New York Times joins CNN in dumping paid online subscription model: Who’s next?


In the Internet world of a billion information fire hoses, where you can drink as much as you want anytime you want or drown trying, media giants NY Times and CNN have both dumped the idea of charging online subscription fees to view their “premium” content. In the case of the NYT, that was largely composed of their Op-Ed columns. Last week readers saw an American Express billboard for about 5 seconds, noting their sponsorship of the free content. This week? The billboard’s gone and ads are scattered on the page.

According to Reuters, NYT Web VP and GM Vivian Schiller said “We now believe by opening up all our content and unleashing what will be millions and millions of new documents, combined with phenomenal growth, that that will create a revenue stream that will more than exceed the subscription revenue.”

What can other businesses currently depending on the subscription model for survival learn from those decisions?

First, do the math.

Chances are the paid online subscription model doesn’t pay as well as delivering more eyeballs to advertisers by giving your content away.

The fourth estate learned almost 200 years ago that hooking up advertisers and potential customers essentially paid for their entire intellectual and business overhead. Subscriptions were gravy. The only other advantage I can think of for selling papers was to ensure they got into the hands of folks who cared, could read, and had money to buy things instead of into the hands of people who would use them for bedding.

While I grant that some paid subscription models in the modern world still work—lifestyle pipes like Internet, satellite, and cable TV; lifeline pipes such as phone, water, and electricity—asking users to pay for online content is a gamble, if not an outright turn-off.

Let’s look at CNN, my old stomping ground. Why should I pay to watch CNN’s video online when a) I can get it free from YouTube, Google, or a thousand other local and international outlets that already pay CNN to use their feeds; b) get the same material free, or something much like it, from CNN’s online competitors; c) go to CNN’s source, which in this age of slashed and burned technical budgets is more likely to be APTN or Reuters or a myriad of other providers who now have their own outlets for my viewing pleasure; or D) just turn on the dang TV (I don’t have TV on my PC right now)? It’s not like CNN holds back when they have something interesting to show the world, and neither do any of these other sources of video. So what advantage would a subscription to CNN’s “pipeline” gain me? Nothing worth paying for, as it took CNN several years to figure out.

Second, do it again.

When I recently ran my ideas about the death of paid subscriptions past my boss, Dr. Flint McGlaughlin, he countered it by using the example of an online market still willing to pay for access to the minds of the Wall Street Journal’s editorial staff (though last week the WSJ said Rupert Murdoch is considering giving their 11-year old online version away once he takes over).

Dr. McGlaughlin is right: The business model of a premium audience paying a premium for premium information delivered via a premium channel, for either convenience or before “others” get it, can still work. Look at businesses willing to pay for sage advice and respected opinions from the multi-billion dollar consulting industry. So I agree: Businesses and thought leaders will continue to shell out for subscriptions to premium sources of aggregated and filtered research and analysis as long as the source is perceived to convey a distinct competitive or intellectual advantage that free content does not or cannot provide.

Third, ensure you have accurate numbers.

For everyone else it’s purely and simply (hah) a matter of accurately counting eyeballs delivered to your free content and your hosted ads, in all the myriad contexts and permutations of media (online, mobile, viral, social, print, broadcast, etc.) now available, and who the eyeballs belong to. That’s where I’m placing my bet, not on paid subscriptions.

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