Virtually every letter to readers justifying a paywall and industry quote from publishers talk about The New York Times metered model. When you have 33 million unique monthly visitors and high value content that model almost works. The Times has been very vocal about saying that it is a holistic digital strategy that focuses on all their digital platforms. Even at 390,000 digital subscribers they understand that they have a way to go to close the revenue gap and create a sustainable business model. I’ve been in meetings where NYT executives caution that what works for The Times rarely works anywhere else.
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Here in Southern California, it’s hard to find the L.A.Times for sale. Many newspaper racks (boxes) have been removed. So if I want to read the Times I have to do it on-line. No more multiple quarters dropped into the coin slot. Without these quarters how do they make the money needed to support their Free on-line edition. Yeah, I know about advertising, but I don’t see the ads on-line, just in the printed edition which I can’t find for sale anymore. Meh.
“Even at 390,000 digital subscribers they understand that they have a way to go to close the revenue gap and create a sustainable business model.”
No and No. First off they have 450k subscribers per their last release a couple weeks ago. Secondly, if you look at the segmental earnings, the NYT paper as a stand-alone is now growing revenues and has been for 6 months. The entire company (NYT, BG, About.com, Florida Papers) is losing revenue, but as a stand alone, the NYT is now growing revs.
I’m very happy that the NYTimes has managed to nab almost 500,000 digital subscribers as of today. I’m also optimistic in that they’ve managed to create a revenue stream that would (assuming everything goes well) allow them to grow. However, I do think the point still stands; and that point is “what works for The Times rarely works anywhere else.”.
I agree.
So what’s the answer? Micropayments? Donations? Non-profit? It’s so easy to tell newspapers how they should do business but no one seems to have any solid strategies for keeping them in business.
Sadly one of the “answers” has been crowd-sourcing content. The idea, a false one, is that reducing labor expenses can make businesses more “competitive”. At some point with zero labor expense, content contributors remove themselves from the economy due to a lack of spending power. Unfortunately, as seen by Huffington Post and a few others, there appears to be “value” in not paying for content.
I think the real answer is making a connection between the news and the content. We get information instantly now, because we are always connected. Even Twitter can give us a preview of something we might watch on the news. So what’s missing is not news reporting, but news analysis. The draw is not really the writing, despite the NYTimes example. The writing will keep people coming back, but to attract new people there is an increasingly important need for images. I don’t think crowd-sourcing and stock libraries can accomplish that. Obviously the flood of readily available information is overloading at times, making it seem that sometimes everyone has A.D.D.
To pay for that content will require advertisers to make a small leap of faith that people reading news will notice their advertising. The industry can probably help with this, if they can provide studies showing effectiveness. It’s too easy now to lure advertising to quantifiable information, like page views or click-through-rates, despite that these have an extremely low effectiveness. Craigslist destroyed small classified ads, so now companies must be lured towards news agencies. Otherwise we may end up with a handful of national news outlets, and each smaller area only acting as distribution for the remaining large news brands.
Ad revenue is a tricky sale. Honestly, how many people read the right hand side of this page as you were reading Rob’s post and scanning the comments? Most of us have been intuitively trained to ignore the right hand side of webpages. Thats why advertisers are going to insist on “forced to watch” video and click through image ads prior to viewing online digital content. (Hmm now that I think about it, maybe I should take that Final Cut Pro class….)
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