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:
- Longer versions of a story than were put in the main product
- Observations — perhaps in blog form — that never made it into actual stories
- More photos than made it into a story (although I don’t think of photos as a “Grey Lady” strength)
- Some kind of direct communication with reporters.
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:
- Sports (national sports news with a strong local bias)
- Art (museums and commercial galleries both)
- Fine dining
- Food (home-prepared)
- Hyperlocal politics and business
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:
- Online or offline events — chats, lectures, whatever.
- Books, etc. — it is already common for major news publications to pursue this strategy to the best extent they can figure out.
- T-shirts/tote bags/coffee mugs — probably not a large revenue line in itself, or a large incentive for a subscription to some more general premium service. But hey, it’s some revenue, which amounts to people paying you for the privilege of advertising their fondness for your product.
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.