Tag Archives: TimesSelect

Payment for Online Content is Far From Dead, Despite TimesSelect's Demise

Many commentators are hailing the demise of The New York Times‘ TimesSelect service as the demise of paid content online. I hate to rain on their parade, but paid content isn’t dead. Consumer Reports, Zagat, Playboy and other premier brands prove everyday that paying for the premier content in a topical category is very much alive.

So why did the premier brand of The New York Times fail at paid content with Times Select? Because The New York Times and other traditional newspapers don’t provide premier content in a topical category. Traditional newspapers provide a package of news that attempts to satisfy everyone’s interests in all categories— an endeavor that is doomed to fail online and that is increasingly failing in print, too.

The demise of TimesSelect is notable only because it’s the last major gasp of newspaper publishers’ attempts to charge for providing everybody online with the exactly the same package of content. Not only won’t online consumers pay to receive exactly the same package as everyone else gets from a newspaper brand, but they won’t pay for even the best slice of that package.

That doesn’t mean that online consumers aren’t willing to pay; they just aren’t willing to pay to receive exactly the same package as everyone else gets. Unfortunately, most media executives don’t seem capable of conceiving that their companies can produce anything else at once but the same package of content for every consumers. Those executives are stuck thinking in what academics call ‘one-to-many’ or mass media terms.

People would be willing to pay a subscription fee for a service that delivers news to them online; but not for a service that doesn’t exactly meet their needs and interests, that sends exactly the same package of news to everyone. Paid content isn’t dead; just payment for the traditional ‘one-to-many’ package of content is.

There is a three-step process towards understanding why TimesSelect and other similar newspaper projects are doomed from the start. The steps are to understand why more than one billion people worldwide have gravitated onto the Internet; why traditional newspapers fail to match the reason why those people gravitated there; and why the traditional packaging of newspapers needs to radically change if that industry is to survive.

The fact is that, while everyone shares a few common interests (the weather, for example) and some people share some common interests (such as fans of the Red Sox), each person has many specific interests (a fan of Patrick McGoohan, knitting, Malaysian cuisine, etc.) and each individual is a quite unique mix of those common and specific interests.

To satisfy her mix of interests, an individual will use whatever media is available to her. Thirty years ago, her only choices in media were the three or four general-interest TV networks (ABC, CBS, NBC, and maybe PBS) she could receive via antenna, one or two dozen magazines (mostly general interests ones such as Time, Newsweek, USN&WR, Life, Look, etc.) available on her local newsstands, and one or perhaps two (unless she lived in a metropolis) daily newspapers that were delivered in her town. While those would likely certainly her common interests each day, she’d have to glean them for the very occasional that might satisfy her mix of specific interests.

Then came cable (and later satellite) TV, which gave her dozens of specifically topical channels 24/7/365. Then came developments in offset lithography that made publication and distribution of topical (‘niche’) magazines economical, and hundreds appeared on newsstands. And then she got access to the Internet, which gave her access to millions of topical webpages. Usage of all of these satisfies her – and a billion other people’s — unique mix of commons and individual interests better than any general-interest newspaper or news program can. People’s use of the Internet to satisfy their individual mixes of interests caused the growth of the search engines. They didn’t gravitate to online to read general-interest newspapers and news magazines (things that later followed them online).

Because people now have better means of satisfying their unique mixes of common and individual interests, general-interest newspapers’ circulation and readership are declining, as are general-interest news program’s listenership and viewership. For the past 30 years, you can track those declines to match the rise of CATV, ‘niche’ magazines, and Internet access (the recent plummet in newspaper circulation began almost exactly when the majority of Americans got broadband access, ‘always-on’ access to this better way satisfying their individual mixes of interests).

Traditional newspapers are obsolete. The reason why the traditional newspaper deliver exactly the same package of stories to all readers isn’t because all readers want exactly the same package. It’s due to a limitation of the Industrial Era technologies still used to produce those newspapers: an analog press (like an analog broadcast transmitter) can only produce the same edition at one time. That’s the latent reason why a newspaper editor picks for publication mainly the stories that are of most common interest. For example, I’m a New York Times subscriber who’s a soccer and Formula One racing fan but I rarely see stories about those sports in that newspaper. Yet I know NYT receives entire wires devoted to daily events those sports (even the Swiss Intercantonal league, Turkish Third Div., etc.) because I was the Reuters executive in charge of delivering those to the Times. The NYT newsroom has the soccer stories I want, but doesn’t print them and instead prints baseball and American football stories, because its analog presses simply can’t produce editions that match each individual subscriber’s interests.

Though that limitation of analog presses doesn’t exist online, almost every newspaper is inadvertently transplanting it there. For most of the past ten years, I couldn’t get those soccer stories from NYTimes.com either, because it would publish online only the stories that appeared in print. (For the past four years I’ve been able to find the soccer wire on NYTimes.com but had to click half a dozen levels down into the site to find them.) Shoveling into online the same package of content for everyone doesn’t add value in a medium that people are using to satisfy their individual interests and needs.

Moreover, people ‘unpackage’ the traditional newspaper’s package of content online. A person who might have read the printed Willimantic Chronicle for national news because it’s the only printed daily available in Willimantic aren’t likely to read that paper’s website for national news, because they’ve got now access to NYTimes.com, CNN.com, etc. Ditto with national sports, business, international news, etc. They’ll use a newspaper’s website only for whatever that newspaper can uniquely do (which is local news in the most cases). This means that only a fraction of the traditional newspaper’s package of content has value online. That means people might be willing to pay, at most, only a fraction of the traditional price for it online (which fits within surveys that indicate people are willing to pay online for newspaper content, but no more than about $1 per mo.)

So if providing the same package of content for everyone doesn’t add value in a medium that people are using to satisfy their individual mixes of interests and that package is worth only a fraction online of what (fewer and fewer) people are willing pay for it in print, why do so many newspaper publishers still hope people will pay the same for it online as in print? Or pay something for just a slice of that traditional package?

The NYT at least realized that its columnists were a unique part of its traditional package, but wildly miscalculated the people would pay $50 per year for that. Some 227,000 people did, producing $10 milion per year in revenue for NYT, but they were only 1.6% of NYTimes.com’s 13M registered users and that revenue wasn’t much compared to its $300M in revenues. Pluse, lack of access meanwhile displeased the other 12.7M registered users.

The reason I mentioned soccer is that the stories exist that can satisfy each person’s unique mix of common and specific, but traditionally produced newspapers — in print and online — don’t deliver the right match to each person’s mix. It’s a distribution problem: the stories exist but aren’t getting to the right people. So, people are using new media to hunt for the mix that satisfies them, visiting many sites and using many different mechanisms. Eliminating their need to hunt is the business opportunity here for media companies. Google and Yahoo! know that, which is why they’re beginning to offer customizable services that can deliver from all sources stories that can match each user’s unique mix of common and specific interests.

Although services like that can be subsidized entirely by advertising, if people are willing to pay for anything online, it’s likely that they’d be willing to pay for a daily news service that uniquely matches each of their mix of common and specific interest. Would you be willing to pay $5 to $3 per month for a service that each day delivers exactly what you want from all news sources, trade journals, blogs, etc.? The technologies (structured data, etc.) to do this online already exist, but the problem is the news industry’s infrastructure is still based on the Industrial Era practices of producing the same thing for every users and producing it from only one brand.

Therein also lies the problem with most micropayment systems. You’d need a universal one to satisfy most people’s needs and interests. People aren’t going to use a different one for each site (even if it might serve a number sites). It’ll need to either be build into the infrastructure, not layered atop the status quo, or exist upstream of the consumer and built into whatever service ultimately delivers the customized service to her. In other words, the aggregation of micropayments would be done wholesale by whatever service charges the consumer the monthly macro-price.

A paid service for custom content would likely also feature advertising, except it would be advertising to match the person’s unique mix of interests. Such a service would be more valuable to both consumer and advertiser. [How to remedy the way that online marketers have blown consumers’ trust during the past 15 years is another matter.]

A unique printed edition for each user can also now be produced. Agfa and Oce are now manufacturing digital presses (i.e., giant inkjet printers) for newspapers that, when coupled to a database and templates, can produce an edition uniquely customized for each subscriber. (For example, the Agfa Dotrix press costs a fraction what an analog press does, requires only one operator, and can produce 20,000 newspaper copies per hour. That speed is fine for about 1,000 of the nation’s 1,450 dailies; larger ones need only buy multiple digital presses.) I know that MAN Roland and other manufacturers of traditional presses are likewise developing digital presses that would service larger newspapers. [Whether printed editions will soon be supplanted by e-paper is another matter.]

So, the era of one-to-many, of each person getting the same thing daily, is over. People aren’t going to pay for that online. Fewer and fewer people are continuing to pay for it in print. And if soon nobody’s going to pay for that package, then nobody’s going to pay much or anything for just a portion of that package.

Paid content isn’t dead; just payment for one-to-many content is. The problem is most people in the industry still think in only one-to-many terms, including those pundits who are hailing TimesSelect’s demise as the demise of paid content online.

TimesSelect No Longer $elective

Since we launched TimesSelect in 2005, the online landscape has altered significantly. Readers increasingly find news through search, as well as through social networks, blogs and other online sources. In light of this shift, we believe offering unfettered access to New York Times reporting and analysis best serves the interest of our readers, our brand and the long-term vitality of our journalism.

You don’t need an online geologist to see that the online landscape hasn’t altered significantly since 2005. The quotation above, from an announcement in today’s NYTimes.com Senior Vice President & General Manager Vivian Schiller, is simply her company’s attempt to make people think that charging for online access to some of its website was a good idea two years ago.

Charging for online access to the Opinion section and archives of The New York Times never made sense. The newspaper would have earned greater revenues through advertising if it had kept access to those sections free and it wouldn’t have aggravated a significant number of its online readers.

Instead, TimesSelect was an ego exercise forced on NYTimes.com by several senior executives of The New York Times Company. They never really understood the economics of new-media and insisted that the circulation revenue business model of printed edition publishing should work if shoveled online.

The exercise yielded some $10 million from 227,000 paying customers. That’s less than 2 percent of the site’s more than 13 million registered users. Its revenues are less than 5 percent of the site’s revenues from advertising on freely accessible webpages. Another half a million users were given free access to TimesSelect because they were either paying subscribers of the printed edition or students or academics. However, the exercise effectively prevented the more than 12 million registered users of the site from accessing the Opinions section or archives sections for two years. I call thatt a failure and hope those corporate executives have learned something from it.

Supply & Demand and 'Unpackaging' on Newspaper Content Online

Yesterday on the Online News Association‘s discussion list, the editor of a 37,000-circulation daily newspaper asked to hear:

“…from folks who have tried something in between free and paid regarding your online content, such as holding back some print content from online; charging for ‘premium’ online content; giving access to some online content only to print subscribers. If you’ve done anything like this has it produced revenue or slowed print circulation erosion?”

Though I’ve not run a newspaper website in more than a decade, I today replied because I’ve spent more than a dozen years studying online paid content strategy and cases and had for several years been a columnists about the subject.

Here’s the information I provided:

Continue reading Supply & Demand and 'Unpackaging' on Newspaper Content Online

Time and Times

Nearly two months after it cut 289 employees so it could address “the needs of the Web site, specials, and other technologies that will be emerging,” Time Inc. has launched a sweeping redesign of its eponymous news magazine, the publication’s biggest overhaul in 15 years. According to the New York Post, the redesigned Time features “more short news items – some no longer than a paragraph – and points of departure to Web sites all through the mag.”

Is this an indication of the future of printed news media — print editions becoming pointers to the publications’ websites? It would certainly be a reversal of a decade ago when the publications’ websites pointed to the printed editions. Back then, most publishers of news though it would be decades, if at all, before online editions superceded printed editions. I think we can safely say that’s instead happening this decade.

When asked if his newspaper will be printed on paper in the future, Arthur Sulzberger Jr. publisher of The New York Times, said, “I really don’t know whether we’ll be printing the Times in five years, and you know what? I don’t care either.” He told the World Economic Forum in Davos, Switzerland, that his paper is managing the transition from print to Internet.

Nevertheless, I sense hypocracy among those publishers (Sulzberger is not one of them) who cut their print editions’ staff, claim they are switching their company’s focus from print to online, but then don’t significantly add any online staff. I think they’re just cloaking print staff cuts under the trendy excuse that they’re switching focus to online.

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Last month, I wrote about why The New York TimesTimesSelect paid online content experiment has failed despite gaining nearly $10 million in annual revenue. Among other things, I mentioned a remark George Mason University online journalism professor Steve Klein made:

“Even if the Times picked up most of its existing online readers, how are they going to grow a new generation of online Op-Ed readers if they keep the columnists behind a pay firewall?”

Starting tomorrow, the Times will grant TimesSelect access to all students and faculty who have .edu e-mail addresses. “It’s part of our journalistic mission to get people talking on campuses,” said Vivian Schiller, senior vice president and general manager at NYTimes.com, as reported in Editor & Publisher magazine. “We wanted to open that up so that college students and professors can have a dialogue,” Schiller said. “”I want to reinforce that this is the most important generation for us to reach out to.”

The Times apparentlly hopes those students will pay for TimesSelect access after graduation. That’s a nice hope, but I think it will just put the those students into the same predicament TimesSelect has with everyone else: Will people who previously had free access to that content pay for it? After 18 months, the Times has gotten only a 1.6 percent of its websites’ users to pay for TimesSelect. Perhaps granting students free access now will someday raise that conversion rate to 1.8 or 2 percent. Even if the rate were to double, it’s hardly a success

Each Day on the Road Requires Three in the Office

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Over the years, I’ve learned that each day on the road requires three days in the office to catch up. I’ve been on the road for the five of the past 13 weeks and can barely see where I should be, nonetheless catch up. Nevertheless, here are some of the things (some a bit old) that I’m today noting during my catch up:

TimesSelect, the paid-access portion of The New York Times‘ website currently has approximately 627,000 subscribers, 34 percent of whom actually pay. The rest get free access to TimesSelect because they subscribe to the newspaper’s printed edition. The newspaper’s website receivespremier newspaper in the English-language has been able to convert only 1.6 percent of its website’s users into paying after 18 months of marketing. I think that result fits within the One Percent Rule I formulated in my ClickZ columns nearly five years ago.

When TimesSelect launched in September 2005, The New York Times‘ digital chief Martin Nisenholtz told Editor & Publisher magazine’s Steve Outing that its goal was hundreds of thousands of subcribers in the eary years and even more over the long term. Outing wroter:

One factor that Nisenholtz thinks will encourage people to pay to keep reading the Op-Ed crew is the notion of the “Times loyalist” — perhaps 1.5 million to 2 million readers who are devoted to The New York Times brand, and spend significantly more time reading NYTimes.com than they do other news sites. With them, he claims, their willingness to fork over “the equivalent to buying a few martinis” for an annual subscription could be expected.

So you be the judge. TimesSelect has approximately 213,180 paying customers (forget the claimed 627,000 customers: 413,820 of them aren’t paying). That number is in the hundreds of thousands. But is it a significant portion of the 1.5 million to 2 million ‘Times loyalists’ who were targeted? It’s certainly not a significant portion of the more than 13 million users of the website. Does having 213,180 paying customers after 18 months mean that TimesSelect might have 426,360 after 3 years? If you think so, ask yourself why such new customers would pay then to access tollgated content they haven’t been accessing during the past 18 months.

The New York Times earns approximately $11.5 million in gross revenues from TimesSelect. But as Outing noted when TimesSelect launched:

Steve Klein, an online journalism professor at George Mason University, says one of his students raised an excellent point during a class discussion this week about TimesSelect: ‘Even if the Times picked up most of its existing online readers, how are they going to grow a new generation of online Op-Ed readers if they keep the columnists behind a pay firewall?’ Good question.”

My congratulations to New York Times Company Chief Financial Officer Janet Robinson and Chairman Arthur Sulzberger Jr. on their pyrrhic $11.5 million success with TimesSelect!

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Speaking of The New York Times, I wonder if my posting here earlier this month about Norwegian newspapers’ successes online might have prompted its story about that on Monday? It notes that one major Norwegian newspaper publishing company today earns 20 percent of its revenues online and during expects to earn 60 percent during 2008.

In 1995, Schibsted started investing heavily in new media, and it stuck with those commitments in 2000 and 2001, when some other publishers turned skeptical. In recent years, the investments have started to pay off, and Schibsted is now the biggest player on the Internet in Norway and neighboring Sweden. It has also expanded aggressively into new markets like France and Spain, starting free newspapers under the name 20 Minutes and acquiring classified advertising businesses that it is moving onto the Internet.

Kjell Aamot, chief executive of Schibsted, said the company recognized more than a decade ago that “being a traditional Norwegian newspaper company would not be sustainable over time.”

While other newspaper companies tried to cling to their existing business models, he said in a telephone interview from Oslo, “we changed from a defensive stance at the beginning of the Internet age to a very offensive one.”

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aripaev.jpg Undetered by meeting amid many feet of lake-effect snow at Syracuse University’s journalism school, the Society of Newspaper Design named four newspapers as the ‘World’s Best Designed.’ The best are Äripev of Tallinn, Estonia; El Economista of Madrid, Spain; Frankfurter Allgemeine Sonntagszeitung of Frankfurt, Germany; and Politiken of Copenhagen, Denmark. Those were selected from among 351 entries in SND’s annual newspaper design awards contest. The judges commented:

“We saw a lot of great individual pages; the challenge was to find excellence from cover to cover. We learned that a significant percent — even among high circulation dailies — neglected basic typography. That is a real concern. In the end, we chose four very different newspapers that excelled above all others. We found elegance, visual virtuosity, raw energy, grit and innovation.”

More about the four winners.

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American Journalism Review profiled online wunderkind Adrian Holovaty.

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A excellent resource I’ve been using to track the rise of free printed daily newspapers worldwide is the Newspaper Innovation blog and particularly its monthly newsletter (PDF). These are published by Dr. Piet Bakker of the University of Amsterdam / Amsterdam School of Communications Research (ASCoR).