Let's assume you're an avid reader of The New York Times and you're considering purchasing one of the new digital subscription plans to counter the paywall being implemented this afternoon. Let's also assume you're interested in maintaining access to The New York Times across all digital platforms - your computer, your smartphone, your tablet reader - as was the case prior to the paywall.
Given these assumptions, the All Digital Access Plan would meet your needs, providing you "unlimited access" to The New York Times across each of the aforementioned digital platforms. The cost of the All Digital Access Plan is $8.75 per week, or $455.00 per year.
Now let's take a look at the home delivery plans currently offered by The New York Times, all of which include the All Digital Access Plan at no additional cost. Specifically, let's focus on the Weekday (Monday-Friday) Home Delivery Plan, which has a regular subscription rate of $7.40 per week, or $384.80 per year.
Do you see the issue? You can either pay $455.00 per year as an All Digital Access Plan subscriber to The New York Times, or pay $70.00 less per year for the same All Digital Access Plan and weekday home delivery of the print newspaper. Thus, the question at hand: why would any rational consumer desiring full digital access to The New York Times ever subscribe to the All Digital Access Plan?
Moreover, the home delivery plans for The New York Times are consistently offered to new subscribers at a 50% reduced rate for the first 12 weeks for those paying with a credit card (the first 8 weeks for those paying by mail), therefore reducing the first annual cost of the Weekday Home Delivery Plan from $384.80 to $340.00 - or $115.00 less than the annual rate of the stand-alone All Digital Acess Plan. And if you're like me and actually prefer the Sunday edition of The New York Times to the weekday editions, the Sunday Only Home Delivery Plan is roughly the same rate as the Weekday Home Delivery Plan, and thus similarly cheaper than the All Digital Access Plan.
There are two caveats to this analysis worth mentioning, one minor and one of more importance. The minor caveat involves the home delivery rates, which appear to fluctuate based on the zip code of the home delivery address. The above calculations are based on my home zip code; interestingly, upon plugging in zip codes from various locations across the country, I never encountered home delivery rates that were significantly greater than my own and often found rates that were cheaper. The second, more important caveat involves the two other digital subscription plans available with The New York Times, namely The New York Times + Smartphone App Plan and The New York Times + Tablet App Plan, which cost $195.00 and $260.00 per year respectively. These two digital subscription rates are obviously cheaper than the home delivery rates I highlight above, and thus it's important to acknowledge the scope of this analysis is limited to comparing full digital access options for readers of The New York Times (as stipulated in the assumptions at the beginning of this post).
Of course, a side-by-side comparison of the three digital subscription plans being offered by The New York Times leads us to a secondary issue, which I would refer to as "app inflation." Setting aside the reality that comparable digital subscription services - including those offered by The Wall Street Journal, Netflix, and Sirius XM Radio, to name a few - tend to include access to all app-based platforms at no additional cost, The New York Times is valuing access to their tablet app at $65.00 more per year than access to their smartphone app, and valuing inclusive access to both their smartphone and tablet apps at $260.00 and $195.00 more per year than access to each of them individually. There's simply no way to characterize this kind of valuation as anything other than exorbitant.
I enjoy and respect The New York Times more than any other newspaper in the U.S., and that is precisely why the inherent irrationality of their digital subscription rates is so utterly disappointing. I'm willing to predict that by the end of this year The New York Times will significantly reduce these digital subscription rates, as well as alter their digital subscription model to eliminate the distinction between access to the smartphone app vs. access to the tablet app (possibly shifting to a more sensible model that differentiates between "computer-only" access vs. "computer + all app" access). At least I hope so, because I'm more than willing to pay for digital access to The New York Times. Just not in an irrational manner.
[UPDATE (03/28/11 - 5:28pm): The New York Times has posted an initial promotion for all three of the new digital subscription plans, which affords new subscribers their first four weeks of digital access for $0.99 total. Given my inclusion of the reduced promotional rates for the home delivery figures cited above, it seems equally important to factor in these reduced rates for the new digital subscription plans. Thus, the first year subscription rates for each of the digital subscription plans are as follows: The New York Times + Smartphone App Plan would be $180.99 for the first year; The New York Times + Tablet App Plan would be $240.99 for the first year; the All Digital Access Plan would be $420.99 for the first year. As you can see, these slight promotional reductions in the new digital subscription plans do little to change the calculus of the larger argument.]
