The NYTimes announced plans to charge readers on a metered basis. This revenue model has been working for the Financial Times. the first major publication to enable this revenue stream, for quite some time.
The numbers speak for themselves. In 2009, there was a 22% growth in subscribers and in 2010, FT forecasts online revenue will outstrip offline revenue. Granted there are only 121,000 subscribers; but at the base rate of about $3.58 per week, the FT is generating nearly $22M in annual recurring revenue, leaving behind a less predictable revenue stream, advertising. Additionally, as a result of having online accounts with their userbase, the FT have a new, more effective direct marketing channel with proprietary usage information about their users that they could use to target or sell on data exchanges like BlueKai to supplement revenue. As a result of this growing revenue stream (the only one in their portfolio), FT is launching new loyalty products and continuing to innovate.
Speaking more broadly, metered billing is a trend that seems to be taking hold. Over the next few years will likely appear in our mobile bills as Verizon has alluded, because the costs of subsidizing the buildout and operation of the network cannot be covered by today’s all you can eat plans, particurlary when usage is highly skewed: “Ericsson has estimated that data cards comprise 73 percent of traffic on a wireless network, which is amazing, given that they make up 3 percent of the subscriptions”. Outside the US, metered billing is ubiquitous, whether in mobile phone billing, internet billing or otherwise. I expect this trend to become more prominent to subsidize the costs of mobile and land networks, journalism, and many other businesses whose revenue models can no longer be sustained by all you can eat plans or advertising (which is a free all you can plan subsidized by advertisers).