'New York Times': Pay Walls Mean Dual Rev Stream

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New York Times Publisher Arthur Sulzberger, Jr. indicated Friday that the paper's coming pay wall for its Web site is more about future-proofing than making an impressive profit on day one.

"We believe this is where our world is going, and we want to lead it," he said at a PaidContent event in New York.

Sulzberger, who is also chairman of the Times Co., reiterated that many specifics around the pay model -- set for 2011 -- are yet to be decided. And, even when the cash register starts ringing, the paper will have to be nimble and willing to adjust.

"Test and learn ... this is a journey," he said.

The Times site has been entirely free since it launched, with the exception of initiatives to charge international readers and TimesSelect, both later abandoned. Under TimesSelect, people had to pay to read columnists and editorials from 2005-2007.

That scotched program has been derided as an example of why newspapers won't be successful with pay walls. But Times Co. CEO Janet Robinson said Friday: "It was not a failure."

Home subscribers to the Times did not have to pay for TimesSelect. And Robinson said many appreciated the special access.

She also said it provided learnings in e-commerce and technology -- and enough people did take advantage to prove that users will pay for online content.

Sulzberger said TimesSelect was profitable, but executives felt more money could be made from selling advertising around the columns than from subscription fees. "We simply knew we could make more by taking it down," he said.

Martin Nisenholtz, head of digital operations at the Times Co., said that ultimately, the pay model will provide the paper with a critical dual revenue stream. A fully ad-supported business is "unsustainable," since it is subject to "recessionary" pressures driving down ad costs.

The company does not break out revenues for NYTimes.com, but said Internet ad dollars for its news media operations were down 11% to $179 million in 2009.

Nisenholtz appeared at the PaidContent event on a panel with Sulzberger and Robinson. He said the paper has done extensive research showing that a "sufficient number" of readers are willing to pay for content. It will be "a viable model," he said, and the expectation is that ad dollars will even grow.

Nisenholtz added that the Times does not intend to erect impenetrable walls that prevent people from accessing content through a "side door," which could include a search engine or link propagated by a social media site.

Nisenholtz said 60% of readers come to the site directly through the home page, which is the audience the company is looking for to pay the fee. Subscribers to the print version of the Times -- even just for one day a week -- will have free access to the Web site. Nisenholtz said the Times does intend to place its expanding roster of blogs behind the wall.

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0 comments on "'New York Times': Pay Walls Mean Dual Rev Stream".

1. Jonathan Mirow from BroadbandVideo, Inc.
   

   commented on: February 22, 2010 at 12:35 p.m.

   TimesSelect (pay system) - But Times Co. CEO Janet Robinson said Friday: "It was not a failure." Ok, then why did they stop charging? If it was making money and people were happy paying, then it would be a success, if people didn't like it and didn't pay - then it would be a failure. If it was a success, it would still be there and people would still be paying. Not rocket science, people. Nobody is going to pay for online newspapers, no matter how the CEO spins it.

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