Mon

Sep 17
2007

Jimmy Guterman

Jimmy Guterman

Will Anyone Pay for a Newspaper Online?

Earlier today, The New York Times Company validated several weeks of rumors and, as reported on our sibling publishing blog, announced that its TimesSelect experiment is over. Starting midnight tomorrow night, all content on the NYTimes.com site will be available for free. The Windows-only TimesReader client will still require a paid subscription (hey, it's Windows; it can't be free), as will a premium crossword puzzle service. This is part of a larger strategic decision at the company, it appears: the announcement comes just under three weeks after the company announced this it was also closing down its TimesPoints loyalty program. Archives going back to 1987 are now free, as well. (Pre-1922 archives are in the public domain.)

As you'd suspect, public statements by Times Company officials are spinning this as a positive. As the site's general manager told paidContent's Staci Kramer, "It did work. It’s just a matter of as compared to what.” In other words, what we were doing was so successful that we're now going to stop doing it and start doing something else. It reminds me of Senator George Aiken's advice to President Lyndon Johnson during the Vietnam War: declare victory and change your strategy.

The TimesSelect strategy, which lasted two years, was puzzling. The idea of getting individuals to pay for newspaper content was worth a shot: the only other national paper that succeeded at it was -- and continues to be -- The Wall Street Journal. But by what reasoning did Times officials decide that its opinion pages were the very ones worth paying for? People pay to read something that will entertain, inform, and -- very important -- surprise them. But the last place in the Times where you'll be surprised is on the op-ed page. Do you really have any question what Paul Krugman or Frank Rich think of the Bush administration's latest move? Their analyses may be authoritative and nuanced, but they're never a surprise. Even worse, most if not all of the Times op-ed columns were syndicated to other print newspapers and, hence, available without charge on the websites of at least some of those other newspapers.

To be fair, the decision at the Times may make long-term sense. In his post, Radarite Andrew Savikas likens it to the final Kubler-Ross stage: acceptance. There is a general feeling around top offices at newspapers that online advertising is what will save them. It's been widely reported that even The Wall Street Journal is considering going free online. The Times's own coverage spells out the business reason for the change: "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 gain 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." In other words, Google made 'em do it.

It's going to be a tough haul for American newspapers moving forward, even marquee papers like the Times and Journal. Those of us who depend on newspaper content for information, entertainment, and help in decision-making hope they will succeed, in whatever form. It's too late to be sentimental and moan about the eventual death of the print version of those two great newspapers. (Oh, I know the print versions will stick around. But they will be multi-dollar semi-luxury products, like Starbucks drinks.) What is worth worrying about, though, is that the Times and perhaps soon the Journal have decided that, on their eventual primary platform, their customers aren't willing to pay enough to make it worth charging them. More than readership, advertising comes in cycles. When there is an Internet advertising dip -- however mild, however brief -- what will happen to the publications that will be close to 100-percent dependent on advertising? Doesn't anyone who runs a great American newspaper think newspaper content is worth paying for anymore?


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Comments: 28

  John WIredland [09.17.07 08:17 PM]

It depends on the focus and coverage of the newspapers.

Like WSJ, one can read in-depth business coverages across the globe and it worths paying.

For China watchers, you need to subscribe South China Morning Post which provides updates on political and economical development in China.

My $0.02

  John WIredland [09.18.07 01:08 AM]

It depends on the focus and coverage of the newspapers.

Like WSJ, one can read in-depth business coverages across the globe and it worths paying.

For China watchers, you need to subscribe South China Morning Post which provides updates on political and economical development in China.

My $0.02

  Sachin [09.18.07 02:48 AM]

Subscription and advertising are two ways of earning revenues for print publications. They are not necessarily exclusive. All newspapers sell for a certain amount but that isn't usually enough for the production and distribution costs. The advertisers foot the bill for the rest of it and more making it a profitable business to be in.



Advertising logic works on the basis of what % of viewership are they likely to gain access to.



Let's take a look at another industry: Television. When the number of channels on Television started increasing, there was a disruption and the audience were progressively fragmented. Tivo brought another level of disruption and made advertising footprint further shrink. The move from Free-to-air to Pay channels (and pay per view) was the answer for TV channels. Advertising revenues on top of these subscriptions is similar to the model pursued by newspaper medium (as it is now).



For newspapers, the disruption brought about by the online medium is very high. Caught between the rock and a hard place, newspapers can't opt out of the online medium altogether and the free consumption culture of online medium doesn't convince their audience to fork out enough to consume the same thing for even a fraction of the price they would have to pay if it were printed on paper.



This is still a new phenomenon and yet to play out in its entirety.



But here are some points worth thinking about:



>Cost of production and distribution: Hypothetically, if the print versions were to be completely abandoned, the online medium should allow for big savings in production and distribution costs.



Another way to look at this would be that print might work in a variant of the Logos Bible Software model married to a POD structure.



The entire model of how the news is collected and processed for publication would come under pressure and some of the current 'inefficiencies' would have to go.



> Sales and advertising: I suspect that a variant of a high priced subscription with minimal (but very expensive) advertising might work better than free and google adsense approach.



In the end, like any other publishing medium, if there is a dip in advertising it will not be on just one medium. It will be across the board and the poorly managed operations will feel the pinch sooner than the better managed ones.

  Rex [09.18.07 04:01 AM]

“The hybrid model has some potential, but in the long run, the advertising side will dominate.”

As the paid subscriber base is low so they will definitely go for online advertising, which can bring them big bucks.In my opinion,it is a right decision,which will benefit some online readers too.

  Holger [09.18.07 04:49 AM]

Sorry for asking this more or less off-topic question here: Does the New York Times put ALL articles and stuff from the printed newspaper online?

Would be very kind if someone answers.

Regards
Holger

  Jimmy Guterman [09.18.07 05:25 AM]

The entire newspaper is indeed online, Holger.

  jsanderz [09.18.07 07:36 AM]

It was bound to happen in the end, with websites such as Netvibes of which you continually receive updated news to sites that have RSS, which is just like having a digital newspaper on screen.

  Peter Wayner [09.19.07 05:22 AM]

I don't know the people at the NYT who made the decision to put the op-ed page behind the wall of pay, but it made intuitive sense to me at the time. The front page news may be essential, at least in the eyes of the editor, but it's much closer to a commodity. In theory, the op-ed page columnists are supposed to inject something special or surprising. Whether they do that or fall into a rut is just a question of whether practice can match theory.

But it doesn't matter any longer. For all I know, they could pay for 50 reporters with the additional ad revenue from the emailed copies of Maureen Dowd's pieces. Sure, that group is sort of an echo chamber, but they're a faithful echo chamber.

This may be why Russell Baker once said that newspapers are filled with more "olds" than "news".

  Andrew Langmead [09.19.07 07:11 PM]

Jimmy,


If you consider the fact that print subscribers got a TimesSelect account for free, are you sure that the program was an attempt to generate revenue from the web site? Or was it an lessen the decline of the newspaper subscriptions?


In Wall Street Journal on Line: Readers Pay but Profits Remain Elusive the reporter paraphrases New York Time Digital's position as "few on-line publishers, including The Times, are willing to accept the decline in readership that comes with subscription charges." A few years later in Adding a Price Tag he describes the decision to offer TimesSelect in terms of the newspaper, not the web site. (and interestingly, in between the two articles, was when the newspaper and the web site integrated their newsrooms, and did so by putting the paper's Jon Landman in charge of the web site's editorial staff.)


I can imagine a scenario before TimeSelect where many of the former newspaper subscribers, when asked why they canceled their subscription would reply "well, I read it all online anyway." If so, I can see why it would seem likely to someone at marketing within the New York Times that if the cost between the print and online versions of the content was less, then someone was less likely to leave.

  Harvey [09.20.07 03:40 AM]

It's all about striking the right balance between free and valuable.

I never get out my wallet unless you can *prove* to me that your content is worth paying for.

The problem with most newspapers is that you get the same content from all the providers. But I have subscribed to content where it's niche, technical or hard to find elsewhere.

The amount of very good free content out there is pretty amazing, but good niche content is worth paying for.

  Peter Harder [09.20.07 04:53 AM]

I think it is a matter of specific content. If you offer highly specific and high quality content online then you can charge for it. But most newspapers write about similar things so you do not exactly have to buy a NYT to keep up to date. Newspapers should be able to generate enough money through advertising I think. They do not have any printing costs and there are many people visiting. So they should be able to make a lot of money

  Tom Black [10.10.07 04:47 PM]

It's going to be a tough haul for American newspapers moving forward, even marquee papers like the Times and Journal. Those of us who depend on newspaper content for information, entertainment, and help in decision-making hope they will succeed, in whatever form. I fully agree with this! Regards

  Mark Van Patten [10.20.07 03:05 PM]

There is life outside the NYT. The NYT has ceeded it's role as the world's newspaper. So don't judge the whole industry by the big ten.

What's missing from all the discussion is the fact that advertising ranks about 4th in importance to readers. Advertising is news to people. Attempts to put ROP ads online always segregate the ads from reading matter. Print doesn't translate well to online, and online can't handle a typical retail ad well.

So when the traditional "news" migrates to the web 100% 24/7, newspapers will still be printed, and be 100% advertising. It's just that "news" in this case will be redefined as advertising.
Don't sell those presses yet.

  Roei [11.13.07 02:38 PM]

I don't think that newspapers are going to disappear, but if they are not going to give a free access to their sources in the internet they will shrink in the next 5 years, because the other that will, will be more attractive in the web and probably after a while more attractive in the printed format.
But in the next 5 years people will still want to get their printed paper to their homes everyday.

  Walmart [11.25.07 01:17 PM]

If I find good article in NET I could pay!

  James Burt [12.05.07 12:09 PM]

I found that people still prefer to read newspapers and magazine from the hard copy of it. It is convenient for those who work online to pay for a copy of the online newspaper. As long as there is a need for a hard copy for newspaper, it will still be there.

  Johann Fischler [01.03.08 11:23 PM]

I think that information is value. It doesn't matter if it can be found in newspapers or the internet. Why can't internet posts represent a certain value? Perhaps we will see something corresponding to the old-fashioned rates for telephone calls in the internet? The higher the quality of the information, the higher the rate. And one who does the investigation and writing could participate.

  Jim [01.17.08 08:44 AM]

It's going to be a tough haul for American newspapers moving forward, even marquee papers like the Times and Journal. Those of us who depend on newspaper content for information, entertainment, and help in decision-making hope they will succeed, in whatever form. I fully agree with this! Regards

  Oyun indir [01.28.08 05:10 PM]

Sales and advertising: I suspect that a variant of a high priced subscription with minimal (but very expensive) advertising might work better than free and google adsense approach.

  Gabriel [02.21.08 01:43 PM]

With so many options in internet to access all kind of information from different countries, different view, different interest, it becomes unnecessary to spend in subscription.

One example is http://www.mediaplanetaria.com with free online newspapers, web radio, web tv, from every country around the world. There are so many other portals.

It is obvious that publishers are finding other ways to make money (in the same way the music industry is re-inventing the service; and how the telephone companies, due to the reduction in the revenues for long distance charges, were forced to become internet providers).


Gabriel

  Ueltzhoeffer [03.25.08 07:11 AM]

This is a biographical funny facial from the first Man in the world. Have a look for Mr. George W. Bush.

  rugs [06.06.08 06:05 AM]

This is true, that the newspapers are really going to start finding themselves needing to really change their format of business. Newspapers really are the old thing in many ways, and now that we can get so much information on-line we don't really need to refer to newspapers. In fact, many of the on-line resources and blogs give us better news : news that really is less sensationalised, and more to the fact and the point.

  Mike [08.24.08 06:32 AM]

The hard copy of newspapers would never end as we always need it. But still its a great idea to pay for a quality newspaper

  korneto [11.12.08 02:17 PM]

Due to the fact that i've 3 different newspaper subscription, I found it hard to believe that people prefer to read newspapers or magazines from their computer screen. I think that in the near future (5 years) there will still be a need for hard copies.

  Toeic [12.25.08 06:42 AM]

I don't agree with Mike's post because as you can see not only that there is a drop in the hard copy newspapers sales but the economic crisis will make it much worse around the middle of next year, and i believe that the newspapers over the internet will get all those readers.

  arazim [01.11.09 07:05 AM]

In my opinion, there is now way in the world that
The hard copy of newspapers will vanish (ever), I know to many people today in all ages that can sit near the computer screen more than 1 hour in a row.

  Meital [01.14.09 01:45 PM]

I think that the answer doesn't really matter, we should ask another question , instead of asking "Will Anyone Pay for a Newspaper Online?" we should change the question to be "Will the advertisors continue to advertise on hard copies?"

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