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New York Times Assumes Leadership In Electronic Journalism Business Model

This announcement allows us to begin the thought process that’s going to answer so many of the questions that we all care about. We can’t get this halfway right or three-quarters of the way right. We have to get this really, really right.

Arthur Sulzberger Jr.

Publisher, The New York Times

Times Square

Restoring Sanity To Journalistic Enterprise

Reality Over Illusion

There are only two possible payers for journalistic endeavors: Advertisers and Consumers.

We know this to be true because that’s how responsible, probative and relevant journalism survived for the last century.

The notion that news ought to be free simply because it is no longer a physical product was irrational and foolish.

Still, many in the news business got caught up in the excitement of a new and largely misunderstood medium.

Absent either experience, or clear thinking, and driven by sheer panic at the possibility of being left-out, newspapers made immensely damaging decisions from which many will never recover.

On January 20, 2010, the New York Times said it was reevaluating its Internet business model. For many in electronic publishing, the Times announcement has the feeling of a much needed breath of fresh air — for it suggests that reality has finally won out over illusion amongst the owners and publishers of this nation’s newspapers. The reality is that the Internet audience is neither homogeneous nor nondiscriminatory when it comes to information quality and credibility.

In plain language, The Times gets it!

Temporal Today, Archival Tomorrow

Thus ends the illusion that news consumers prefer junk-news that is free over what’s relevant and probative. By failing to separately address the needs of news consumers from those of specific content seekers, the free content business model, supported only by advertising, traded popularity numbers for journalistic excellence.

If the New York Times online model being prepared for launch sometime next year seems to fly in the face of common sense it is not because the Times doesn’t understand the Internet for it clearly does. The delivery of expository journalism and news via the Internet neither killed off, nor replaced the newspaper business model that thrived in the 20th century.

To the contrary, those who know the Internet best already understand that the digital distribution system augments and extends the newspaper model. The truth to such an assertion derives from the fact that that there are two very different audiences for online news and information — while only one was fully served by the free content business mode.

Probative Content: Inherent Value

The pay-for-news model that undergirded the world’s  newspapers for the last century is neither out of date nor inappropriate to electronic  journalism. The notion that everything published on the Internet ought to be free assumes that all content is of equal value. The result if a plethora of free content that is devoid of substantive value.

Paying for access to news content is thus essential to both consumer and publisher. While reader subscriptions are a second, but critical income stream to publishers, paying a modest subscription fee, like purchasing a favorite print newspaper, incentivizes  collection, editing and publishing of  credible, relevant and probative content.

There are some problems to such a simple model due to the one area where Internet publication and print publishing do not overlap: residuals.

From Morgue To Residuals

And just what are residuals? For newspaper people it was always called the morgue — the place all journalism ended up the day after publication. But for Internet users, residuals are articles or information you find by search engine links to materials usually, but not always, previously published.

While most Internet publications ( including Newsroom Magazine ) are organized specifically for Internet access, traditional publications, including newspapers, have always been organized for serially-published, subscription access. The metered access system being considered by The New York Times is thus a significant break from the ill-fated online publishing model that treated all access as archival.

When the New York Times changes over to a bifurcated online publishing model ( subscriber and archival ) its content will be readily available to both audiences. The trick is metering — something central to all Internet services.  On this, the newspaper explained in its Media Decoder area,

The metered model differs from TimesSelect in that it is for the entire site, not just the columnists and archives. TimesSelect grew to 227,000 paying subscribers, but we decided to take down the wall because search was becoming a bigger factor and advertising was more robust. We expect the new metered model to capture both –- allow us to remain a vibrant part of the search-driven ecosystem of the Web, and give us the flexibility to preserve our successful advertising business.

While it is easy to identify and understand the limitations and failures of the unlimited free content model, there has been little consensus in online publishing concerning how legitimate news organizations ought to operate, or differentiate themselves from other sources of information. At the heart of the question is the matter of authority, that is how to identify what is valuable information from what is not. What is most impressive about the metered approach outlined by the Times is that it is centered around the concept of providing easy access for those who mostly use its archival content. But the metered model has other ramifications which bode well for its possible success. There is no hard wall of separation — which reveals a depth of understanding of the issues which has herebefore escaped the online newspaper world.

On this, The Times makes clear the depth of their own learning activity:

We learned a lot from our earlier version of a pay model, TimesSelect. We learned, for example, that people will pay for content online, particularly for a robust package of high quality Times content. We also learned that you have to carefully weigh the benefits of an advertising and a subscription model. And we learned that many NYTimes.com users believe what differentiates us is our journalism, the depth and breadth of our reporting and analysis.

Times Online

The New York Times online edition is said to be the world’s largest online publication with some 17 million visitors a month. It once offered its full online service only to subscribers to its $50 a year Times Select service. Then, when the Washington Post and other newspapers pursued the free access model in 2007, the Times ended its Times Select service to pursue what was supposed to be advertising driven news publication.

Today, only two major news publications charge for unlimited online access. One, The Wall Street Journal, is accessible only to subscribers, while The Financial Times, offers free access to about 10 articles a month. It is the mixed subscription model that appears to be under consideration by The Times because it permits some free access to bolster advertising revenue as well as paid subscription access for those willing to pay for unlimited access.

Like Newspapers, Online Publishing Has Two Audiences

All online publications, including Newsroom Magazine, have two distinctly different audiences. One, the smaller overall audience, is comprised of RSS subscribers and other regular readers. The second, is a substantially different audience to the degree that it is comprised only of directed traffic, that is readers who visit the publication for a specific article after which they leave the site. Directed readers, as they are called, arrive from search engine listings, email links, or hyperlinks from other publications that link to one specific article.

Regular readers, on the other hand, those the New York Times would charge for access, arrive largely on the home page. For regular readers, the Times Online service has the look and feel of a newspaper, while for directed readers, the item of interest is more like a WikiPedia article, that has the qualities of being one isolated piece from an immense database.

Rethinking The Obvious

For some, the New York Times decision to return to something closer to its original paid-content model has the feeling of clear thinking on a subject long driven by irrational hysteria. At its core is a reasonable and rational approach to the ultimate question in on-line journalism: Who shall pay the cost of news-gathering?

Both question and answer are simple, but you’d not know it based on the recent history of newspaper publishing. Perhaps Times publisher Arthur Sulzberger Jr. might have made a better decision five years ago had not the Washington Post bought into the foolish notion that you can give away what’s costly to produce and still make money.

Free News Isn’t Worth What You Pay For It

The Post was not alone in choosing to believe Internet enthusiasts who claimed that the Internet was only about free, not value, but it was the Post’s decision to publish free content that drove the Times decision to abandon it’s paid  Times Select service.

For many, last year’s decision by The Christian Science Monitor to go all on-line, entirely free and without obvious diminution of content breadth or quality, smacked of insanity when so many newspapers — worldwide — were on the brink of financial catastrophe.

New Occasions Teach New Duties

Driven, in part, by panic and disbelief at the suddenness of collapse in newspaper readership most but not all print-media publications made wrong decisions. While some, including Sam Zell, the man who effectively stole the Chicago Times newspaper group, said that traditional newspaper publishers were too stupid to survive.

Zell has yet to prove his own publishing capabilities, but his takeover of the Chicago Tribune gives evidence of the immense pressures on established newspapers caught between the cost of legitimate journalism and the uncertainty of ongoing advertising revenues. Before departing his managing editor role at Sam Zell’s the Los Angeles Times, James O’Shea described the newspaper industry as being hostage to a pervasive culture of defeat.

Today, there is good reason to believe that the decisions being made by the New York Times about its own future, both online and in print, are clear and convincing evidence that defeatism in the newspaper business is on the wane.

Jeffrey Slee contributed to this article