Turf War at the New York Times: Who Will Control the iPad?
There’s a heated turf war going on inside the New York Times over the iPad, pitting print die-hards against people focused on the Times‘ digital future. The outcome will determine pricing for some marquee content on Apple’s tablet.
The internal fight might also determine how relevant — and profitable — the nation’s most prominent newspaper can remain in the digital future. Which is probably why there’s reportedly so much sniping over who gets to control the iPad edition internally.
On one side, a Times source explains, you have print circulation, which thinks it should control the iPad since it’s just another way to distribute the paper. They’d like to charge $20 to $30 per month for the Times‘ forthcoming iPad app, basically the product already demonstrated on stage with Steve Jobs, the source said. Why so much? Because they’re said to be afraid people will cancel the print paper if they can get the same thing on their iPad. Nevermind that iPad distribution comes with none of the paper or delivery costs associated with print, or that there’s already a free electronic edition available to subscribers who cancel.
On the other side, you have the Times‘ digital operation, which is pushing to charge $10 per month for the iPad edition and is said to be up in arms over print circulation’s pricing. The digital side will provide interactive content for the iPad no matter what happens, but does not want print circulation to have control of pricing, marketing and other facets of the product. It’s something of an uphill battle since print circ has had control of other e-editions, for example for the Kindle, which are also seen on the digital side as overpriced.
The dispute has apparently escalated all the way to the top of the Times Building, and top executives — presumably the same ones who secretly dined with Apple CEO Steve Jobs — are now debating which way to go. Among those supporting the $20-30 per month print circulation side is, we’re told, New York Times Media Group president Scott Heekin-Canedy.
Even by the standards of the old-fashioned Times, it would be shockingly retrograde to charge such a huge sum for internet content to protect the fading print edition. It would also be self defeating, exploding the paper’s best chance yet to charge readers for its digital product. (Even at $10 per month, the iPad Times will have to compete with the free-through-2011 Web edition.)
But it’s almost as shocking that the Times Company is having a discussion over this question at all. Really? You’re going to ruin this little gift from Steve Jobs? You’re still not sure if you’re ready to commit to this internet thing? Sigh.
If you know more about this debate, or similar debates at other publishers, we’d love to hear from you.
Update Feb. 17: Several readers and email correspondents have asked why the New York Times is even debating pricing for the iPad edition, given that it is essentially a clone of the Times Reader for regular computers, and given that the regular computer Times Reader costs $14.95 per month. The answer is in this followup post.
View full post on Gawker: valleywag
I don’t get it. They’ve been handed a closed platform that will never have adblock installed. The users are obvious affluent and in-demand for advertising. You could still change a small monthly fee ($4.99 or less) and get away with a handful of very profitable ads. Maybe have a cheap version with ads and a 30-day back issue and an “elite” version without ads and full back issues. If they don’t hook people now, they’re doomed. $30 a month isn’t going to do anything but push people to free alternatives.
Also, the people who are tech-savy enough to read their news on a $500+ digital tablet weren’t buying a paper subscription anyway.
cjschmidt
I’d pay $10 a month, maybe – but I’d at least try it and see if I liked it. $20+ a month, I won’t even entertain it; I pay that in Web Hosting fees a month, I donate that to good causes.
Welcome to the digital world, you have little to no production costs save servers and staff… not cheap, but a far cry from paper printing, delivery, mass production, distribution centers, etc.
Brady J. Frey
I’d pay a lot for it if it was personalized for me and not just a replication of the print edition. But just replicating print would be worth little.
Neil Budde
I think they should start cheap and work their way up. I’d pay a buck a month and then they could do that thing of raising their rates and not tell me and make it impossible for me to back out and unsubscribe.
Maulleigh
Living in New York City must have blinded these people to how much money is actually worth. Out here in the hinterlands where 500 square feet costs less than $600K, $30 is a lot of money. I recently ditched digital cable to save $70 a month, and that was 200 channels x 24 hours a day of programming. No way in h*** I am going to pay $30 for the Times. And I read 8-10 stories on their website every single day, so I am a very regular reader. That’s not to say I won’t pay at all – $5 feels reasonable to me.
afw
@Glanton: If the news business does not work out a way to turn their product into profit you will not get it for free much longer. Very soon the only “news” that will be free is blogs.
ismootbanght
I hope they don’t make the same mistakes Kodak did.
misha trotsky
According to Philip K. Dick stories, the New York Times will switch to homeopape-only format by the time of World War Terminus.
“The structure,” the minor CURBman said, “was once a great homeostatic newspaper, the New York Times. It printed itself directly below us… We haven’t located the newspaper yet; it was customary for the homeopapes to be buried a mile or so down…”
“…the entire network of newspaper communication and news-creation has been idle since [the Misadventure]…
Early the next morning the report from the corps of engineers reached Hood in his temporary office. The power supply of the newspaper had been totally destroyed. But the cephalon, the governing brain structure which guided and oriented the homeostatic system, appeared to be intact…
lanthewignom
Good content should not be free. People’s livelihoods are at stake here. But let’s be reasonable. $20-$30 a month is laughable.
NYT could see a resurgence if they price accordingly. As would the newspaper industry as a whole.
While we don’t know just how popular the iPad will be what we do know is that there are over 10 mil. iPhones in the wild, and quite a few Android phones, netbooks and e-readers.
You don’t have to be so greedy. There are more than enough potential subscribers just give them the right price.
The-Ohio-Player
Charging for $20-30 to protect the printed paper? Why not give up all digital edition and live with printed paper ever after. It is amusing to see how office politics can make a fool out of a company of smart people.
bonelyfish_1
Sounds like the real problem is the fact that there are separate print and digital divisions with multiple levels of executives above them.
Fire half the management, and the company might have the flexibility to adapt and move forward.
nialdritchme
In the Bay Area commuters into San Francisco pay $6 each day for the privilege of crossing a bridge. Not because it’s worth it, but because we are without an option.
Once the iPad and other paid variations are made available the free online NYTimes will be drastically trimmed. That will eliminate the option. But in the end survivability will be based on not just price but also the content.
Can NYT maintain the quality of content when the cost of production is severely cut?
saronian
A largely overlooked component of the “How should the NYTimes charge for its content” discussion is this:
There are a number of benefits to the paper version that readers aren’t going to get with the iPad version.
If nothing else, you get the “utility” of a stack of newsprint that can be used to wrap your leftovers or put in the bottom of your birdcage. Carrying a paper NY Times carries with it a certain cachet. The print version lets you browse the Barneys and Tiffanys ads. You can play the office hero by leaving the print version in the lunchroom. None of these benefits will accrue to digital subscribers.
For a large portion of the NY Times current readership those benefits are going to be the reason they keep their print subscriptions.
Instead the NY Times management ought to be exploring ways in which they can use the digital model to expand their readership far beyond the core New York metro area reader base. We don’t mind paying something to read the best newspaper in the world. But we also don’t need another $30 per month expense.
vroddrew63
@MrInBetween: unfortunately I agree, especially with the creaky ‘ole Print Boys in charge.
bodegacat
Wrong question. First will many buy the I-Pad. Second how do you entice people to buy content they currently are not or will not. Third, why would anyone believe that paying $500+ for a device will be a catalyst?
oldgeek143
I find it amazing how executives like Scott Heekin-Canedy can be completely disconnected from reality and blinded by internal politics.
Scott, your concern should not be the printed version being cannibalized by the digital version. You concern should be the NYT vastly losing readers as substitute electronic media is available for next to nothing.
Digital has changed the world. You don’t have to be a genius to see that printed newspapers and magazines are losing ground. There is plenty of good digital content for free and the only way to fight it is by offering quality content for reasonable prices. And no – $10 per month is NOT a reasonable price (if you want to reach more than a tiny minority). If you can’t make a valid business out of this – find someone that can or lose your business completely.
oferkarp
@barry006: Depends where you are. Here in Colorado, a 7-day subscription to the national edition is over $50/month. $20-30/month sounds like a bargain to me.
citrin
Dear NYTimes,
As an employee of a smaller struggling newspaper, I beg of you – DON’T FUCK THIS UP! It’s too important.
Two points for the NYTimes Circulation desk
1) There will always be a print edition because people won’t want to spend $300 for a Kindle or $500 for an iPad. Think of it as the difference between renting a place and buying a place. Some people won’t want to make that huge investment just to get a cut in the newsstand price. Those who like to read it on paper are going to pay to read it on paper, just like they have been for the past 150 years.
2) Customers with Kindles or iPhones or iPads or laptops are also going to access your content. Your choice is whether or not your provide that content for free (as is currently the case) and lose tons of money – or – creating a new revenue stream.
It won’t generate as much revenue as the print edition because it doesn’t need to. There is no need to cover the huge expenses of paper, ink and press maintenance. Since you only have to cover newsroom costs, you can charge less and get more people to subscribe to it.
More subscriptions = more money, more money = fewer layoffs and a product people want to buy and read.
ndhapple
@bodegacat: This is a scary-smart proposal.
Chance it will happen? Less than zero %.
MrInBetween
@RussianTaco: That’s a really good idea. My sports and biz (except Media Mondays) went straight to recycling, and I know others who used styles as a placemat.
Hello, Pinch?
SaraRueful
Meanwhile in the UK, The Guardian newspaper has released a great little app for the iPhone that gives you free access to the newspaper’s content, all for a one-time payment of around $8
artistry
I recall this same issue happening at Kodak at the onset of the digital camera era in the mid-90s. At first, Kodak wanted little to do with digital camera technology as they were a film manufacturer. When the upper level management changed in 1995 or so, the CEO was considerably more forward-thinking with statements like “if anyone is going to kill film, it will be us.”
Christopher Scott Rider
For the record, I worked at the NYT Digital back in the late-90s boom. The same politics were at play in the company then. I’m not confident that the gray lady will be around ten years from now.
Tom Dibble
Huh. Even at $10 per month, you’ve lost me. I tend to read maybe a dozen Times articles in a month. $10 for one month of ONE SOURCE??? So the other dozen sources I rely on (generally all much more than the Times, I might add) can also charge $10/month, and I’m spending another $100+ per month just to get multi-sourced news? Yeah, I don’t think so.
Print or digital, they’re all trying to milk this as a cash cow. The problem is, the vast majority of their potential consumers never subscribed to the NYT print edition and wouldn’t dream of paying a huge subscription fee for just one newspaper’s output.
Tom Dibble
Doesn’t this seem like the perfect opportunity to set up a pay-by-story infrastructure? A few cents a story? I’d totally go for that.
Michael Bishop
Seems like classic marketing myopia – seeing themselves in the print media business, threatened by digital, instead of in the news/communications business. Like cable companies that now have a gazillion channels (along with phone and hi-speed internet), the digital-version gives them unlimited content opportunities along with radio and video news segments/shows, etc. With some vision, they could use their brand & credibility to be the leading purveyor of news/communications across all media.
They could start with a range of prices to get folks onboard. Like the cable companies, start with a basic package at $10/month, but have $5/month basic intro offers for the first 3 – 6 months of service (making it illogical not to have it). The price-tiers could rise to include crosswords, certain sections, the archives, classifieds, etc. – the equivalent of the cable companies adding HBO and Showtime, etc, or phone & high-speed internet, with special-priced combo packages.
$30/month or more could be the top tier for the whole shebang – including free archives AND free classifieds as an incentive. (Seems like the NYT version of Craigslist would net them alotta hits and a large base of companies/individuals in the habit of using NYTimes classifieds, with a possible fee-paying backend.)
bodegacat
One reason I want to buy an iPad is so I can read the NY Times on it. I currently pay over $50/month for the print edition. I would be happy to trade that in and pay $20-30/month for the iPad edition.
citrin
Simply put, the *only* way this is going to work out for the Times is if they charge $10/month or less. Otherwise, don’t even bother.
michaelrjohnson
The paper NYT on a subscription deal costs around $25 a month.
Distribution and print costs of the NYT are around 50% of their costs, plus retail margin. So if they’re giving 30% to apple then to recoup the same for a ipad reader as a paper reader they need a price around $15.
barry006
Both of those prices are insane. They need to be thinking in single digits. Something like $6 or $7
joemac79001
@jimstoic: I’d pay 50cents a day to get the NYT on an easily readable mobile device and avoid the subway contortions and annoyance(I still can’t get the folding thing, and go article to article fast enough, even after years) that are necessary to stand and read the Times. The Daily News easier for this. But, that limits the audience to NYC subway riders. If I drove to work and pullled up NYTimes.com on my laptop when i got there, no way in hell I’d pay to have it on my gigantic iphone.
audiogeek
this is the same kind of internal squabbling and politicking between “print” and “digital” that’s been going on for years now. here’s an idea! have another round of layoffs on the “print” side, in “business”. get rid of all those directors and managers who were promoted into their jobs not for performance, but for being friends with their bosses. those same people who are running around trying to act relevant. those same ones who never seem to get let go during a round of cuts because there is an understanding that they are somehow “protected”. then, truly merge print and digital for a leaner, meaner, company with common goals and objectives.
emilyfoxworth
We just need to come up with some new ideas to radically change the way we offer content to our subscribers. . .(crickets)
dicvandyke
This conflict is so typical of the Times. The head of the reader is also the head of circulation, and her boss is Scott Heekin-Canedy, who grew up on the print side and always sides with the print side. Really, who cares if the iPad cannibalizes the print if a $10 iPad app reader is worth more than a print subscriber paying double that? There’s no printing, etc cost with the iPad and the advertising revenue should be as good as with print since the quality of the ads will be high. This is the same fight that gave them TimesSelect, with the print side winning out.
oopsidoo
Let’s get down to what is really important: will the iPad edition have the crossword? I’m not going to take my laptop into the shitter with me to do the crossword, but the iPad seems appropriate.
rabbitangstrom
@Niko Bellic: The DIGITAL picture of a straw.
In Flash, for the Alanis Morissette kind of irony.
rebelyankee
I still don’t see the reasoning on why this shouldn’t be priced in the same way as Times Reader ($14.95), as it is essentially the same product except on the iPad instead of Windows/Mac.
I’d subscribe for $14.95, not for $30. Also, that price should include Times Reader for Mac/PC.
jmckee
Until I can fold my iPad up like broadsheet I won’t buy it!!
anonymousryan
@jimstoic: why would I pay to read for it on the iPad
Because the media wants (needs!) you to, stupid consumer!
Niko Bellic
@Niko Bellic: You mean there isn’t an app for that?
Knight_Of_The_Burning_River
iFad.
Martyn Jackson
@rebelyankee: It’s not like reaching for a straw. It’s like reaching for the picture of a straw!
Niko Bellic
Yeah, but what does Paul Krugman think?
DennyCrane
@Glanton: why in shit would I spend a buck a day on something…
…that I can’t use to kill a fly or to wrap the garbage in.
Niko Bellic
I’d prefer they offer the chance to purchase each section separately, say at $5 per section per month, with buy 2 get 1 half off deals or the like. That way I could pick and choose the sections I want to read. The prices could even float on level of demand.
RussianTaco
If I wouldn’t spend a buck a day on the paper, why in shit would I spend a buck a day on something I’ve become accustomed to getting for free?
Glanton
It’s kind of cute that they think this is going to save them. Even if 10 million ipads are sold, do we think all of them will subscribe to the Times? Do we think 1% will?
rebelyankee
I don’t get it. Just like I wouldn’t pay to get the NYT on my Kindle when I can read it on my laptop for free, why would I pay to read for it on the iPad, which will give me something even more like what I already get on my laptop?
I can see one synchronicity here: the market for iPads will consist disproportionately of people who are able to spend the additional money if the pages turn in a pretty way.
jimstoic