May 17, 2009

Monetization strategies for the New York Times

In his remarks about my recent post that he aptly characterizes as “A Consumer-Centric View of Business Models for Publishing,” Daniel Tunkelang notes that I didn’t directly address the premium/freemium strategy he favors for the New York Times, namely monetizing community. As Daniel puts it,

But community can’t be copied. Even if you mirrored all of this blog’s content and put someone else’s name on it, the comment threads would still live here. You could copy those too, but only the readers who came here could participate in the conversation, and I believe that would still draw most of you.

Frankly, I don’t think that would work. Good blog commenters are precious, generously donating their own time and thought to build up your content. Could one charge people to read that? Maybe. But charging people to write great content for you seems like one barrier too many, and I’m not sure how to charge them to read without also charging them to write. That said, various forums (i.e., message boards) offer premium forums, so at least for some lifestyle business owners the approach seems to be worth pursuing.

Other strategies to consider include:

1. Charging more money to fewer customers for the core printed product. Apparently, that’s what Newsweek and many European publications are doing.

Speaking to the New York Times, Newsweek’s CEO Tom Acheim said: “For us, mass is a business that doesn’t work. I wish it did, but it doesn’t. We did it for a long time, successfully, but we can’t anymore”.

The idea is that, unless you have sufficiently high ad rates, you lose money on each copy or subscription anyway. So you should shrink your circulation to the point that your average reader is a high-value advertising target. Makes sense to me. But I feel I don’t know enough about advertising business models to comment further right now.

2. The premium/freemium of general enhanced access to actual New York Times reporting or opinion. When this is done just with published opinion/analysis, the results seem to be so-so. Most relevantly, the NYT’s own effort in that vein — Times Select — was shut down. ESPN Insider seems fairly successful, but sports news has the advantage that it’s used directly for a couple different kinds of decision making (wagering and fantasy sports). But then, opinions are hardly a scarce commodity! Unless a published opinion serves as a vehicle for communicating valuable knowledge — e.g., a product review based on direct experience and testing, or detailed reporting on a key football player’s availability for the next game, or the experience to judge which publicly-known time series trends are likely to continue and which are likely to reverse — that opinion usually has little or no cash value.

Hence the best opportunities for this strategy probably lie in actually providing more information. Potential premium forms of — or avenues for — information include:

3. Topic-specific premium information subscriptions. Rupert Murdoch evidently favors this approach for the Wall Street Journal, and I heartily endorse it. It is reasonable to expect people to pay for the “best” information on a particular subject. And a respected newspaper like the New York Times could usefully partner with specialized organizations as need be, potentially adding value on both the content and business sides — both in its native region, where it’s obviously a leading brand, and (inter)nationally, where it might be an interloper competing with local newspapers and other providers.

There are many possible subject areas to consider, such as:

A number of the opportunities do seem quite small (just how much better can one do in any one of them than 10-50,000 subscribers?). Even so, this opportunity should have been pursued more aggressively in the past, and it absolutely should be pursued with full force now.

4. One-off ancillary products. Possibilities include:

Again, each of these opportunities seems, on its own, to be fairly small. But the day of mass-produced-only news is rapidly waning. The news providers that thrive in the internet-centric era will be the ones that successfully exploit a variety of customer clusters, market niches, and revenue-stream opportunities.

Comments

6 Responses to “Monetization strategies for the New York Times”

  1. Daniel Tunkelang on May 17th, 2009 8:43 pm

    Have you seen the vast comment stream at the NYT? It’s not uncommon for an article to attract over 100 comments. Clearly these are people who are eager to get their words in front of the NYT readership. I do think some of them would pay for that privilege, or perhaps for being fast-tracked in the moderation queue. I don’t know that anyone has ever tried this model, but the NYT is in a position to try. Of course, there are otherwise to monetize community, such as access to staff via events, tchotchkes, etc.

  2. Curt Monash on May 17th, 2009 9:19 pm

    1. How many commenters are you talking about? It’s hard to see how the hard-core passionate commenters would be more than a few hundred or a few thousand AT MOST.

    2. People are passionate about forums, Usenet, etc. But only a small fraction of those would pay just be able to SPEAK.

    Interesting idea to make people pay for the opportunity of commenting. It’s sort of like selling them advertising …

  3. Daniel Tunkelang on May 17th, 2009 11:26 pm

    The comparison to advertising is not off the mark. But that’s where we stand today: people are mostly unwilling to pay for content, but they are willing to accept advertising as the price for free content; meanwhile, people who want to push a message are willing to pay for the privilege. Hell, call them “sponsored comments”.

  4. Curt Monash on May 18th, 2009 2:33 am

    Daniel,

    I think that charging for the right to comment, without offering other benefits as well, would generate less than $100,000 annual revenue for the New York Times, and unless heavily promoted would indeed generate less than $10,000 per year.

    I.e., it would be a money-losing idea and would damage the business in other ways besides.

    The only ideas I can come up with to get past those numbers are very far from the “Charge somebody to be part of the community” concept.

    CAM

  5. Geschäftsmodelle für die NYT | relevant media. now. on May 18th, 2009 5:01 am

    [...] zurücklehnen und die besten Ideen aufgreifen muss. Die letzten vier Ideen kommen von Text Technologies. Ich sage absichtlich nicht “neue”, sie sind dennoch eine kurze Erwähnung [...]

  6. NYT Appoints a “Social Media Editor” | The Noisy Channel on May 26th, 2009 3:00 pm

    [...] taken the apparently controversial stance that the New York Times should seek ways to monetize community. A hopefully less [...]

Leave a Reply




Feed including blog about text analytics, text mining, and text search Subscribe to the Monash Research feed via RSS or email:

Login

Search our blogs and white papers

Monash Research blogs

User consulting

Building a short list? Refining your strategic plan? We can help.

Vendor advisory

We tell vendors what's happening -- and, more important, what they should do about it.

Monash Research highlights

Learn about white papers, webcasts, and blog highlights, by RSS or email.