• by Gavin O'Malley  @mp_gavin, February 1, 2007

Hiding The New York Times' premium content behind a paid wall could potentially scare off new generations of readers, Nicholas Ascheim, the company's director of entertainment, video and audio products, said Wednesday at the Software & Information Industry Association's Information Industry Summit in New York.

"New generations will never get exposed," Ascheim said during a panel discussion on Web monetization with moderator and MarketWatch columnist Jon Friedman. Although he said TimesSelect had been successful so far, he added that the company still needs "more time to experiment."

Randy Kilgore, fellow panelist and chief revenue officer at video ad network Tremor Media, added that many online publishers struggle to find the right revenue model.

"We see a lot of confusion in the marketplace," he remarked. "We're working with thousands of sites with tons of video, but without a clear strategy of how to monetize."

The afternoon panel--which took place the same day that the Times Co. released fourth-quarter earnings--was titled "Multimedia Monetization: Business Models in a Broadband World." Yet according to Ascheim, the Times' top priority at the moment is not money, but cultivating readers. "The strategy is to build an audience."

"I think we're only 5% down the road," said Ascheim, speaking generally about the growth potential of "content and the audience around it."

For the time being, at least, things seem to be moving in that direction. For the fourth quarter, the Times Co.'s online revenue grew 42% to $84.8 million from $59.7 million in the fourth quarter of 2005. For the full-year 2006, Internet revenues rose 41.2% to $273.9 million from $193.9 million in 2005. (Excluding an additional week in the quarter, Internet revenues grew 35.3% in the fourth quarter and 39.2% for the full year.)

In total, the Times Co.'s Internet businesses accounted for 9.1% of all revenues in the fourth quarter, versus 6.7% in the fourth quarter of 2005. For the year, Internet revenues accounted for 8.3% of total revenues compared with 6% in 2005.

The Times' Internet businesses include its digital archives, NYTimes.com, Boston.com, and About.com, along with Web sites of other newspaper properties.

Late last year, the Times reported that TimesSelect had brought in roughly $6 million in revenue since its launch in late 2005, and attracted 198,690 online subscribers. Those nearly 200,000 consumers represent 37% of the total TimesSelect audience--the majority made up of paying print subscribers.

As for this year, the Times said it expected revenues from Internet-related businesses to grow approximately 30%, or $350 million--mainly from organic growth.

In addition, Times readers will get the opportunity to contribute their own content to NYTimes.com in the very near future, said Ascheim, noting the benefit of user-generated media to the bottom line. "Using consumer content is interesting, because it allows you to increase content without cost," he said.