Tuesday, August 7, 2007

Vanishing Point: TimesSelect Premium Package May Keep NYT From Higher Ad Revenues

While the New York Post's report on a possible move by The New York Times to sunset its premium TimesSelect online service is still in the rumor mill, the plateauing and gentle decline of Web-only subscribers to the package underscores that general news content is not a likely candidate for online subscriptions. When TimesSelect came out a couple of years back, we noted:
The Times Select model provides temporary bolstering of online and print revenues squeezed from those who need their Op/Ed "fix" of established columnists, but in the long run it isolates these columnists from the media mix that's driving much of the value of online news content today.
This seems to be exactly what has happened. While some NYT columnists behind the TimesSelect firewall still have some influence outside of traditional media channels the deafening growth of social media has drowned out many of their voices - and has helped to amplify the strength of new online opinion-makers. In the meantime the NYTimes has slipped in its overall online rank and reach, emphasizing the need to be able to expose more page inventory to search engines and social media for ad monetization. Once conceived of as the cream of their online content TimesSelect has become more like a pricey version of Slate, an online general-interest news magazine which long ago abandoned premium pricing to capture online market share.

While specialty publications like The Wall Street Journal have enough focus and demographic cachet to benefit still from a premium pricing strategy the huge projected growth for online ad spending argues strongly for traditional news organizations with far broader reader demographics becoming far more efficient in exposing both current and archived general news content online as aggressively as possible. As pointed out by Read/Write Web, though, much of the growth in online ads will go to social media sites which do very well with highly targeted contextual ad buys from Google's AdSense and other contextual ad services.

In other words if the readership is going online and online advertising is becoming far less about broadly based selling and far more about selling in microcontexts then the future of news organizations like The New York Times is to get their content into those microcontexts as efficiently as possible. This may still leave room for some premium components, but it's likely to be a set of components built around social networking. Rather than viewing social networking as a dangerous marketing environment, many context-driven marketers are learning how to exploit social media fairly effectively. While major brand advertisers are still nervous about committing their brands to social media it's where the eyeballs are - and it's where news has to prove itself as being able to provide an effective context for marketing.

It's likely that there will be some residual TimesSelect premium package for some time, perhaps built up around a new type of social media experience that allows for more conversational interaction with the news and editorial staff, but the bulk of TimesSelect content is likely to be put out to general ad exposure by year's end. While this may not slow the decay in online readership at "premium" news publications such as the NY Times it will be likely to provide short-term ad revenues more quickly to help fill the gap left by rapidly declining print revenues. So think of the potential fading away of TimesSelect from the NYT perspective as more of a stopgap measure that acknowledges well-established changes in the online ad marketplace.

Unless newspapers can define truly elite communities that will benefit from premium subscriptions there's little reason to think that the failure of the TimesSelect experiment should spell out anything less than the official death of the online premium model for general interest publications. The long-standing relationships between editorial operations and audiences have changed fundamentally but traditional news organizations have moved at the most ponderous of paces away from being isolated teams of experts to acknowledge and adapt to the new conversational world of news-making. Here's hoping that The New York Times can now focus on engaging their audiences more effectively in the contexts that matter most to them.
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