COMMENTARY: Dear New York Times… Are you guys high?

I ran on the New York Times Reader the other day on my Windows Vista laptop. 

I was greeted with a message that said:
The NYTimes Reader beta is ending at the end of March" and at which point it would no longer be free.

Okay.  I’m a capitalist in every sense of the word and I’m also a salesperson.  I can respect the need to make some money on the development of their reader.  Paying for a copy of the NYTimes Reader makes sense to me.  So I read on.

It then said, after March 31st, the usage of the NYTimes Reader would be a subscription fee.

Huh?  Wait.  A subscription fee for the software and New York Times’ content?  I mean, it’s not like the software actually revises & evolves much at all, nor do they have a massive dev team working on it.  In fact, during the beta it never really changed one bit.  All it was was a cleartype reader that downloaded XML data from their news site – information that was free anyway through  Okay, whatever.  As long as it’s not that big a deal, fine.  I’ll pay it.  After all, they’re clearly compensating for the elimination of advertising and that’s certainly worth a few bucks.

It went on to say, that the subscription fee would be $14.95 a month.

WTF?!?  $14.95/month?  Are you guys at NYTimes high?  That’s $180 a year!  I might as well have the damned newspaper physically delivered everyday First Class mail to my house for that rate, which I most certainly won’t do.  There’s more than adequate sources of news on the Internet, including NYTIMES.COM, much less LATIMES.COM and other sites.  The cost of delivery 365 days a year for physical copies of the NYTimes is $320!

Existing NYTimes subscribers get to use the Reader for free.

Well, damn I hope so because at $180, that’s just highway robbery and if you planned on charging existing subscribers that same fee, I might want to go an throw tomatoes at your building just for being stupid.

To put this into perspective, WINDOWS VISTA ITSELF COSTS $180 for our a brand new copy of, "Home Basic", and an upgrade of our top-of-the-line product, "Home Premium" is $180 as well.

Oh the irony:  The cost of a stupid Reader is the same cost as the actual PC operating system that’s required to use it.

And let’s be clear here folks before anyone thinks that they "went through hell and back again" to create this reader:  The New York Times didn’t develop this reader anywhere nearly on their own.  It’s my understanding that Microsoft provided the basic structure of the reader along with Microsoft-funded partner assistance and provided a ton of integration work & technical support as well.  I’ve even heard that it was our partners & creative folks that provided the clean interface look and feel that the reader is known for.  And I won’t lie to you:  We used this reader as a case study & a reference application… look at the power of Windows Vista… NYTimes has made a great tool through it.

And now the New York Times wants to charge an ungodly amount of money for it.  Are you kidding me?  I understand that it doesn’t have advertising and as a result there has to be some compensation for NYTime’s product – the news doesn’t get written about for free.  But there’s just NO WAY as a casual reader I or anyone I know is going to buy this thing on it’s own at half the price of a real subscription.  If you really want the New York Times, you’ll get it delivered and get the reader for free.

And that’s a shame.  Because while I respect the effort put into the NYTime Reader, I respect the partnership between Microsoft & the New York Times, and I respect the value of their news product, setting a value on their content that is 50% of their normal subscription rate for content that is wholly available for free (albeit with ads) on the web is simply ludicrous.

The removal of advertising from NYTimes news content, plus the new user interface for the reader is simply not worth $180/year.

Maybe I was misguided and presumed too much. 

I thought the folks at the NYTimes would have been smart enough to understand the role the Internet has in growing volume, while lowering prices.  Usually when companies provide tools on the web to access traditionally physical based information or products, it’s to expand their readership, grow their marketshare, or market their brand name – not reinforce their existing installed customer base and reinforce their existing price structure.

At Microsoft, we’ve consistently maintained the same price across our consumer Windows product for example:  $99 for upgrades, $180 for full versions.  It’s grown 5 fold in features, it’s increased its support for platforms, it’s dramatically improved its speed, stability, and security, and it’s remained at the same price.  Why?  Because our volumes grow and we develop other products to sell in addition to Windows.  And that’s how Microsoft grows it’s revenue.  High volume, low cost, increased product set.

So how is this different from NYTimes wanting to "improve the existing feature set" of their subscription paper product?  One big difference:  Microsoft has a natural monopoly on PC operating systems.  Growing our customer base beyond 5% a year is just not possible and overall, it’s most certainly not a growth area for us, whereas the NYTimes has primarily New York as a current customer base… they still have the other 49 states to cover and grow into.

I suppose one could make the claim that they did expand their readership through the Beta:  They expanded the awareness people had of their publication, the balance of the writing, and the overall quality of the product.

And while I respect their right to set whatever price they want on their product, to then say to all these casual users:  Now you have to pay an ridiculous fee for the same thing you were getting free  on the web, the same content you were getting free through the beta, and at 50% of the price of the physical medium… folks, that’s just unreasonable.  Unreasonable on a level similar to the kicking and screaming that music publishers have around DRM.  And we all know what’s happened to them since then: 70% drop in music purchases, 90% of all music used is pirated, the majority of MP3s are legitimate rips from existing CDs and Tower Records went out of business.

Imagine in the same vein, someone producing a utility that simply robotically screen scrapes the NYTimes based on it’s existing layout and provided a similar look-and-feel to what the reader does.  It’s very much possible and it wouldn’t require a $14.95/month subscription to use.

Maybe the NYTimes will come around in 6 months or so when usage of the Reader is dead… except for their existing customer base which might use it for free but since they get the paper version, it’s arguable they’ll use it regularly.  They’ll declare the software a failure and that "there wasn’t any demand for the product".  Those that had been following the evolution of the Reader will call the NYTimes idiots knowing that the $180/year price tag was obviously the real adoption blocker, at which point they might even decide to lower the price of the tool.

But until then, I’m saddened by your approach, NYTimes.  You guys had the world’s focus and all the marketing associated with Windows Vista.  You had a great tool at your disposal and a competitive edge over other mediums and right now you’re just throwing it all away.

p.s.  Forbes Magazine’s Windows Vista Reader for their web content remains free.  Also Seattle Post-Intelligencer’s Windows Vista Reader for their web content also remains free.  Both are created by Identity Mine – a 3rd party Reader development company.

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