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New York Times: Doomed Like the Rest

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Fact: Paywalls are a bad idea. Nevertheless, the New York Times is forging ahead undeterred.

Women the world over have heard infinite variations of this timeless proverb: "Why buy the cow when you can get the milk for free?" Now, I'd be hard-pressed to adequately compare online news coverage with sexual intimacy, but nevertheless, the metaphor still applies.

Why would anyone pay for online news when there are countless other outlets providing coverage -- ranging from adequate to transcendent -- for absolutely free?

Time and time again, we see the results of online newspapers erecting paywalls.

A year ago, my colleague Justin Rohrlich reported on the subscriber rate for the Long Island daily Newsday after charging five dollars a week for content.

The result: 35 people signed up.

Granted, that's a smaller paper with a circulation of roughly 400,000 on weekdays. But the bigger names felt the effects, too. News Corp. saw its subscriber rate plummet after putting up paywalls for the Times and Sunday Times of London -- going from 3 million readers per month to just over 26,000, according to VatorNews. Experts also believed even those dismal figures were rearranged and inflated and inside sources claimed the paywalls have created "an empty world."

And yet, the New York Times apparently believes it will be the exception to the rule.

Bloomberg writes that the Times will begin charging $20 a month for full access to its site. That's on par with the cost for access on Amazon's Kindle, but news access is considered a premium on the e-reader. On a laptop -- where free news access is practically limitless -- it's a different story.

Even the currently free iPad app will see the subscription fee. And considering the software was plagued with bugs, a paywall won't help its appeal in the least.

Not only is this a phenomenally bad idea that has proven to be many newspapers' ruin, the Times has witnessed the experiment fail firsthand. Its TimesSelect section put several columns behind a paywall in 2005 and came crashing down in 2007. And that was only for $7.95/month.

Already, experts are placing bets as to how long this paywall experiment will last. Some believe it won't ever see 2012.

The paywall, not the paper.

Although, I see how that could be confusing.
POSITION:  No positions in stocks mentioned.