Sat. Jan 08, 2005
Pay the Gray Lady
Business Week has a long and detailed article on “The Future Of The New York Times.” It covers quite a bit of ground (the recent past, as well as the future), but there’s one aspect of the article that has the web a’bubblin’. It seems the New York Times is considering moving to an entirely subscription-based model, with no free access to their site. And there are those who think if that happened (and other newspapers followed their lead) “there are very few bloggers who would have anything left to say.”
The article starts out with what I read as a rather hopeful statement by Arthur Ochs Sulzberger Jr., the current “proprietor” of the Times: “‘Within our lifetimes, the distribution of news and information is going to shift to broadband,’ Sulzberger says. ‘We must enter the broadband world having mastered the three key skill sets — print, Internet, and video — because that’s what’s going to ensure the future of this news organization in the years ahead.’”
Though that sounds like a rather optimistic forwarding-looking statement, later in the article we find there are many at the Times who haven’t a clue about how best to “master” the Internet. Of course, we must first accept that this is not a public service, this is a business, and there’s a bottom line that takes priority over “being a good Netizen.”
Just the same, the bottom line doesn’t exactly weigh in on the side to the Dead Tree People.
In 2004, the paper posted an infinitesimal 0.2% increase in the circulation of both the daily edition, which now stands at about 1.1 million, and the Sunday paper, which is just under 1.7 million. Since the national expansion began in 1998, the Times has added 150,000 daily subscribers outside New York but is thought to have lost about 96,000 subscribers in its home market. The net increase of 54,000 represents a 5.1% uptick, which compares with the 3.5% decline in U.S. daily newspaper circulation over this period. What’s more, the Times posted its gains despite boosting the price of a subscription by more than 25% on average.
Online, the Times already is making serious money. New York Times Digital (which includes Boston.com as well as NYTimes.com) netted an enviable $17.3 million on revenues of $53.1 million during the first half of 2004, the last period for which its financials have been disclosed. All indications are that the digital unit is continuing to grow at 30% to 40% a year, making it NYT Co.’s fastest-revving growth engine.
Advertising accounts for almost all of the digital operation’s revenues, but disagreement rages within the company over whether NYTimes.com should emulate The Wall Street Journal and begin charging a subscription fee. Undoubtedly, many of the site’s 18 million unique monthly visitors would flee if hit with a $39.95 or even a $9.95 monthly charge. One camp within the NYT Co. argues that such a massive loss of Web traffic would cost the Times dearly in the long run, both by shrinking the audience for its journalism and by depriving it of untold millions in ad revenue. The counterargument is that the Times would more than make up for lost ad dollars by boosting circulation revenue — both from online fees and new print subscriptions paid for by people who now read for free on the Web.
Sulzberger declines to take a side in this debate, but sounds as if he is leaning toward a pay site. “It gets to the issue of how comfortable are we training a generation of readers to get quality information for free,” he says. “That is troubling.”The Future Of The New York Times
So many troubling assumptions in so few paragraphs.
If you look at the charts, Circulation By The Numbers and A Halting Recovery, the picture seems fairly clear. Daily hard copy sales (~1.17 million) are increasing barely enough to be called an increase, and even that is being fueled by people outside the New York area. Meanwhile, over 15 times as many people view the New York Times on the web each day (over 18 million).
While it appears the online division is the fastest growing in the company, they are so far producing only 10% of the total company profit. Now, if you wanted to increase that percentage, and if “advertising accounts for almost all of the digital operation’s revenues,” how would you do that? You can’t really increase the number of ads on the current edition pages without adverse effects. You need more pages on which to place ads.
You’ve already got them. Probably numbering in the millions. They are called “archives.” The average person would have no idea they exist, because only “Articles from the last 7 days are free, as are all reviews back to 1996. Articles in the Article Archive: 1996-Present ($) may be purchased for a small fee.” After 7 days, new content at the New York Times becomes locked content, costing you $2.95 a pop (unless you know the super secret RSS decoder ring URL for articles after May 5, 2003). If you can find it. Because, well, it sure isn’t in Google. To Google, the New York Times hardly existed prior to the past year.
The New York Times has the option of putting nearly a decade of archives online, with tens of thousands of words on thousands of topics, and have it available to anyone who searches about any news event of the past decade (or travel, or automotive topics, or NY real estate, etc.). Right now, though they won seven Pulitzers for their coverage of 9/11, you’d be hard pressed to see exactly why. Without paying.
We already know “advertising accounts for almost all of the digital operation’s revenues,” so I don’t think their $2.95 a pop archives are doing big business. So why not sell ads on those millions of pages, and put them out there for the world to see? At my measly site with less than 10,000 archive pages, Google searches represents 20-25% of my traffic. Theoretically, the Times could increase their daily visitor numbers from 18 million to 22 million or more, creating more than 8 million new eyeballs to market their ads to each and every day.
Instead, they talk of even closing their front door, the one that’s only open now for seven days. In effect, this will completely remove them from the web. Because, like it or not, if you don’t exist in Google, you might as well not exist on the web. Not if you want to be a Big Boy. If you can’t be easily linked, you’re not on the web. If you close your doors to all but subscribers, you’re not just killing trees any more, you’re killing electrons.
And, frankly, no one will care. Not in numbers that will make any difference in your bottom line.
Newspapers no doubt face some serious concerns. I’m not blind to that. I can use myself as an example. Ten years ago, I bought the Atlanta Constitution every morning. If I was in town, I bought the paper. 50 cents per day, and $2.00 on Sunday. $260 per year.
Today, I still read the Atlanta paper every morning. But I do it online. I still buy the Sunday paper in dead tree form, so they now get $104 from me per year. They’ve got to find a way to make up that $156 difference via online revenue.
The obvious answer is ads, but Unfogged notes: “I’m sympathetic to the news providers, because, honestly, do you even see the ads anymore? My eyes look right past them; I can’t name a single ad I’ve seen online this week.” Well, I read the Sunday paper in dead tree form last weekend. I couldn’t tell you a single ad that was in the Sports section (though I did dig for specific sales catalogs I know to be in the Sunday paper). I drive by uncountable billboards during the week. I never “see” a single one, at least, not the message on them. I tune them out, as we all do the various forms of advertising that inundate our daily lives.
Does that stop them from trying? Do they give up on billboards, or when they find people skipping commercials on TV, do they stop buying them? No, they have accepted that they must expend certain sums to get their name/product/service into the public consciousness. We just have to wait for them to be fully convinced the web is another one of those important places they simply must spend money.
Because suddenly moving available content behind a paid firewall won’t work. Trust me. If you read this site very often, you know I’m a big Atlanta Falcons fan, but when the AJC moved 75% of their Falcons coverage behind a paid firewall … I balked. I was their prime target audience, and all they got out of me was one extra buck. I bought two Monday papers this fall to get the post-game coverage they didn’t have online for free. Out of 16 games.
If I wasn’t willing to pay my hometown paper a monthly fee for online Falcons coverage, what are the odds I’ll pay a monthly fee to view the New York Times? Or the Washington Post? Or any newspaper?
Mr. Sulzberger worries about “the issue of how comfortable are we training a generation of readers to get quality information for free” ... as if there’s still a choice. It’s too late, sir. There’s an ocean of free content on the web, and if the Times bucks that trend, they will be seen as the oddity, the exception, the People Who Don’t Get It. There will be no more training. Not on the user side of the equation.
It’s on the other side. And this article is evidence of the flailing about there. First of all, it’s only “free” in your head. There’s an exchange going on here, just not the one you’re used to, a couple of quarters for a chunk of wood pulp and ink. I’ve given the Times, the Washington Post, and the Atlanta Constitution my demographic information in order to create a log-in and use their site. They, in turn, use this demographic information (and my trackable progress through their sites) to sell ads on web pages that contain the same content they had already produced to sell dead trees.
NYTimes.com can either become a corporate vending machine parked next to a bunch of free racks, or it can become a full-fledged part of the web. Up until now, they’ve just had their toe in the water … and it’s bringing them $35 million a year in profit. Want more? Stick in the whole foot.
Of course, when the Gray Lady shifts about so, sideline observers assume others will soon fall in place.
Newspaper industry consultant John Morton, who heads Morton Research Inc., said he thinks many newspapers want to wean readers off free online content and transform their Web sites into paid-only publications.
Free editions of newspapers on the Web are “quickly falling out of favor,” he said. “I think you will see newspapers selling electronic subscriptions or print subscriptions, or a combination of both, which is what the Wall Street Journal does, and has been very successful at.”MSNBC: “N.Y. Times considers charging Web readers”
First of all, I think the Wall Street Journal is a false comparison, as it offers some very unique financial information in addition to news and opinion. But let’s assume the worst, that NYTimes.com goes pay only, and washingtonpost.com and the other major players quickly follow suit.
What would that mean? Kevin Drum says “For all the big talk in the blogosphere, if this happened it would pretty much spell the end of political blogging. Without a copious supply of online newspapers and magazines providing the raw material, there are very few bloggers who would have anything left to say.”
Really? Because they can’t link to the raw material? When have George Will or Maureen Dowd linked anything in their columns? In fact, didn’t they have columns before there was a World Wide Web? How the hell did they do that? When has their column been anything more than 800 words that constitute their personal political ideas … punditry!
This appears to be part of the elbowing for position in the web space that is going on in some quadrants of both the blogosphere and the mainstream media. Many talk as if this was a zero sum game, where either the media or the bloggers will prevail (the “bloggers will replace the media” crowd). Kevin talks as though it’s some kind of parasitic relationship, and if we lose our free “hosts,” “very few bloggers who would have anything left to say.”
The “host” is the web, and the relationships are all symbiotic. Some in the media may snort that they don’t need bloggers at all, but they need the web. They need the ad revenue from it. They need the eyeballs. To maximize that, they need to be indexed in search engine databases, and they need people to link them when they find something interesting. Or maddening. Sounds like bloggers to me. Because for the media online, the bottom line is More Eyeballs.
That seems to be the biggest message the online media misses, in both an internal and external sense: Links not Evil; Links Good. Make Linky Love.
And if you are a blogger who really thinks that the loss of free online news sources would leave you with very little to say … stop now.
You’re already done. You just don’t know it yet.
Months Later (5-19-05): Pay the Gray Lady, Part Two