The New York Times today announced its long-gestating plan to charge the heaviest users of its website, setting the trigger for pay plans at 20 articles per month. We spoke with Janet L. Robinson, president-CEO of The New York Times Co., about the thinking behind the meter, the impact on advertisers and its agreement to use Apple's subscription service, which many magazine publishers don't like.
Here's a lightly edited transcript of our conversation.
Ad Age: How did you decide to set the limit at 20 articles per month?
Ms. Robinson: We did a great deal of research in the last two years and of course analyzed that research to really come up with the bundles that we presented today and also where indeed we would place the meter. A lot of that info was garnered from in-depth discussions with our user base. It was clear from the research that there was willingness to pay, that indeed that they have a wonderful relationship with the brand and want to receive its content across a wide variety of platforms.
Ad Age: What proportion of your digital audience reaches that 20-article limit and will be asked to pay?
Ms. Robinson: Approximately 15%, and that's a very approximate figure, will probably interact with the gate. People coming in from third parties, side doors, social media, the search engines, they will indeed be able to access our content. But it's approximately 15% that would be indeed interacting with the gate.
Ad Age: This will undoubtedly have an effect on your web traffic. What do you tell advertisers that need to reach big audiences and are worried that yours will decline?
Ms. Robinson: I think it's very hard for any one of us to predict consumer behavior. For us to say there will definitely be a drop or definitely be an increase or definitely maintain is really hard to do.
This is a long-term strategy. In the long term, we have the opportunity to not only maintain our audience but to grow it. In the short-term perspective, going to something new in this transition time, there may be a slight dip in traffic.
But from the perspective of the way we've constructed the bundles and will remain part of the digital ecosystem, we believe we have protected our traffic and consequently protected our advertising inventory and advertising revenue.
Ad Age: Will you be able to collect more information on the users who pay for digital access and therefore sell more targeted ads against them than you can do for the general mass of people who read for free?
Ms. Robinson: We have for a number of years put together customer programs for our advertisers because we know a lot about the people who use our website and how they use our site. Those customer packages are going to continue to be presented to our advertiser base.
And with more information, certainly in regard to digital subscribers, we will be making sure that our advertiser base is aware of how people are converting to this paid model and how they're using our website and how they're interactive with the content and the advertising.
Ad Age: You're joining Apple's subscription system for Apple devices, a system that major magazine publishers have avoided so far because it keeps information on subscribers away from publishers unless those subscribers specifically tell Apple it's OK to share it. Don't you want to know who your paying digital customers are on the iPad and iPhone? Or is there a workaround here that gets you the data you need?
Ms. Robinson: We don't discuss our agreements with third parties, but I will say that we are going to part of iTunes by June 30 of this year.
We have every intention of owning our consumer information with a wide variety of distributors and devices, but, of course, that is subjected to the guidelines of those discussions with the individual distribution companies.
Ad Age: Beyond getting digital circulation revenue, is part of the plan here also to shore up the print product -- where, after all, advertisers pay much higher rates than they do online?
Ms. Robinson: The thinking behind this was really to create an additional revenue stream and really to make sure we were in a position to strengthen our ability to create high-value news and information and also to invest in digital innovation. From our perspective, we have a wonderful relationship with our home-delivery subscribers. We certainly want to reward them for their loyalty to our print experience, but we did this primarily to allow people to have a brand relationship with New York Times content across platforms and for a revenue steam to be created.
If there is a benefit in maintaining or building home-delivery subscriptions, that is clear advantage, but we did not do this with that specifically in mind. We were listening to our consumers who said clearly they were willing to pay for content online and wanted to receive that information across a variety of platforms.