'New York Times' Considers Risk And New Revenue

The newspaper long held up as the exemplar of American print journalism is exploring ways both large and small to alter its financial model.

Two new examples have surfaced in recent days. Officials at the New York Times Co. acknowledge that they are considering whether to charge visitors to the NYTimes.com Web site for reading articles. And senior editors at The New York Times itself are also asking whether they should accept money from foundations to help underwrite the newsroom's prodigious journalism.

First, take the question of making people pay to read online. Visitors to NYTimes.com are being asked whether they would be willing to do so — and, if so, for what. The Times has twice attempted similar charges for Web traffic, and twice abandoned it. From its launch in 1996, the Times Web site charged readers logging on from abroad. That was abandoned on Bastille Day 1997.

More famously, the "TimesSelect" program charged online readers to access the paper's vaunted columnists, placing such writers as David Brooks, Maureen Dowd and Paul Krugman behind a pay wall. It infuriated many readers and also limited the reach of the columnists themselves. (Disclosure: NPR's CEO, Vivian Schiller, was the senior vice president and general manager for NYTimes.com who announced the abandonment of TimesSelect in 2007, after just two years.)

Precarious Positioning

Many newspaper companies now say they simply have to find ways to be compensated for all the hard work they do in reporting, editing and producing the news — even online. Amazon is putting renewed emphasis on its wireless reading device, the Kindle. Readers pay subscription fees to download news publications onto the Kindle, and Amazon currently takes the lion's share of the payments. So the Hearst Corp. and other media companies are attempting to develop their own devices to hold on to more of that potential income. Gordon Crovitz, the former publisher of The Wall Street Journal, is among the entrepreneurs behind Journalism Online LLC, which is attempting to offer its clients a way to customize pricing schemes for readers.

The Times newspaper appears better positioned than many of its peers to emerge strongly from the recession, in that it has a national reader and advertising base and because it has attempted to limit cuts to its editorial offerings. But the Times Co. is carrying significant debt — which currently stands at about $1 billion. In fact, the debt is so significant that executives restructured a portion of it with loans that carry 14 percent interest rates.

The Times has also been getting cash by shedding properties that are not part of its core business — such as its TV stations and, most recently, classical music radio station WQXR in New York. The Times also is looking for buyers for its prestigious but money-losing sister paper, The Boston Globe, where the biggest union's members appear poised to vote reluctantly to accept deep cuts in compensation.

The Times surveyed 30 online content providers that have succeeded in charging consumers for content, including Consumer Reports, Weight Watchers and ESPN. At the moment, two models are under closest scrutiny: metering, in which there would be a ceiling on how many articles visitors to the site could read for free before having to pay; and membership, in which people would receive as-yet undefined benefits for giving money — much as they do for making donations to public radio stations.

The Times is trying to see if it can hit a sweet spot in increasing its revenues without endangering the significant income from the company's digital side. But there is a lot at risk. The Times Co. makes about $237 million annually from its newspaper Web sites, largely from NYTimes.com (as opposed to its other papers, including The Boston Globe and The Sarasota Herald-Tribune). Essentially all of that revenue is from advertising — and if the audience dropped in size, as it likely would, companies would pay less to advertise.

Chris Anderson of Wired magazine and some other new-media gurus argue that information "wants to be free" — and that media outlets establish the indispensability of their content by keeping it that way. In that school of thought, others can be charged — not just advertisers, but others interested in learning how targeted people use news and Web sites. And some analysts argue that charging only works in niche areas that address readers' passions, such as sports, or their pocketbooks, such as Consumer Reports' ratings or The Wall Street Journal's financial analyses.

Nonprofit Aid For A For-Profit Company?

Meanwhile, Craig Whitney, an assistant managing editor at the Times who is in charge of standards, says the Times is considering whether to solicit money from not-for-profit foundations.

"We've begun to ask ourselves whether it would be possible to get the kind of support that NPR does from foundations for its journalism," Whitney told Bill Mitchell, an analyst of economic models for the news business at the Poynter Institute in St. Petersburg, Fla.

Since the New York Times Co. is a for-profit, publicly traded company, that may sound like a radical departure. Not entirely. The home page of the Times blog "Dot Earth," run by veteran environmental reporter Andrew Revkin, acknowledges partial support from a fellowship from the John Simon Guggenheim Memorial Foundation. Revkin was a 2006 Guggenheim fellow and used the financial grant to help pay for far-flung travel in recent years. There may be other similar patchwork examples. But there has never been any pervasive foundation support at the Times.

Last October, Jonathan Landman, a Times deputy managing editor responsible for digital news, attended a conference on innovation in the news business at the City University of New York journalism school. When he participated in a discussion group on publicly supported journalism, Landman was asked what he was doing there, given that the Times was a private, for-profit news organization.

Landman replied, with a laugh, that he was trying to figure that out for himself. He now has a lot of company at the Times.

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