All the News That’s Fit to Charge For

The New York Times announced that effective next week, it would start charging for online access to its articles. The move has spurred widespread debate both inside and outside of the 159-year-old newspaper, which is trying to figure out how to create a sustainable business model while rubbing up against the popular notion that all content on the Internet should carry the same price: free.

“I believe that our journalism is very worth paying for,” said Jill Abramson, the paper’s managing editor for news. “In terms of ensuring our future success, it was important to put that to the test.”

Peter Drucker, we think, would have applauded the test—and, in particular, the way that the Times is going about it.

About five years ago, the Times tried a different pay-for-content system, but the effort was scrapped after executives realized that it was actually cutting into advertising and readership. It’s crucial to engage in “planned, systematic abandonment” of anything that “no longer conveys satisfaction to the customer or customers,” Drucker wrote in his 1973 classic, Management: Tasks, Responsibilities, Practices.

Even more impressive, though, is the way the Times followed up from there. Rather than completely give up or rush out with a new model, it dug for answers. “The unexpected failure,” Drucker asserted in his 1985 book Innovation and Entrepreneurship, “demands that you go out, look around and listen.”

In the case of the Times, company strategists spent over a year assessing and examining scores of business and financial models. They conducted more than 20,000 customer surveys. In the end, the paper settled on a tiered pricing plan that allows people to read 20 articles a month at no charge before choosing a subscription from $195 to $455 a year year, depending on the platform being used to view material.

Perhaps most impressive is the amount of flexibility built into the system. Articles accessed through social networks such as Facebook won’t count against the monthly limit. On a big breaking news story, the paper can elect to tear down the pay wall and make everything available for free.

Rather than pricing something so as to recover costs and maximize profit, “the only sound way to price is to start out with what the market is willing to pay,” Drucker counseled in 1993.

What do you think: Will the Times’s new pay model work?