Online advertising triumps at New York Times

By pandu

The New York Times reported today that it would abandon paid access to certain parts of its online content and make the entire online edition accessible for free. The paid access service  called TimeSelect had been introduced in 2005, wherein for $7.95 per month, subscribers would get access to the editorial and columnists opinions along with NYT archives. The columnists’ content were indeed premium and I had subscribed to it for a few months in 1996. But the problem was that the monthly subscription price seemed too steep. While I lamented losing access to Tom Friedman’s brilliant columns, $7.95/month just did not seem like a good value. Besides, I was still able to read most other parts of NYTimes for free anyways.

TimeSelect generated $10 million in yearly revenue but it is obvious that the advertising model has clearly triumphed the subscription model. The only newspaper to stick to a full  subscription model – The Wall Street Journal generates $65 million a year in subscription revenue – a paltry sum compared to the potential revenue from online advertising.

The Times generates 13 million unique visitors a month, the largest of any US newspaper. Opening up the rest of the Times content is a good move. At the very least it will prevent the loss of visitors to other recent news mediums such as blogs. It will also likely increase visits and page impressions, which can only boost online advertising.

The subscription model will not work online. The only other paid model that has potential is that of micro payments – similar to the way Apple has implemented with ts iTunes service – charging 99 cents per song. This model should be tweaked further to distinguish between good and bad songs, but something similar could be implemented for online content. Can micro-payments surpass online advertising? That remains to be seen.