term “Neutral” rating on The New York Times Company. The company also holds a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating, and correlates with our long-term recommendation.
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