New York Times to spend 2010 erecting a partial paywall

Like many publications with one foot in the digital world, one foot in print, The New York Times has been struggling to find a strategy for ensuring a consistent stream of income as its readership moves online. After trying a paid access service for several years, the paper moved to free access to its content. But it's apparently time to go back to the future for the NYT, as the company announced it will develop a system that will charge frequent readers of its online content.

Rumors of a change in policy began circulating last week, but the company has only released the barest of details at this point. Readers will get free access to a limited number of articles per month, although that number has not yet been determined. To read anything beyond that, the Times will charge a flat fee, which will allow unlimited access to everything on the site.

Like the article limit, the fee has yet to be determined. There's plenty of time to sort it all out, however, as the system won't be put in place until a year from now, in January of 2011.

The Times' own coverage of the matter is quite thorough, in part because it provides some information about the traffic patterns on the site. Most of the people who visit the site arrive through external links and only stay as long as it takes to read the article they're interested in. The smaller number of hard-core readers, however, account for the majority of traffic on the site. It's the latter group that will be targeted by the new billing system.

The intent is for the new charges to create a second revenue stream, in addition to advertising, from NYT online content. In doing so, NYT will join The Wall Street Journal, which restricts most of its content to subscribers, and The Financial Times, which uses a system similar to that planned by The Times. But those papers serve a specialized and extremely well-off community—one that, presumably, writes off the costs as a business expense anyway.

The Times is apparently expecting that a less specialized audience will be willing to pay for the perceived value the publication adds to basic reporting that can be had elsewhere for free. That, as even the Times' coverage notes, creates the risk of driving the site's most dedicated users away, and actually killing off the ad revenue stream in the process.

Controlling access

Aside from those users who stay away from the Times site simply because they don't know whether they'll be able to read on a given day or not, the biggest danger here is likely to come from the convenience of the system used to track usage and provide login credentials, which presumably explains why the development of this system is used as the explanation for the one-year timeline on rolling out the paywall.

There are any number of ways to implement these systems—IP addresses, cookie-based (regular and Flash), and stored passwords—and all of them suffer drawbacks. Institutional subscribers, like libraries, tend to clear all cookie and password information with the end of a user's session, so IP-based validation will work well for them. In contrast, this would be a nightmare for laptop users, who may hop on and off a dozen wireless networks over the course of a day. Regular cookies are easy to clear and will force users to memorize yet another user/password combination; Flash cookies can be more persistent (and are more difficult for average users to remove), but they require Flash, with all the drawbacks that entails.

The Times also mentions that it intends to provide "a frictionless experience across multiple platforms." That's presumably a reference to the booming crop of e-readers, smart phone software platforms, and the likely impending tablet from Apple. That's certainly setting the bar high for a user management system the company intends to develop in-house.

There's no one-size-fits-all solution that handles these situations flawlessly, and the Times (as it's happy to point out) is one of the most popular news sites on the Web, so a glitch that affects even a small percentage of users will translate to large numbers of unhappy readers. The Times will really have to get its user tracking system right, or risk being an example of what not to do for its fellow newspapers. But if it can successfully launch a second subscription revenue stream, the paper's online operations could be on firmer footing.