Apple Gets Its First Big Publisher: New York Times Subscriptions Will Be Sold Through iTunes

March 17, 2011 at 7:55 am PT

The New York Times has finally unveiled its paywall plans, a year-plus in the making.

And with the Times’ announcement, Steve Jobs gets his first big publisher to announce it is signing on with his new subscription plan: The Times says it will sell access to the paper’s apps through iTunes, on Jobs’ new terms.

That means that the Times will give up 30 percent of every subscription it sells through Apple. And the Times will also lose access to valuable subscriber data for those sales, too. But clearly the Times has decided that it’s better to work with Steve Jobs than to ignore altogether the market he’s created.

That doesn’t mean that subscribers who want access to the Times on their iPad or iPhone have to buy access through iTunes, just that they can. And that the Times will comply with Apple’s new rules for any of those sales.

The Times says its paywall packages will also work with Google’s Android platform, as well as Research In Motion’s Blackberry. But the Times won’t be selling subscriptions through Android or Blackberry app stores, says spokesperson Eileen Murphy; the only two places to buy access to the paper will be through its site, using its e-commerce engine, and via Apple.

As for the packages themselves: As predicted, they hover around the $20-a-month mark, starting at $15 a month for Web + phone access, up to $35 a month for all-you-can-eat on every platform.

Crucially, the plan gives free access to all platforms for subscribers who get the Times delivered, in paper and ink format, to their homes. Those subscribers, for now, are the papers’ most treasured resource, and it wants to hang on to them for as long as it can.

Not coincidentally, the cheapest way to get the most access to the paper continues to be a print subscription, at least for new subscribers, and at least for now. (Thanks for the reminder, Ari Weinberg)

While the Times all-access digital plan is $35 a month, new subscribers in the New York area can get a print subscription–along with full digital access, for about $25.35 a month. That price goes up outside of New York, but there’s still a discount. In Minneapolis and Los Angeles, for instance, new print subscribers will pay $32 a month.

The Times will put up its paywall in 11 days, on March 28th. It promises to comply with Apple’s subscription terms by making “1-click purchase available in the App Store by June 30 to ensure that readers can continue to access Times apps on Apple devices.”

And as previously announced, this isn’t a formal payall. Or, at least, it’s a porous one.

Anyone can use the Times’ Web site to read up to 20 articles a month for free. And if you’ve surpassed your monthly limit, you’ll still be able to read Times articles if you’ve been sent there from referring sites like Facebook, Twitter or anywhere else on the Web. The Times says it will place a five-article-per-day limit on Google referrals, however; it’s currently the only search engine with that limit, Murphy says.

To spell that out: If you want to game the Times’ paywall, just use Microsoft’s Bing. For now, at least.

Tagged with: advertising, Android, Apple, Blackberry, blogs, Facebook, Google, Internet, iPad, iPhone, iTunes, MediaMemo, New York Times, paywalls, Peter Kafka, Research In Motion, software, Steve Jobs, subscriptions, Twitter

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Anonymous

I love reading the NYT but this is crazy. Why do we have to pay twice for an iPhone app and an iPad app, especially when it seems that they have put little thought into the design of it? As is, the iPad version doesn’t nearly have as much content as the site itself.
http://www.facebook.com/ozzyperez Ozzy Perez

hasn’t the wsj been available on the ipad for sometime.
http://mediamemo.allthingsd.com/ PKafka

Yup. And others, too. But in June, anyone who wants to sell access to *new* subscriptions to iPad apps will have to do so via iTunes *in addition* to their own sites.
http://betterness.net/ kawika

I imagine the publishers would give anything for a Hot Tub Time Machine so they could charge for site access from day one rather than serve up this hot mess. It will be interesting to see who gives in, who gives up, and whether the numbers do anything to roll back the tide.
Anonymous

Good investigative journalism is expensive and under fierce competition from tabloid (sensationalist) journalism. Unfortunately, the latter seems to be favored by the masses.

Apple’s 30% take seems excessive for periodicals… maybe others agree and will subscribe directly via the Times’ website rather than iTunes.
Anonymous

Oh wow, should be interesting to see how that turns out.

http://www.anon-tools.es.tc
Anonymous

feel sad for new york times, they seem to think ipad will save them and are willing to pay a cut to Apple believing the hype.
Anonymous

So according to you, it is better for the NY Times to earn zero from about the most desirable customers out there, the 20 million or so iPad owners and 200 million iPhone/iPod Touch owners and push them away from the Times and towards other news apps readily available on the iPad/iOS? Just so they don’t give Apple 30% for *new* iOS subscribers?

Smart thinking…
Anonymous

I was talking from a different angle, whether nytimes has an ipad subscription or not, they are not going to thrive, their cost structures are set up for the pre-internet era. It is a worthwhile experiment, but IMO it is going to fail. Doesn’t hurt to try I suppose.
Anonymous

Apple’s payment system is in over 100 countries that never had a way to subscribe to a paper NY Times. The paper and ink and delivery costs of the paper times were over 70%. So with Apple’s system, NY Times gets a much broader subscriber base and keeps the fat end of a 70/30 split. In other words, NY Times will make more money with Apple than without.

Remember Apple is not competing with or replacing the Web, they are competing with and replacing paper. The NY Times had the Web alongside paper, and still has the Web alongside iPad.

Also, it is 15 years since the Internet went mainstream and paper journalism still hasn’t figured out how to make money without paper. Apple is the only one who built an alternative to paper. If the NY Times could have done better without it, they would already have done better.

So 30% is cheap for something that dramatically increases your potential subscriber base both in terms of users and countries, replaces the part of your business that has been dying for 15 years with a new sustainable business where you keep more revenue per customer, and has no competition.

NY Times has 800,000 subscribers and falling, while Apple has 200,000,000 subscribers and growing fast. NY Times paying Apple 30% when Apple converts an iTunes subscriber into a NY Times subscriber is CHEAP.

And finally, notice that many of the people who subscribe to NY Times through iTunes would not have done so otherwise. With Mac App Store, where users can often buy the same app from Apple or from the original developer on the Web, we see a different audience, and an increase in app sales overall, not competition between the two.
Anonymous

Paper and ink and delivery are 70% of NY Times costs, while iPad delivery is 30%, so NY Times makes more money with Apple than with paper.

Apple is not replacing a Web edition of the NY Times, they are replacing the paper edition. You may be right that NY Times cannot make enough money on the Web to survive. In which case, you prove that they must replace their 800,000 paper subscribers with an equivalently profitable set of iTunes subscribers, which would be a smaller set since they make more money per iPad subscriber. That should be very possible since Apple has over 200 million iTunes subscribers. Even if you only look at the nascent iPad user base alone, it is over 30 times larger than NY Times subscriber base, and will be over 100 times larger by the end of 2011. Even if NY Times were only keeping 30%, same as what they make for the paper edition, their Apple deal could be a windfall. Keeping 70% means they only have to execute. Create a compelling iPad edition that takes advantage of its advanced user interface. Maintain timely coverage. They will have an opportunity to fix their journalistic standards, which have fallen into disrepair over the past decade while they cut staff and were unsure of their future. For example, their pro-US propaganda (e.g. description of water boarding as torture only when involving non-US perpetrators) has to be replaced with truthful unbiased coverage, and their corrections have to happen much more quickly and honestly (e.g. they fell for James O’Keefe’s ACORN con but refused to admit it for months, helping to perpetrate the con.) Maybe they can hire better management people now that journalism has a business plan again.
Anonymous

why would an European IPhone or Ipad owner buy a subscription to new york times ? and people are now used to the shallow content of the web which includes mediamemo, huffington post, business insider etc which is free. Thats the reason why nytimes subscriber number is falling and those shallow newssites are growing fast.
https://profiles.google.com/robpez/about Robert Lopez

Publishers are completely out to lunch. Digital media subscriptions SHOULD be priced MUCH lower than their print edition. Even taking into account Apple’s cut.

Charging high subscription fees is counterproductive for them. The publishing industry makes it’s money from advertising based on high subscriber numbers. One would think that they would want as many subscribers as possible for the lowest subscription fee possible. Why not even FREE? They give away print subscriptions why not digital where it costs them so much less to produce??

Until the prices become reasonable I discourage anybody from signing up to these kinds of services.
https://profiles.google.com/robpez/about Robert Lopez

Yes iPad has the potential to save them. It is the single biggest promoter of paid content.

As I stated above their pricing model is too greedy. They have not realized that this is a brand new distribution model which is TOTALY different than anything that came before.
Anonymous

a quick yahoo finance check shows new york times is making 2.2 billion dollars per year, so let us assume new york times snags 5 million subscribers and let us assume new york times will charge 100 dollars per year, their 350 dollar per year plan will backfire, so let us assume they cut the price to 100 dollars, so 5 million * 100 will give them only 500 million dollars per year and this is a pretty optimistic case scenario. With just 5 million users, you cannot build advertising scale and while tablets are bringing in new subscribers, their existing paper subscribers log out. So even in the best case scenario, they will still need to depend on advertising from the free web for the reminder of their revenues, Ipad scale simply does not cut it.
Anonymous

Sounds pretty bad on the face of it. How will sports fans react, for instance? Leave en masse and check out competition, probably. They should’ve added value, not restricted it. But at least it’s a brave experiment.
https://profiles.google.com/robpez/about Robert Lopez

I think you are severely underestimating the number of subscribers.

What do you think advertisers are willing to pay for extremely targeted, high return advertising with 1click purchasing on a very desirable market segment? I believe the iAd platform will play a huge role in the new revenue stream for publishers.
Anonymous

5 million is huge, especially as someone noted above, new york times currently has only 800K numbers. And why would advertisers pay high price for new york times, the people who read new york times will most likely be searching on google or networking on facebook, twitter, yotube, it is far more cost effective to target a high networth individual while on google or facebook than in new york times.
http://twitter.com/lemieuxd David Lemieux

I simply don’t like getting a paper at my door (not in my weather anyway). I rarely read the paper version. I find a computer a less than ideal way to read such news as well. The iPad (or any GOOD tablet) would be a welcome improvement. I am not from the states but would strongly wish to sign up (at a reasonable cost) to the New York Times, WSJ, The Economist and other papers. Including my local Montreal Gazette. Apple has just made it easy to decide on signing up to paper from around the world. My wife would probably want to sign up to a paper from Mexico City… or San Luis Potosi.

Apple Gets Its First Big Publisher: New York Times Subscriptions Will Be Sold Through iTunes

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