Posted by: Tony Carson | 19 September, 2007

Newspapers: to charge or not to charge

The New York Times packed-in its TimeSelect and Murdoch is giving a re-think to the Wall Street Journal firewall. Is premium content over? It seems, it is, for now. Here’s why:

For the New York Times, which launched TimesSelect in 2005, the service appeared to outsiders as successful, drawing more than 200,000 online-only subscribers and nearly $10 million in annual revenue.

Still, bean-counters determined that the loss of online users, the key element in Web advertising, was not worth it. “The downside was that we could make more through an advertising model,” said Times spokeswoman Diane McNulty. “Our unique users are increasing rapidly.”

McNulty also pointed to the increased use of search engines that direct traffic to the site, raising the potential for an online audience and, eventually, increased online revenue.

“The idea is to focus online on advertising revenue,” said McNulty. “We will still have subscription efforts that cost money, and revenue to bring in.” She cited the Timesreader service, a downloadable electronic edition, as well as the paper’s crossword puzzle archives, which are available only to subscribers.

“Since the beginning, we have been constantly looking at it and how it works,” she said of the paid approach.

So what does this mean for other newspaper sites? Is the Journal the only paper that can make a paid online model work?

“From the beginning, there has been tension within the industry as to whether to charge,” said John Morton, a leading newspaper analyst. “Free access pretty much won the tension. With so many other locations for newspaper readers to go to, charging just drove people away. Volume of readers is what advertisers pay for.”

Rick Edmonds, a media business analyst at the Poynter Institute, called the TimesSelect shutdown “a fairly significant development. It is a fairly straightforward matter of math, so I accept them at face value,” he added. “They can sell more advertising in this way.”

The full story is at Editor and Publisher, here: Paid Sites Seem Less Likely As TimesSelect Exits

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