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Behind The Times


Last weekend, I went to see New York Times: Page One, a documentary on The Times’ struggles in today’s digital landscape. The New York Times, whose revenue has significantly declined in past years, still remains one of the top sources of credible reporting in the US. The Times website receives approximately 30 million unique visitors per month. To survive, the Times is restructuring its business model.  On May 26, 2011 The Times instituted a paywall for visitors who want to access more than 20 articles per month. This is the second time that the New York Times has launched a paywell. The first was in 2006, TimesSelect. The paywell was unsuccessful at that time, and The Times pulled the plug in 2007 due to the loss in advertising revenue.

I don’t know if the scheme is going to work this time. I definitely hope it does. Early results are encouraging. The number of paid digital subscribers already surpassed 100K within three weeks of the global launch of the scheme. The question is whether this model is enough for The Times’ future viability. I think the Times needs to focus on the “Trust Market” rather the “Information Market” to survive. According to the Nieman Journalism Lab center, “Trust” not “Information” is the scarce resource. If the  Times is in the Trust business, it should also consider packaging and selling its content to businesses for decision making in a similar way that Bloomberg and Reuters do today. 

There is no doubt that the new digital landscape has democratized access to information. No longer do news organizations hold an oligopoly. A competitive market has driven the price of “information” down to free levels. However, not all information is the same. Trusted information, especially if served in a combination of interactive data, analysis and storytelling formats, carries a premium.

For instance, Bloomberg and Reuters are profitable companies. Bloomberg provides free access to its news and reporting businesses, Businessweek and Bloomberg News. However, Bloomberg also monetizes by selling financial data through its trade terminals. Reuters follows a similar business model. These companies realize that the value lies not in the content but in how it is served. The Times also needs to move in this direction. This is a huge opportunity, as most media companies focus primarily on reach. The Times can become a provider of data and analysis for social, economic and political issues. This does not means that the newspaper side won’t continue to exist. It just means that advertising and newspaper subscription is not the only way to monetize and survive in this digital economy. 

Comments

  1. Interesting post. Clearly it's easier for niche (those usually dealing with financial and economic content) publishers to pursue a number of high value revenue streams at the same time. As such, one prominent business newspaper we work with has repackaged all of their content into a proprietary database that they then sell to local banks. (Incidentally, here http://blogs.reuters.com/felix-salmon/2009/08/07/how-the-link-economy-benefits-reuters/ is a good piece on how this works for Reuters).

    The question is then, what sort of premium products can *mainstream* publishers come up with that create sales channels beyond subscriptions and advertising? It's a tough one, no? You mention things like "data and analysis for social, economic and political issues". Could you expound a bit more on how you think these content types can be leveraged in a way similar to, for example, Reuters'?

    ReplyDelete
  2. Several years ago, a consultant, a reporter who had learned database programming and myself (the web publisher) at our local newspaper proposed it to the owner, who rejected it out of hand. We proposed parsing our local city data, for crime, water usage, property taxes, and the like, and selling it to the police department (who had initiated the request), realtors, school reports, potential home-buyers and the like. Lots of outfits do this, and the new fad is for cities to do it themselves. But there will always be a market for higher-level analysis even of publicly available data. One would think newspapers, with their highly trained and experienced reporters, would make a natural fit, but aside from the financially-focused papers mentioned, it seems not to be likely.

    ReplyDelete
  3. David Caploe PhDJuly 15, 2011 at 5:55 AM

    Very interesting discussion, guys, thanks so much ... no substantive comment as of yet - still pondering - but this IS something important ...

    ReplyDelete

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