Gruber nails it with this article on the New York Times pricing structure. I love that he doesn’t critique the pay wall itself. As a matter of fact, he wants them to succeed. However, their pricing structure has been the most head-scratching move.
The New York times should ideally be going for a high volume, low cost strategy, since they will still be serving ads on the site, even to paying users. They could make up the revenue difference through increased advertising revenue as well as the more users that would be willing to pay.
I want The New York Times to thrive. It’s long been my favorite source for national and world news. But printed newspapers have a limited — perhaps very limited — future, and the digital subscription plan they’ve unveiled doesn’t look like a winner to me. I’m pretty sure it’s too expensive — that is to say, that I think The Times would make more money by charging significantly less, making up for the difference per-subscriber in the number of people who’d be willing to sign up. But even worse, it’s too complex. Further, by offering relatively generous access to the nytimes.com website for free to everyone, the Times is providing an enticement to read the Times less.
A digital NYT subscription is something few people will feel they need. Many people might want one, to one degree or another, but for few will it be a necessity. That means it ought to be priced simply. (Even necessities ought to be priced simply on general principle, I say, but they don’t need to be in order to succeed.)