Thursday, November 17, 2005

Early Returns on Times Select Project on High End of Expectations

Joseph Nocera writes for The New York times on the progress of the Times Select premium subscription project - ironically a Times Select offering, so if you aren't signed up for it you won't get the insights. The project has already attracted more than 270,000 subsribers to the premium content, half of which were not already subscribers and therefore providing a net gain of revenues. The Times' Martin Nisenholtz sees this "at the high end" of expectations, according to the article. The "bait" for this exercise is content from popular New York Times columnists, along with the other premium items, some of which are exclusive to online subscribers and heavily promoted in the paper. It's a good model in most ways, but the inclusion of the columnists, although necessary in the beginning to attract ad dollars to a significant audience, will remain the plan's long-term vulnerability. People will pay $200 a seat to see Celine Dion in Las Vegas - reluctantly, since it's the only venue where she can be found - but exclusivity doesn't necessarily improve your visibility.

More to the point it's unclear whether this new model will be able to fund improvements to basic news coverage, the area in which newspapers are cutting back most drastically these days. Nocera points to research by a Citigroup analysis which suggests that only a third of ad revenues coming out of print make their way into online revenues. Online ad rates are showing signs of increasing, which may allow revenues to catch up in time. But like television news organizations that pared editorial capabilities back to the point where they are mostly "infotainment" outlets, newspapers are on the same track towards de-funding their core capabilities. The Times, by virtue of its aggressive moves into new online business models, may yet escape this fate by using "infotainment" revenues to fund hard news gathering, but the inevitable decline of columnists behind a paid subscription barrier tends to argue against it in the long run. Valuable premium content needs to thrive on its own virtues, but hopefully the Times can leverage these columnist-inspired revenues to beef up other more long-lasting virtues more central to its mission.
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