The New York Times Gets It Backward

The New York Times (NYSE: NYT  ) is facing a reality most news organizations will soon face: Relying on ads is a tough way to run an online news outlet. The Times will begin a "paywall" over the coming weeks, charging readers a monthly fee after a certain number of articles are viewed.

This is entirely justified. Businesses need cash. Ads don't always provide enough. So you charge. News Corp.'s (NYSE: NWS  ) Wall Street Journal does it. The Financial Times does it. It's about time NYT joined the club.

As part of NYT's paywall rollout, Ford's (NYSE: F  ) Lincoln is sponsoring about 200,000 of NYT's "heaviest online readers," offering a free subscription for the remainder of 2011, worth about $150.

This morning I was lucky enough to find myself as one of those readers. Great! Thanks Lincoln!

But here's the thing. I would have happily paid for a subscription. The Times should have known this, as I'm already a heavy online reader by their own description. This promotion selects readers who are, by definition, loyal, avid, dedicated readers. Not only are we customers who will pay for a subscription, but we'd probably pay more than the going rate if necessary.

I know it's Lincoln footing the bill, not the Times, but this seems backward. You'd think NYT would charge people like me a premium price, and try to win over more marginal readers with free memberships. If targeting is the key, you can still bombard me with Lincoln ads as you please. I'm going to show up no matter what. Be smart: Spend your advertising dollars luring someone who isn't as loyal.

Got a different take? Share it below.

Fool contributor Morgan Housel doesn't owns shares in any of the companies mentioned in this article. Ford Motor is a Motley Fool Stock Advisor pick. The Fool owns shares of Ford Motor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (6) | Recommend This Article (7)

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  • Report this Comment On March 22, 2011, at 4:45 PM, TMFCHarris wrote:

    I had the exact same feeling when I got that email this morning.

    Did you find the size of the Ford ad buy? Even assuming a 50% conversion rate among the die-hards, it looks like the Times left 15M on the table here.

  • Report this Comment On March 23, 2011, at 1:11 PM, hrse wrote:

    I am not an avid NYT reader. I only read about 2 stories a week. I did not get the free subscription, and I am not certain that I will pay for one myself....

    I do like what they did.

    Every once in a while it is nice to know that someone is recognizing your loyalty.

    What would they have said to their paying advertizers if they lost even 10% of their most active readers? These are the ones that make the advertizements most valueable.

  • Report this Comment On March 23, 2011, at 5:27 PM, TheMotleyTimbear wrote:

    Couldn't this be viewed as a reward for avid readers? "Hey if you keep on reading our content, we will make the next price hike on you way easier to deal with!" Not saying its the right strategy, but maybe the only strategy they could come up with...

  • Report this Comment On March 23, 2011, at 5:33 PM, NOTvuffett wrote:

    The NYT gets things backwards? This is not news to much of the USA, lol.

  • Report this Comment On March 23, 2011, at 5:44 PM, ETFsRule wrote:

    Krugman pointed out that you can circumvent the paywall if you follow an external link to a NYT article... this way it doesn't count against your monthly limit :-)

  • Report this Comment On March 25, 2011, at 10:49 PM, encendere wrote:

    It was Lincoln making the call on that, not the NYT.

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