The big bet
As the internal debate over whether to implement a paywall stretched on, the economy continued to go downhill, and the future of the entire newspaper industry became even more uncertain. On May 6, 2009, Senator John Kerry convened the first hearing of the Senate Commerce, Science and Transportation Committees new subcommittee on Communications, Technology and the Internet. In introducing the hearing on the future of journalism, Kerry said he was concerned about the long-term and accelerating trend of newspapers losing daily and Sunday readers.
Kerry pointed out that the New York Times Company was valued at under $800 million, less than the company had paid for the Boston Globe a decade and a half before. He mentioned that financier Warren Buffett had said he wouldnt invest in newspapers at any price. He cited the words of Joseph Pulitzer in assessing the importance of newspapers: a Republic and its press will rise or fall together. [33] On May 28, executives from most major newspapers met in Chicago to discuss options for building a business model for the Internet. [34]
That same day, Bill Keller received an updatean 11-page memo titled Metered Model Research Updatewith some tentative good news. The Times had surveyed a sample of NYTimes.com users to determine their willingness to pay at different price points under a metered paywall scenario. Preliminary results had indicated a willingness to pay. They had finally found a paywall model that might be viable.
But problems remained. On August 7, a specially-designated Digital Strategy Steering Team sent a seven-page memo with a 10-page Metered Model Memo Appendix to the Digital Steering Committee that summarized research on the metered model and was designed as the basis for a go, no-go decision. The memo concluded that, for the metered paywall to work, there had to be enough customers willing to pay, and at the same time site traffic had to be preserved to prevent a loss of advertising revenue. For the quarter ending March 2009, the New York Times had had 20.2 million unique visitors and 690 million page views. One of the main reasons for paywall failures, including TimesSelect, was that paywalls held down site traffic. The steering committee went through an exercise that showed just how fraught the decision was, says General Manager Warren: Because, depending upon what you believed, you could really construct a very legitimate case that this was the worst thing we could ever do.
Warren on making the paywall decision.
Models? By 2009, some two dozen newspapers had experimented with paywalls, and at least half had failed, says Tara McMeekin, editor-in-chief of News & Tech, which published a North American paywall list. [35] Meanwhile, the economic outlook for newspapers looked increasingly grim. In the six months ending September 30, 2009, weekday sales were down by 10.6 percent and Sunday sales by 7.5 percent. The industry was selling fewer papers than at any time since the 1940s.
For its part, New York Times weekday circulation by September 2009 had fallen yet again--by 7.3 percent, dipping under one million for the first time since the 1980s. [36] These results drove plans for a second painful round of staff cuts. Kellers newsroom needed to shed another 100 jobseight percent. It was time to make a final decision on whether to go forward with some kind of a metered paywall.
![](../../files/photos/932/Eagle Room at the Times Source Times 325.076.jpg)
New York Times
The Eagle Room at the New York Times
In late October 2009, Sulzberger called a meeting in the Eagle rooma 15th-floor dining room at the Times. [37] Leaders from the business, editorial and website operations attended. The meeting was unusual because CEO Janet Robinson asked for everyones opinion, [She said] lets put our cards on the table, what do you think? and everyone went around the table offering arguments for or against the paywall, says Rosenthal. Despite his dislike of the TimesSelect model, Rosenthal spoke in favor of the metered model. He was part of the newsroom contingent that agreed with Executive Editor Keller: newspapers should rely on both advertising and subscription revenues. Robinson and Sulzberger both spoke in favor of charging. But it wasnt an obvious choice. This was not a gut call, says Sulzberger.
Sulzberger on the quality of the discussions.
Meanwhile, the digital side generally argued against the paywall, says Nisenholtz: All of the digital people were fairly adamant about keeping the site as free as possible. One of the worries was alienating younger viewers. I was very worried about influence and traffic, says Landman. I was worried about the plateau affect that wed experienced with TimesSelect. That youd get a quick shot of revenue and then it would stop or at least it would top out. Landman says he was also concerned that erecting the paywall, which was projected to take a year, would distract the Times from other, possibly more long-term, solutions.
Landman on the potential effects of a paywall.
Would the significant development effort be worth it? Would Times readers pay for Web content that had previously been free? Would the paywall turn away casual readers, cutting the reach of Times journalists and affecting advertising? Or would the metered nature of the paywall encourage casual readers? Would enough readers sign up to provide a viable income stream from the paywall? Would the income be sufficient to ward off future staff cuts even if advertising revenue continued to fall? What about the delay that a paywall might cause in other technology development? ? With more cuts pending in the newsroom, the Times had to do something to stem the bleeding. But making the wrong call could be very costly.
[33] Hearing of the Communications, Technology and the Internet Subcommittee of the Senate Commerce, Science and Transportation Committee-The Future of Journalism-Public Statements-Project Vote Smart, Project Vote Smart, May 6, 2009. See: http://votesmart.org/public-statement/422651/hearing-of-the-communications-technology-and-the-internet-subcommittee-of-the-senate-commerce-science-and-transportation-committee-the-future-of-journalism - .Uw5PKIWhZqx .
[34] The Chicago Meeting Collections Nieman Journalism Lab Pushing to the Future of Journalism, Nieman Journalism Lab, accessed April 28, 2014, http://www.niemanlab.org .
[35] Author's telephone interview withTara McMeekin, editor-in-chief of News & Tech, March 6, 2014. All further quotes from McMeekin, unless otherwise attributed, are from this interview.
[36] Richard Perez-Pena, U.S. Newspaper Circulation Falls 10%, New York Times , October 27, 2009, sec. Business / Media & Advertising. See: http://www.nytimes.com/2009/10/27/business/media/27audit.html
[37] People's memories differed on the exact date of this meeting.