The NY Times Is Putting Up a Paywall. So Why Are Subscriptions Being Given Away?

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A few days after the announcement that the NY Times would begin charging $3.75 to $8.75 a week for unlimited digital access to its content, a promotion is offering free subscriptions to some 200,000 readers. Why would the Times introduce a fee only to remove it a few days later for a huge chunk of readers? The answer may have something in common with the reasons why free cubes of cheese are handed out at the supermarket.

Yesterday, hundreds of thousands of NY Times’ readers received an e-mail offer from the Times and its advertising partner, Lincoln. The message stated:

Though NYTimes.com will soon begin charging for unlimited access*, Lincoln is offering you a free digital subscription for the remainder of 2011. Enjoy all that NYTimes.com has to offer every day — investigative news and special reports, videos, blogs and more. It’s all yours at no charge, compliments of Lincoln.

A post at the BusinessInsider declared this partnership “super smart”:

The NYT gets its access fee without losing readers and Lincoln gets to target a specific demographic (that apparently does not include this “frequent” New York Times reader) and brand itself as a responsible company interested in news. Win-win-win.

Except that the Times doesn’t get its access fee. At least not directly. Dow Jones Newswire reports that Lincoln is not going to be paying for the subscriptions of those accepting the offer. Instead, Lincoln will be increasing its online advertising with the Times. The Dow Jones story frames the Lincoln-Times offer as something of a stall technique for consumer and newspaper alike:

Lincoln’s offer will help a subset of avid Times readers delay the question of whether they should pay for a digital subscription to the newspaper at a time when consumers are flooded with an array of options for free online news content.

Here’s one more theory. The free offer could be seen a way for the Times (and Lincoln, I suppose) to make nice with readers after lowering the boom. If the Times had announced the freebie at the same time it introduced the paywall, the offer could have been overlooked or caused confusion. Or—and this step is essential—the reality of a paywall might not have set in at all. As things progressed, readers have had a few days to mull over and perhaps get a bit agitated by the new subscription costs. Just as the reality of a paywall is setting in, and readers are either preparing themselves to cough up some cash or annoyingly get their news elsewhere, the Times and Lincoln get to swoop in and seem like a couple of generous grandparents treating the kids to ice cream.

What’s more, there’s some likelihood that readers who take up the offer may somehow feel indebted to the Times for its benevolence. Freebies have been demonstrated to hold amazing power over consumer behavior. A psychology professor, discussing freebies at the supermarket or department-store makeup counter, explained that consumers are far more likely to buy stuff after they’ve been given a free sample:

Why does this work? You’ve been given something, seemingly for nothing, and now you feel obligated to reciprocate by buying the item.

In the same way, readers who’ve been given the Times may be more inclined to pay for an online subscription down the line. They may feel like they owe the Times something after receiving access for free through the end of 2011—by which time, the idea that everyone used to get digital access to the Times entirely for free might be a distant memory. The thought that the Times and Lincoln have been paying for your content will be much fresher in your mind.

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