The LA Times once called the La Daily Times has a history of making profound statements across the country. The Pulitzer Prize winning paper was started in 1881, and continues to strive for excellence. The paper was one of the first news agencies that owned a radio station in LA County, and continues to break out of the traditional media mold.
The LA Times has joined several other newspapers announcing that it will now join the groups of online media moguls that use a paywall. The LA Times will charge members a whopping 3.99 per month increasing its revenue in hopes to gain the predicted numbers that the Gannett media group is reporting, 100 million dollars by 2013. LA Times Media Group’s President and Chief Operating Officer discusses the reason for the change, “We want to be able to serve customers when they want the news and where they want it,” said Kathy Thomson (Thomson 1).
In a recent article in the LA Times, Jerry Hirsch reports on how the Times and Thomson are handling the online transition and the printed version of the paper, “After the 99 cents for the first four weeks, the rate will rise to $1.99 a week in a package that also includes the Sunday newspaper. Digital-only access will cost $3.99 a week. The Times priced the digital subscription with the Sunday newspaper at a lower rate because they are complementary products, Thomson said. The Sunday edition of the Times has the most advertising and readership, making that the company’s most profitable publication day. Although digital payment plans are commonly known as ‘paywalls,’ The Times is billing its plan as a ‘membership program’ that will include retail discounts, deals and giveaways, as well as access to digital news” (Hirsch 1).
The Times will be trying to entice customers with the retail discount aspect that has made Sunday papers popular. Many people buy the Sunday paper still to clip coupons, and try to save money in a throttled economy, and the LA Times is playing on that mentality by offering discounts in its digital paywall version of the paper. Kathleen Miles of the Huffington Post discusses a breakdown of how the LA Times will charge its readers for the online subscription,
“Would you pay to read the Los Angeles Times online? The paper announced Friday that it will charge for digital access starting Mar. 5.
Here’s how it will work, as The Wrap first reported:
~ 15 online articles each month: free
~ First month of online subscription: 99 cents/month
~ After first month, online subscription: $3.99/week
~ Print plus online subscription (plus Sunday paper): $1.99/week
The paper will also stop printing its Health, Food and Home sections and instead deliver a new lifestyle section on Saturdays, the Times explains. The Health, Food and Home sections will remain online. The paper also clarified that, if you are already a home deliver subscriber, you will not have to pay for online access to articles” (Miles 1).
Before the LA Times decided to move into the paywall system it did not charge users to access its information online, but the service will be free if users receive a subscription to the newspaper in print. The way in which the Times is approaching its paywall system is to continue to encourage readers who buy the actual paper to migrate into the online version, but it also doesn’t complete isolate the digital users either by having a monthly charge.
The strength of the LA Times paywall will be the boost in sales of both the digital version of the paper and the paper itself. By giving users the option to pay monthly for the digital copy or receive the digital version of the paper free with a paid subscription to the paper version of the news the Times has ensured itself a profit.
In addition to profitability, the Times will reduce cost by scaling down the printed paper removing certain sections form its normal publication. The removal of these printed articles will not discontinue, as they will be offered in the digital edition of the paper. By allowing readers to only access some of the more popular aspects of the paper online the Times pushes readers toward its paywall.
Yet another strength the Times has given itself via the paywall is adding retail discounts to the digital version. The appeal of coupons and discount programs will reach many savvy shoppers who will opt in for this part of the paper simply to save money in a poor economy. This strength will give the paywall the opportunity to reach far more users than just “coupon clippers” in a world where shoppers thrive on Groupon and other social media discount services.
While the paywall model seems like a great success, the Times may find like many other papers that have moved in the paywall direction that it contains a resounding weakness. Many readers will balk at paying a subscription or membership fee and will simply use social media or other online forums to find their news. Adept Google users and Internet lovers will simply search other free news sites to find the information they are looking for which is a consistent downfall to all paywall structures.
The pricing structure of the paper may also present a great weakness in its paywall option. The paper is priced at similar prices as that of The New York Times and The Wall Street Journal. While the paper is a competitor of both publications many users may not feel it is worth the price of these iconic publications.
The LA Times is trying to stay competitive with these online news resources as well as others like Google, Yahoo, and not to mention numerous news and informational blogs. The Internet and social media are the main source of almost all news agencies in this Digital Age, and the LA Times will be hard pressed to keep up using its new paywall business model. While the new paywall model is in its infancy it remains to be seen whether or not this new price structure will help or hinder a struggling media mogul.
Hirsch, Jerry . “Los Angeles Times Launches New Membership Program.” Los Angeles Times. Los Angeles Times, 24 Feb. 2012. Web. 26 Feb. 2012. <http://articles.latimes.com/2012/feb/24/business/la-fiw-times-20120224>.
Miles, Kathleen. “LA Times Paywall Announced: Online Access Will Cost $3.99/Week.”The Huffington Post. TheHuffingtonPost.com, 24 Feb. 2012. Web. 26 Feb. 2012. <http://www.huffingtonpost.com/2012/02/24/la-times-paywall_n_1299997.html>.
“The Times’ 128-year History.” Los Angeles Times. Los Angeles Times. Web. 26 Feb. 2012. <http://www.latimes.com/about/mediagroup/la-mediacenter-milestones,0,1502162.story>.