Content Matters

Less than five years after launching (and 3 years after shuttering) TimesSelect, it appears the New York Times (NYSE: NYT) is about to return with another paid offering.

At its peak, TimesSelect attracted roughly 750,000 subscribers, with nearly 2/3 of those being print subscribers and fewer than 250,000 online-only subs.

When it shut down TimesSelect, the Times expected to easily replace the lost revenue with the advertising revenue to be gained by allowing Google and others to index its archives. Of course, that was based upon the world of online advertising in 2007, not that of 2010.

 So, what can we expect this time around?

Rather than a solid pay wall, the rumours are that it will be an FT-like metered approach, where users can access a page without charge, but as their page views increase, they will need to subscribe.  That approach makes more sense, as it allows all of the content to be spidered and indexed by the search engines, continuing to drive traffic.

It will be interesting to see where the Times sets the bar for free/paid access. The FT has lowered the bar a few times. It initially allowed 30 page views per month to registered users and 3 to unregistered guests. Now, that’s down to around 10 pages for registered users and 1 page for guests. But I don’t think that the Times is prepared to dramatically shrink its audience to a fraction of where it is today. I could see them allowing 50-80 page views per month before requiring users to pay. The goal will be to convert those who read the paper online each day, not those who read an occasional article.

Another big difference I expect we’ll see from the TimesSelect days is with the editorial pages. With TimesSelect, editorials were only available to paid readers. That was the exact opposite approach to that of the WSJ, where editorial opinion was one of the few open sections of the site. The NY Times wants its political opinion to be heard and shared, while its editorial page writers want to reach the widest audience possible I would expect editorial pages to remain open and not subject to page view counts.

Breaking news is another area likely to remain open. It’s hard to be the primary news authority if no one can read your news. So, I think that breaking news will remain open in the same way that the WSJ does it today. I can’t imagine the Times ceding their position on breaking news to CNN. Breaking news will remain free.

So, what will drive usage of paid content? I think they will focus on some of the pieces that makes the Times unique – the Book Review, Times Magazine, political coverage (non-breaking) and other content to convince users to pay. This announcement is being done in conjunction with the Apple Tablet release, so I’d expect access on the Tablet to be fee-based, just as it is on the Kindle. I think we’ll see the iPhone app require a subscription as well.

I think the Times will bundle its electronic offering, so one subscription will allow for access on all devices. I assume that print subscribers will gain access to this package as part of their subscription as well.

In terms of price point, I would expect them to charge somewhere around $79-99 per year (current Kindle-only subscription is roughly $150, which I think is a bit steep).

Will it work?

I remain a skeptic until someone proves they can get consumers to pay for news (and the FT and WSJ subscribers are largely b2b, not consumers)

I see them getting back to the level of 250,000 or maybe even 500,000 online-only subscribers at a $99 price point. And there’s no doubt that page views will drop. Would $25-50M in revenue make that worthwhile? Maybe, though as the advertising market strengthens, they will miss having the larger audience.

But the newspaper industry today is in free-fall and we can’t blame the Times for experimenting. Let’s hope they’ve learned from their TimesSelect experience and come up with a model that works.