The New York Times announced the shuttering of its online subscription service, TimesSelect. The obvious question: is this the end of the paid-for online model altogether? How will the Wall Street Journal’s (WSJ) website, the Web’s largest paid-for subscription website, react? The Editors Weblog collected the insight of media analyst Philip Stone, Ali Rahnema, Corporate Development Director at the Irish Times, and Daniel Bernard, General Manager of WSJ Online.
The New York Times website once again had the largest traffic among US newspapers during the month of August, with over 13 million unique visitors. It also led websites for time spent per person, with nearly 24 minutes spent on site on average. Will these numbers increase with the removal of the paid wall?
To catch up on the story of the removal of TimesSelect, read the background facts here.
Is this the end of the online paid-for model?
“I don’t think so,” says Rahnema.
The Irish-Times has also had a successful online paywall for a few years, which accounts for a significant share of its one million monthly visitors. “From a point of principle, the kind of content you can’t get anywhere else has value.”
“While recognizing that news is commoditized, the rest of what we do is not,” and thus has value, says Rahnema. So while he agrees that still “charging for news is a little bit silly,” content from the daily newspaper, archives and columnists are to remain behind the paywall.
At the same time, Rahnema acknowledges that the Irish Times’ market is specific. With a small inside market and a large share of readers outside of Ireland, hungry for community-related news, Ireland.com can provide content at €79 per year while “maintaining the balance of audience potential and revenue potential.”
According to Philip Stone, the decision to take down TimesSelect was “all in the hands of the accountants.” Last week, The New York Times stock hit a 10-year low. Market conditions gave no choice to NYT Chairman Arthur Sulzberger and CEO Janet Robinson, who personally might have favored TimesSelect.
What this really means is that “the accountants figured out that there was more money to be made by selling that space to advertisers” than through online subscriptions.
“It proves that on the Web the subscription model for newspapers is not as advantageous as the print model,” says Stone.
In other words, The New York Times hopes to make at least $10 million annually through new advertising on its previously restricted pages.
This view isn’t shared by WSJ.com. The Journal’s website, with 983,000 paid-for subscribers, is the Web’s largest paid subscription website (FT.com reportedly has some 97,000 subscribers). At this point, The Wall Street Journal is also among the few remaining US newspapers to maintain its paywall. It has promoted the model since its launch and seems satisfied with its hybrid model split between open and premium content.
“We found a really good balance with the hybrid model,” says Bernard. In the Journal’s case, its core content is positioned as “a must-read for business professionals,” while its open pages cater to a more general audience and give incentives to subscribe. Perhaps this is the significant difference with the NYT that explains why WSJ.com’s paid-for model works: “(our) readers are executives seeking to improve their businesses,” says Christine Mohan, Director of Public Relations at WSJ Online.
The price of an online subscription may seem like a trifle to Wall Street execs and big business leaders, if they can get content that will help them grow their business. This may not have been the case for the average Times reader, however much he or she appreciated the Times’ columnists.
Like the Irish-Times, WSJ.com doesn’t ignore the importance of sustaining general traffic and visibility. Concerned with search engine visibility – one of the reasons the Times removed TimesSelect – WSJ.com relaunched its non-subscriber homepage with additional free content. So users can access two-paragraph-long teasers of the Journal’s articles through search engines. The Journal has also generated more open content recently, including a small business Entrepreneur channel and additional personal finance pages. Its mobile services, blogs, videos and podcasts are also all free.
Quite frankly, with such a large pool of online subscribers and with annual subscriptions costing $99 , it would hardly be imaginable that WSJ.com replace its entire subscription revenue with online ad revenue… in the short term. In the long run, Rupert Murdoch, the new owner of Dow Jones, publisher of WSJ, alluded to the benefits of an entirely free WSJ.com. Update: hours after the Times' announcement, Murdoch reiterated his wish to take WSJ.com free. According to him, the site would generate more revenue globally if its entire content were free.
So the paid-for online model isn’t dead – for all newspapers. In the case of the Wall Street Journal and the Irish Times, their paywalls have served to safeguard their valued content and have been successful because of their specific audiences and markets. But for other general news newspapers, battling in a competitive inside market, there is more money to be made from a free, advert-driven model than from online subscriptions.
Will the removal of TimesSelect prompt similar moves at other newspapers?
Although he can’t say for sure, Stone predicts that newspaper websites that still have online paywalls, such as FT.com and WSJ.com, will “open up more and more.”
According to Bernard though, the Times’ decision isn’t about to change WSJ.com’s business model. Although Bernard acknowledges that the WSJ will keep an eye on the Times’ own evolution, “I don’t think it’s influenced our policy,” he says.
In the foreseeable future, there will certainly still be paid-for content on the Irish-Times website too, says Rahnema. But he will also closely be watching how the Times plans to replace its $10 million revenue in subscriptions through online advertising. And Ireland.com has tended to evolve towards free content over the years. Initially, the paywall covered the entire website. Now, a good share of content is free, including breaking news, blogs, and online services offered by the newspaper.
In the digital age of free news, it will be increasingly harder for content providers to generate revenues by making users pay for their product. On the other hand, there will always be specific or niche audiences that are ready to pay to access exclusive content. The question will be whether the price these audiences are willing to pay can sustain the gathering of such exclusive materials, on a regular basis.
Take a look at Stone’s Follow the Media, which will report on TimesSelect tomorrow, along these lines: if you can read for free on the Web, why would readers pay for print? Click here to view the article.
You can also track the history of TimesSelect by looking it up in our search function.
Can TimesSelect, and newspaper subscriptions in general, last?
TimesSelect shuts out NYT columnists from the online conversation
Paid Sites Seem Less Likely As TimesSelect Exits (Editor & Publisher - Joe Strupp)
Source: interviews with Daniel Bernard, General Manager WSJ Online – Catherine Mohan, Director Public Relations WSJ Online - Ali Rahnema, Corporate Development Director, Irish Times - Philip Stone, Follow the Media