Living in New York and living off the New York Times, I’m plagued by regular pangs of anxiety for the publication. Although the high-quality ‘paper’ is unique in having dedicated and widespread readership, the NYT is in the same creeky, cash-strapped boat as all traditional publications (no newsflash here). The recent announcement about plans to charge for frequent access would in theory monetize its devoted readers’ dependence; however, banking on what readers say they would do in 2011 does not necessarily translate into action.
Looking back a few years to NYT Select, it seems that some readers were indeed willing to pay, and yet the losses from online advertising outweighed the increased subscription revenues:
The move [closing down TimesSelect] comes two years to the day after The Times began the subscription program, TimesSelect, which has charged $49.95 a year, or $7.95 a month, for online access to the work of its columnists and to the newspaper’s archives. TimesSelect has been free to print subscribers to The Times and to some students and educators.
The Times said the project had met expectations, drawing 227,000 paying subscribers — out of 787,000 over all — and generating about $10 million a year in revenue.
“But our projections for growth on that paid subscriber base were low, compared to the growth of online advertising,” said Vivian L. Schiller, senior vice president and general manager of the site, NYTimes.com.
What changed, The Times said, was that many more readers started coming to the site from search engines and links on other sites instead of coming directly to NYTimes.com. These indirect readers, unable to get access to articles behind the pay wall and less likely to pay subscription fees than the more loyal direct users, were seen as opportunities for more page views and increased advertising revenue.
The new plan hopes to capitalize on both ad revenues and paid readership, according to the publication’s execs:
The metered model differs from TimesSelect in that it is for the entire site, not just the columnists and archives. TimesSelect grew to 227,000 paying subscribers, but we decided to take down the wall because search was becoming a bigger factor and advertising was more robust. We expect the new metered model to capture both –- allow us to remain a vibrant part of the search-driven ecosystem of the Web, and give us the flexibility to preserve our successful advertising business.
The 2011 “metered model” is promising. It mirrors that of Pandora’s music site, which successfully charges users a nominal fee after listening to a certain number of songs (99 cents for the rest of the month after 40 hours, or $36 unlimited per year). The question remains, though, whether readers would rather turn elsewhere for the end of the month’s news – or even remained uninformed until the first of the next month – rather than having to pay the fee. Will diminishing returns to Kristof, the Economix blog and the Style section kick in after the third week?
As we wait for the ticking clock of fate to strike, I remain restless with the lack of innovation in the space. The reliance on traditional pricing models for such a dynamic space is counter-intuitive at best. Apple, Google and others are working on ways to revive the dying breed, and perhaps they will save news just as the iStore saved music, for now. Until then, though, here are a few half-baked ideas that I encourage anyone in the news industry with the time and resources to poach.
If you believe a reader will pay for news…
…forget one-time micropayments. And forget about your publication’s brand for that matter. Imagine “Google Press Room” or “__[Your name here]__ Press Room,” a place where you can aggregate all your favorite publications, peek at those of your friends or of official ‘curators,’ and access articles / full sites with one click. Set up your Pay Pal account with a pre-paid lump-sum (a la Skype), or pay as you go, and read articles at your leisure without having to take more time to pay 25 cents for one story than it would take you to read the whole thing. Subscriptions to sites could come at a cheaper rate, and you could even feed blogs to mix and match paid and unpaid content. This model is predicated on some thorny factors, like publication buy-in and the development of a trusted host site. It also depends on having an interface that is easier to navigate than my haphazard iGoogle page. But with this model, you would capture those users who are willing to pay but don’t want to have to be reminded of the ding to the wallet with each click. Given our recent lessons from the credit crisis — namely that Americans love to buy now, pay later — this seems right up our alley.
If you believe a reader will pay for your brand…
…why be limited to news articles? And I am not insinuating that a publication just tack on video or forums. Newspapers or publications that are lucky enough to have a strong brand presence (NYT, Economist, Wall Street Journal, and a few others) are likely losing big bucks in not having a diversified offering. The Economist is probably a leader in monetizing its name: conferences, lectures, syndicated publications by the Intelligence Unit, research reports, books, etc. Although I am not familiar with the financials or the scale, it seems that publications with strong journalists and big names could leverage their great work across other platforms. This becomes increasingly exciting when you start to think about regional publications: NYT-sponsored culture, food, wine, style, politics events. Columnist lectures. Membership (or subscriber) benefits that extend beyond text. Time Out New York is another great example of innovation in this space, perhaps made easier by a more niche audience.
If you think a reader will never be willing to pay…
…you might be right. However, those readers won’t have a choice but to view ads alongside the article. It is also becoming increasingly clear that those readers will have to share their information at some level, enabling ads to become more targeted. On top of ad revenue from behavioral targeting, what about the readers who like to tweet or email or digg or delicious their interesting finds? Why not reward the evangelists for sharing the read with friends? And the more the better, since from the newspaper’s standpoint, it means they have more readers, more data and better ads. Successfully monetizing the network effects of information sharing remains uncharted ground to my knowledge. If the 350+ million users on the country that is Facebook have taught us anything – with users posting 55 million updates a day and sharing more than 3.5 billion pieces of content every week – perhaps it’s a sign that when something is interesting, people are willing to share, even if they are unwilling to pay. Time to bank on our current behaviors before trying to change them.
Regardless of the outcome, I can only hope that someone gets it right, and soon. Otherwise, we might be subjected to an endless clusterbomb of noise and citizen-journalism, including the unfiltered rantings of yours truly.