No matter which end of the spectrum the new I-Pad falls -- on the laptop or smartphone extremes -- is a moot point. Platform is not the decisive factor for people. Everyone will have their favorite platform. It's getting the news and advertising that you want on that platform you've chosen that's important. The corollary, individuated media (news and advertising you've chosen) must be available on all platforms. That's today's digital liberation.
(full text from NY Times)
SAN FRANCISCO — After months of feverish speculation, Steven P. Jobs introduced Wednesday what Apple hopes will be the coolest device on the planet: a slender tablet computer called the iPad.
The Takeaway With Nick BiltonFor all the hoopla surrounding it, however, the question is whether the iPad can achieve anything close to the success of the iPhone, which transformed the cellphone and forced the industry to race to catch up.
Apple is positioning the device, some versions of which will be available in March, as a pioneer in a new genre of computing, somewhere between a laptop and a smartphone. “The bar is pretty high,” Mr. Jobs acknowledged. “It has to be far better at doing some key things.”
Half an inch thick and weighing 1 1/2 pounds, the device will vividly display books, newspapers, Web sites and videos on a 9.7-inch glass touch screen. Giving media companies another way to sell content, it may herald a new era for publishing.
But the iPad, costing $499 to $829, also lacks some features common in laptops and phones, as technology enthusiasts were quick to point out. To its instant critics, it was little more than an oversize iPod Touch. A camera is notably absent, and Flash, the ubiquitous software that handles video and animation on the Web, does not work on the device.
Another thing missing is an alternative to the AT&T data network, which is already buckling under the strain of traffic to and from iPhones. Some versions of the iPad can, for a monthly fee, use a 3G data connection like cellphones, but the only carrier mentioned was AT&T.
The event, in typical Apple style, was tightly scripted and heavy on theatrics and hyperbole. But the success of the iPhone, and the hive of rumors and leaks surrounding the iPad, raised expectations and made this perhaps Mr. Jobs’s most highly anticipated product unveiling yet.
It was one that he clearly cared deeply about. Mr. Jobs, a consummate showman, presented the iPad to an enthusiastic crowd of around 800 employees, business partners and journalists, some of whom shoved their way in when the doors opened to grab the best seats. It was only his second public appearance since a leave of absence for health reasons last year.
Mr. Jobs posited that the iPad was the best device for certain kinds of computing, like browsing the Web, reading e-books and playing video.
The iPad “is so much more intimate than a laptop, and it’s so much more capable than a smartphone with its gorgeous screen,” he said in presenting the device to a crowd of journalists and Apple employees here. “It’s phenomenal to hold the Internet in your hands.”
One question Apple faces is whether there is enough room for another device in the cluttered lives of consumers.
“I think this will appeal to the Apple acolytes, but this is essentially just a really big iPod Touch,” said Charles Golvin, an analyst at Forrester Research, adding that he expected the iPad to mostly cannibalize the sales of other Apple products.
Mr. Golvin said book lovers would continue to opt for lighter, cheaper e-readers like the Amazon Kindle, while people looking for a small Web-ready computer would gravitate toward the budget laptops known as netbooks.
But other analysts say they have heard similar criticism before — once aimed at the iPhone, which has now been bought by more than 42 million people around the world. These believers say Apple’s judgment on the market is nearly infallible.
“The target audience is everyone,” said Michael Gartenberg, vice president for strategy and analysis at Interpret, a market research firm. “Apple does not build products for just the enthusiasts. It doesn’t build for the tens of thousands; it builds for the tens of millions.”
Apple says the iPad will run the 140,000 applications developed for the iPhone and the iPod Touch, but the company expects a new wave of programs tailored to the iPad.
One of the most significant applications for the iPad may be Apple’s own creation, called iBooks, an e-reading program that will connect to Apple’s new online e-bookstore.
Mr. Jobs said Apple so far had relationships with five major publishers — Hachette, Penguin, HarperCollins, Simon & Schuster and Macmillan — and was eager to make deals with others. Publishers will be able to charge $12.99 to $14.99 for most general fiction and nonfiction books.
Apple’s announcement that it was diving into the growing e-book business put the company on a collision course with Amazon. Mr. Jobs credited Amazon with pioneering e-readers with the Kindle but said “we are going to stand on their shoulders and go a little bit farther.”
John Doerr, a Silicon Valley venture capitalist who serves on Amazon’s board and is also an adviser to Apple, said there could be room for both companies, noting that Amazon sells many books to iPhone owners who use its Kindle application, which will also work on the iPad.
“I don’t think Jeff Bezos is going to leave the e-book business,” he said, referring to Amazon’s chief executive, “and I don’t think it will be confined to the Kindle.”
Three models of the iPad, $499 to $699, will connect to the Internet only via a local Wi-Fi connection. Three other versions will include 3G wireless access and will be available later in the spring, costing an additional $130 and requiring a data plan from AT&T. Owners of the iPhone who already pay at least $70 a month to AT&T will not be getting any breaks.
Other companies have sold tablet computers for years, but they never caught on with consumers. In 2001, Bill Gates predicted at an industry trade show that tablets would be the most popular form of PC sold in America within five years.
“The fact that he and Microsoft didn’t deliver is surprising,” said Tim Bajarin, a longtime industry analyst. “It has taken Apple to bring this to consumers and make it work.”
Apple has been working on a tablet computer for more than a decade, according to several former employees. Improved technology has helped the company to finally bring a model to market, as has the ubiquity of wireless networks.
The success of the iPhone and its cousin, the iPod Touch, have shown a path for tablets. People have been willing to pay to customize those devices with applications, turning them into video game machines, compasses, city guides and e-book readers.
The iPad will be a big opportunity for software developers, said Raven Zachary, president of Small Society, an iPhone development company based in Portland, Ore. “Although I think some of us were a bit surprised we only have 60 days until it launches to develop for it.”
Thursday, January 28, 2010
Monday, January 25, 2010
So the numbers don't "ad" up
Since when do numbers point the way?
The New York Times would sacrifice traffic and clout for a charge for content that won't replace the loss of advertising revenue caused by the fall-off in traffic and clout. That's what the numbers say, according to several reports.
But no one is talking about the value of choosing your news -- of Individuated Media -- which is a part of this equation. Through metering you are helping people choose their news and only charging them as they gain momentum. Ingenious.
Running the numbers on the NYT paywall
Jan 20, 2010 21:54 EST
By Felix Salmon, Reuters
Apologies for being something of a one-trick pony today, but reading John Gapper’s column on the NYT paywall makes me realize that a lot of people fail to appreciate exactly what’s at stake here. Gapper seems to think that online subscription revenues can make newspapers profitable again; they can’t. In fact, insofar as the paywall makes any sense at all, it does so only as a tool to boost print subscriptions.
Gapper notes that the Guardian’s parent company lost $93 million in the last fiscal year, despite having a website attracting 35 million unique visitors globally, and 13 million domestically. He reckons that charging some of those subscribers could make the Guardian’s problems disappear:
Outsell, a research group, reported this week that only 6 per cent of US online readers say they would pay online news sites if they charged.
If we are to take the figure at face value (which I don’t think we should), then The Guardian could get 2.1m people to subscribe to it online, making it highly profitable at a stroke.
The logical flaws here are huge. Let’s just count a few:
•Gapper is assuming that if 6% of online readers would end up subscribing to some site or other, that’s the same as saying that any given site can persuade 6% of its readers to subscribe. But that’s not the same thing at all.
•Gapper is taking a poll of US internet users, who are more likely to pay for things online than other nationalities, and extrapolating the numbers globally.
•Gapper is assuming that foreign readers (say, Guardian readers in India) are just as likely to subscribe as domestic readers (Guardian readers in the UK).
•Gapper is assuming no overlap at all between the 6% of readers who would pay online, and the percentage of readers who already pay for a newspaper subscription in print form. The NYT has already said that its print subscribers will get an online subscription for free, and I’m sure the Guardian would do likewise.
•Gapper is ignoring that putting up a paywall will always reduce advertising revenue, which means that in order for the new subscription revenue to make the newspaper “highly profitable at a stroke”, it would have to not only make up existing losses but also cover the drop in online advertising revenue.
Once you understand what Gapper can do to statistics like these, then, it becomes a bit easier to make sense of something like this:
Rates for online display ads have been falling steadily as competition has proliferated, with most sites now finding it hard to get more than $4 per 1,000 impressions on their pages (or $14m for the 3.5bn hits on all US newspaper sites monthly).
I have no idea where Gapper’s getting his $4 CPM figure from, but it’s clearly much closer to being a minimum than an average. Papers might find it hard to get more than that, but you can be sure that the NYT, for one, is succeeding all the same. In fact, the WSJ reports today that nytimes.com is pulling in $100 million in revenues annually — more than you might think the US newspaper industry as a whole was making, if you read Gapper too literally. Indeed, in the third quarter of 2009, the New York Times Company made $79 million from its internet businesses, of which $68 million came in advertising revenues. Newspaper advertising was $39 million — and that was in a very weak quarter. On an annual basis, I’d be surprised if nytimes.com didn’t make significantly more than the $100 million that the WSJ is talking about.
It’s also worth noting that Gapper has managed to confuse CPMs — the amount of money that an advertiser pays per 1,000 pageviews — with RPMs, or the amount of revenue that a publisher receives per 1,000 pageviews. There’s nearly always more than one ad unit per page, which means that RPMs are some multiple of CPMs, depending on how much of a newspaper’s inventory is sold.
Gapper, then, is systematically overestimating the upside of subscription revenues, while underestimating the magnitude of advertising revenues. Erick Schonfeld, by contrast, is much more realistic, concluding that total subscription revenues from nytimes.com would optimistically reach only $9 million per quarter, or $36 million per year. With the New York Times Company making the best part of $300 million a year from online advertising, it’s hard to see that the extra revenue boost would really be worth it.
The point here is that with the powerhouse nytimes.com site front and center, the New York Times Company as a whole is a major online media player, serving up billions of high-prestige pageviews and building strong relationships with every major online advertiser and media buyer in the country. Even under the most optimistic scenario, a majority of the NYT’s loyal readers will desert it when it moves to a paywall. And with those readers gone, media buyers are by no means guaranteed to stick around.
Gapper makes great play of the fact that websites can target ads more accurately when readers are registered, but you can’t target ads at readers who no longer exist. And the NYT is a mass-market general news publication: it’s not the kind of place where high-end business-to-business advertisers will pay $90 CPMs to reach C-suite executives. Or if it is, the numbers involved would be so small that they wouldn’t make a visible dent in its overall online advertising revenues.
What’s a realistic number for how many people will pay to subscribe to nytimes.com? David Carr says that the NYT wants to target “10 percent or so” of the 17 million current readers of nytimes.com. That’s 1.7 million people. Subtract the print subscribers who will get nytimes.com for free, and you’re left with 1 million, more or less. How many of those could you dare hope to persuade to subscribe? One third? Once again, just as Schonfeld did, we get to somewhere in the region of $35 million a year, assuming a subscription price of $100 each per year. For a company with annual revenues in the billions, the hit to the value of the brand alone has to be bigger than that.
There is one other dynamic at work, here, however, and that’s the price of the print subscription, which has proved to be surprisingly inelastic: David Carr in fact lauds the way in which “The Times has shown a great ability to leverage prices once they have custody of a consumer”. But pushing existing consumers to the limit of what they can pay only makes it that much harder to attract new ones.
The NYT aspires to be a national paper, which makes sense, since it either already has or is never going to get most New Yorkers as print subscribers. But the annual subscription rate, if you live at say 1600 Pennsylvania Avenue, is $769.60, and it’s really hard to get people to pay that kind of money, in the middle of a recession, for a newspaper they’ve lived happily without for all their lives, and which they can get online for free.
So I see the decision to implement a paywall not as an attempt to build a significant revenue stream for the website alongside ad revenues, but rather as an attempt to shore up — and maybe even increase — the print subscriber base. Even a Monday-Friday subscription, at $384.80 a year, brings in much more money than any online subscription ever will. Yes, it probably costs more than that to print and deliver the paper. But for the time being at least, print advertisers are still willing to pay top dollar for a full page in the physical New York Times. And so long as that’s the case, the NYT will do anything to keep its physical circulation numbers as high as it can — even, it seems, if that means dealing a serious blow to nytimes.com.
The New York Times would sacrifice traffic and clout for a charge for content that won't replace the loss of advertising revenue caused by the fall-off in traffic and clout. That's what the numbers say, according to several reports.
But no one is talking about the value of choosing your news -- of Individuated Media -- which is a part of this equation. Through metering you are helping people choose their news and only charging them as they gain momentum. Ingenious.
Running the numbers on the NYT paywall
Jan 20, 2010 21:54 EST
By Felix Salmon, Reuters
Apologies for being something of a one-trick pony today, but reading John Gapper’s column on the NYT paywall makes me realize that a lot of people fail to appreciate exactly what’s at stake here. Gapper seems to think that online subscription revenues can make newspapers profitable again; they can’t. In fact, insofar as the paywall makes any sense at all, it does so only as a tool to boost print subscriptions.
Gapper notes that the Guardian’s parent company lost $93 million in the last fiscal year, despite having a website attracting 35 million unique visitors globally, and 13 million domestically. He reckons that charging some of those subscribers could make the Guardian’s problems disappear:
Outsell, a research group, reported this week that only 6 per cent of US online readers say they would pay online news sites if they charged.
If we are to take the figure at face value (which I don’t think we should), then The Guardian could get 2.1m people to subscribe to it online, making it highly profitable at a stroke.
The logical flaws here are huge. Let’s just count a few:
•Gapper is assuming that if 6% of online readers would end up subscribing to some site or other, that’s the same as saying that any given site can persuade 6% of its readers to subscribe. But that’s not the same thing at all.
•Gapper is taking a poll of US internet users, who are more likely to pay for things online than other nationalities, and extrapolating the numbers globally.
•Gapper is assuming that foreign readers (say, Guardian readers in India) are just as likely to subscribe as domestic readers (Guardian readers in the UK).
•Gapper is assuming no overlap at all between the 6% of readers who would pay online, and the percentage of readers who already pay for a newspaper subscription in print form. The NYT has already said that its print subscribers will get an online subscription for free, and I’m sure the Guardian would do likewise.
•Gapper is ignoring that putting up a paywall will always reduce advertising revenue, which means that in order for the new subscription revenue to make the newspaper “highly profitable at a stroke”, it would have to not only make up existing losses but also cover the drop in online advertising revenue.
Once you understand what Gapper can do to statistics like these, then, it becomes a bit easier to make sense of something like this:
Rates for online display ads have been falling steadily as competition has proliferated, with most sites now finding it hard to get more than $4 per 1,000 impressions on their pages (or $14m for the 3.5bn hits on all US newspaper sites monthly).
I have no idea where Gapper’s getting his $4 CPM figure from, but it’s clearly much closer to being a minimum than an average. Papers might find it hard to get more than that, but you can be sure that the NYT, for one, is succeeding all the same. In fact, the WSJ reports today that nytimes.com is pulling in $100 million in revenues annually — more than you might think the US newspaper industry as a whole was making, if you read Gapper too literally. Indeed, in the third quarter of 2009, the New York Times Company made $79 million from its internet businesses, of which $68 million came in advertising revenues. Newspaper advertising was $39 million — and that was in a very weak quarter. On an annual basis, I’d be surprised if nytimes.com didn’t make significantly more than the $100 million that the WSJ is talking about.
It’s also worth noting that Gapper has managed to confuse CPMs — the amount of money that an advertiser pays per 1,000 pageviews — with RPMs, or the amount of revenue that a publisher receives per 1,000 pageviews. There’s nearly always more than one ad unit per page, which means that RPMs are some multiple of CPMs, depending on how much of a newspaper’s inventory is sold.
Gapper, then, is systematically overestimating the upside of subscription revenues, while underestimating the magnitude of advertising revenues. Erick Schonfeld, by contrast, is much more realistic, concluding that total subscription revenues from nytimes.com would optimistically reach only $9 million per quarter, or $36 million per year. With the New York Times Company making the best part of $300 million a year from online advertising, it’s hard to see that the extra revenue boost would really be worth it.
The point here is that with the powerhouse nytimes.com site front and center, the New York Times Company as a whole is a major online media player, serving up billions of high-prestige pageviews and building strong relationships with every major online advertiser and media buyer in the country. Even under the most optimistic scenario, a majority of the NYT’s loyal readers will desert it when it moves to a paywall. And with those readers gone, media buyers are by no means guaranteed to stick around.
Gapper makes great play of the fact that websites can target ads more accurately when readers are registered, but you can’t target ads at readers who no longer exist. And the NYT is a mass-market general news publication: it’s not the kind of place where high-end business-to-business advertisers will pay $90 CPMs to reach C-suite executives. Or if it is, the numbers involved would be so small that they wouldn’t make a visible dent in its overall online advertising revenues.
What’s a realistic number for how many people will pay to subscribe to nytimes.com? David Carr says that the NYT wants to target “10 percent or so” of the 17 million current readers of nytimes.com. That’s 1.7 million people. Subtract the print subscribers who will get nytimes.com for free, and you’re left with 1 million, more or less. How many of those could you dare hope to persuade to subscribe? One third? Once again, just as Schonfeld did, we get to somewhere in the region of $35 million a year, assuming a subscription price of $100 each per year. For a company with annual revenues in the billions, the hit to the value of the brand alone has to be bigger than that.
There is one other dynamic at work, here, however, and that’s the price of the print subscription, which has proved to be surprisingly inelastic: David Carr in fact lauds the way in which “The Times has shown a great ability to leverage prices once they have custody of a consumer”. But pushing existing consumers to the limit of what they can pay only makes it that much harder to attract new ones.
The NYT aspires to be a national paper, which makes sense, since it either already has or is never going to get most New Yorkers as print subscribers. But the annual subscription rate, if you live at say 1600 Pennsylvania Avenue, is $769.60, and it’s really hard to get people to pay that kind of money, in the middle of a recession, for a newspaper they’ve lived happily without for all their lives, and which they can get online for free.
So I see the decision to implement a paywall not as an attempt to build a significant revenue stream for the website alongside ad revenues, but rather as an attempt to shore up — and maybe even increase — the print subscriber base. Even a Monday-Friday subscription, at $384.80 a year, brings in much more money than any online subscription ever will. Yes, it probably costs more than that to print and deliver the paper. But for the time being at least, print advertisers are still willing to pay top dollar for a full page in the physical New York Times. And so long as that’s the case, the NYT will do anything to keep its physical circulation numbers as high as it can — even, it seems, if that means dealing a serious blow to nytimes.com.
Print growth
Yes, Virginia, there is print growth.
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1004061230
While Newspaper Ad Revenue Plunged, FSI Coupons Hit Record Levels in 2009
By Mark Fitzgerald
Published: January 22, 2010
CHICAGO Even as newspaper advertising revenue was falling off the cliff in 2009, retailers were ramping up their use of free standing insert (FSI) coupon by eye-popping rates, according to the best-known FSI measuring organization, Marx Promotion Intelligence.
In a year when consumers looked for every shopping advantage and traded down in brands and stores, discount retailers greatly increased their buy of FSI pages with coupons.
Dollar General, for instance, increased its number of pages by 386.2% with more than 885 million pages. It was third among the top ten retailers measured by FSI "pages circulated," up from 10th place in 2008.
Family Dollar, which ranked just 17th among retailers in 2008, took sixth place last year with a 227.4% increase in FSI pages.
Target remained the top retailer using FSI coupons, with more than 1.8 billion pages -- up 43.9% from 2008. It was followed by PetsMart,
Dollar General, Walgreens, CVS/pharmacy, Family Dollar, Kroger, Publix, Safeway Food & Drug and Rite Aid.
Overall FSI "coupon activity" measured by the number of coupons dropped grew 8% during 2009 to more than 272 billion, said Marx, a division of TNS Media Intelligence. The 2009 level of activity surpassed the second-highest annual drop of 257 billion in 2007.
Retailer promotion pages also jumped 37.7% to 9 billion pages in 2009, continuing what Marx said has been a pattern of substantial annual growth rates begun in 2007.
"As consumers adapt to new economic realities, marketers are increasing their use of FSI coupons within their marketing mix to deliver advertising impact, influence consumer behavior, and secure retailer distribution and merchandising," TNS Media President Mark Nesbitt said in a statement. "Leading retailers are also increasing their use of FSI vehicles to drive planned shopping trips and build shopper loyalty."
All those coupons in 2009 amounted to consumer incentives delivered by FSI totaling more than $385 billion, a 15% increase from the year before.
The average face value of an FSI coupon increased 6.5% from 2008 to $1.45. But shoppers were hurried to use the coupons, which on average expired in 9.3 weeks, down about 4% from 2008.
This higher face value with a shortened expiration period -- known as the Fuse in the industry -- shows manufacturers are delivering more coupons with higher value, "but are managing their financial exposure by reducing the length of time that these offers are available in the market," Marx said.
--------------------------------------------------------------------------------
Mark Fitzgerald (mfitzgerald@editorandpublisher.com) is editor of E&P.
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1004061230
While Newspaper Ad Revenue Plunged, FSI Coupons Hit Record Levels in 2009
By Mark Fitzgerald
Published: January 22, 2010
CHICAGO Even as newspaper advertising revenue was falling off the cliff in 2009, retailers were ramping up their use of free standing insert (FSI) coupon by eye-popping rates, according to the best-known FSI measuring organization, Marx Promotion Intelligence.
In a year when consumers looked for every shopping advantage and traded down in brands and stores, discount retailers greatly increased their buy of FSI pages with coupons.
Dollar General, for instance, increased its number of pages by 386.2% with more than 885 million pages. It was third among the top ten retailers measured by FSI "pages circulated," up from 10th place in 2008.
Family Dollar, which ranked just 17th among retailers in 2008, took sixth place last year with a 227.4% increase in FSI pages.
Target remained the top retailer using FSI coupons, with more than 1.8 billion pages -- up 43.9% from 2008. It was followed by PetsMart,
Dollar General, Walgreens, CVS/pharmacy, Family Dollar, Kroger, Publix, Safeway Food & Drug and Rite Aid.
Overall FSI "coupon activity" measured by the number of coupons dropped grew 8% during 2009 to more than 272 billion, said Marx, a division of TNS Media Intelligence. The 2009 level of activity surpassed the second-highest annual drop of 257 billion in 2007.
Retailer promotion pages also jumped 37.7% to 9 billion pages in 2009, continuing what Marx said has been a pattern of substantial annual growth rates begun in 2007.
"As consumers adapt to new economic realities, marketers are increasing their use of FSI coupons within their marketing mix to deliver advertising impact, influence consumer behavior, and secure retailer distribution and merchandising," TNS Media President Mark Nesbitt said in a statement. "Leading retailers are also increasing their use of FSI vehicles to drive planned shopping trips and build shopper loyalty."
All those coupons in 2009 amounted to consumer incentives delivered by FSI totaling more than $385 billion, a 15% increase from the year before.
The average face value of an FSI coupon increased 6.5% from 2008 to $1.45. But shoppers were hurried to use the coupons, which on average expired in 9.3 weeks, down about 4% from 2008.
This higher face value with a shortened expiration period -- known as the Fuse in the industry -- shows manufacturers are delivering more coupons with higher value, "but are managing their financial exposure by reducing the length of time that these offers are available in the market," Marx said.
--------------------------------------------------------------------------------
Mark Fitzgerald (mfitzgerald@editorandpublisher.com) is editor of E&P.
Friday, January 22, 2010
Fingers crossed
I wonder what we will think about this New Year's eve 2011 from Paidcontent.org today:
The New York Times Co. (NYSE: NYT) has a year to sell the public on its plans to start charging frequent NYTimes.com users for access but first execs have to sell the segment of its own staff that wanted to stay free. A year of constant carping about how awful it will be—whether anonymous or out front—will be damaging, if not lethal. It helps that Executive Editor Bill Keller is behind the idea of a metered service. Without support at the very top of the newsroom, it would be even harder. But as one newsroom insider told me the other day, during the year-long discussions about whether to charge or not, few, if any, people changed their stance. Those who favored free stuck with it; those who thought pay was the way to go may have shifted on the how. That means a lot of people who don’t like like it will have to work to make it happen. The sell job started this morning with a memo to the staff from the very top, Arthur Sulzberger, Jr. and Janet Robinson, posted here in full. (The added emphasis is mine.)
———————————————————————————
On the Record . . . From Arthur + Janet
Vol. 1 2010: An Important Decision about Our Future
Today we are announcing that we will be introducing a paid model for NYTimes.com at the beginning of 2011. As you will see in the press release, we have chosen a metered approach that will offer users free access to a set number of articles per month and then charge users once they exceed that number.
The metered model implementation is an integral part of our comprehensive plan for enhancing NYTimes.com. In 2010 we will continue initiatives such as Times Open, Times Topics and our work to develop more active communities and more fully integrate the real-time Web. We will continue to develop new online products and offerings as part of our effort to enhance the user experience for our readers and advertisers.
Our strategy is to build the metered model while we remain focused on making NYTimes.com more compelling, interactive and entertaining, providing many more reasons for online audiences to visit our site and stay longer. In the weeks ahead, we will be adding resources to achieve these critically important goals.
Since NYTimes.com is, by a variety of standards, one of the world’s most popular and successful news Web sites, why are we changing our model at all?
We are doing so because we believe that a second revenue stream will be an important part of our future. While digital advertising will continue to be the major contributor to our success on the Web, we expect that online subscription revenue will improve our ability to grow an important part of this business.
Fundamentally, this is an important step in our effort to support The New York Times’s high-quality, professional journalism. Our readers know that The Times brings them the most authoritative news and opinion to be found anywhere. We believe that they are willing to pay for it online, just as they are already paying a significant price for it in print.
We greatly appreciate this loyalty and dedication to what we have to offer. Once the metered model infrastructure is completed, New York Times home delivery print subscribers will continue to have free access to NYTimes.com.
We also selected the metered model because it offers a number of important virtues from a financial and growth perspective. It allows NYTimes.com to remain a vibrant part of the search-driven Web, which has proven to be an integral reason for why we have become an industry leader in display advertising. This flexibility enables us to create a proper ratio between free and paid content and to aggressively build on our very successful digital advertising business.
As you have already seen over the past few days, there are those who think that such an action is critical to our future success and those who see it as a serious mistake. This comes as no surprise. We know from long experience that significant change invariably breeds controversy; that there will be an ongoing public conversation about what we are doing, and we expect that many of the comments will prove to be helpful.
We know these arguments well because our metered model decision is a product of months of vigorous analysis and debate. There was much we wanted to learn and know. We wanted to get a far better sense of NYTimes.com’s potential over the next decade. We also wanted to understand where the Web may be heading and how new technologies will affect customer online usage. We believed that only by carefully pursuing these and other important issues could we arrive at the best possible answer.
Ultimately, we recognize that the success of our ideas will be judged by how well we execute this effort in the months to come. That is why we are waiting until 2011 to introduce this new system. To pursue this new approach requires that we utilize the full energy and intellect of all of you. All that work begins today. As we said earlier, our goal is to create the best possible user experience, integrating many of our customer management systems throughout the Company. It will take time to get this right.
Moving with appropriate care will enhance our ability to embrace an array of promising opportunities that are at our doorstep. As we look ahead, we see a broad range of end-user devices coming to market that will provide even more mobility, connectivity, rich media experiences and a higher degree of application value, and our pricing plans and policies must reflect this vision.
There has also been much speculation in the media and elsewhere about whether The Times will join a consortium as part of the metered model implementation plan. At this stage, our plan is to introduce the metered model as a stand-alone product. At the same time, we continue to discuss alternatives with a broad range of prospective collaborators with regard to bundled offers and other aggregation opportunities.
We will provide additional details about our plan as we get closer to launch.
The creation of a metered model for NYTimes.com is part of a long evolution to expand our presence on the Web and exploit new mobile and social networking vehicles. We are able to take this step today because of the scale and success that we have developed over the past 15 years. NYTimes.com is now widely recognized as the gold standard in online news and information. This decision is a natural next step and we hope that you will be as excited as we are to take on this new opportunity.
The New York Times Co. (NYSE: NYT) has a year to sell the public on its plans to start charging frequent NYTimes.com users for access but first execs have to sell the segment of its own staff that wanted to stay free. A year of constant carping about how awful it will be—whether anonymous or out front—will be damaging, if not lethal. It helps that Executive Editor Bill Keller is behind the idea of a metered service. Without support at the very top of the newsroom, it would be even harder. But as one newsroom insider told me the other day, during the year-long discussions about whether to charge or not, few, if any, people changed their stance. Those who favored free stuck with it; those who thought pay was the way to go may have shifted on the how. That means a lot of people who don’t like like it will have to work to make it happen. The sell job started this morning with a memo to the staff from the very top, Arthur Sulzberger, Jr. and Janet Robinson, posted here in full. (The added emphasis is mine.)
———————————————————————————
On the Record . . . From Arthur + Janet
Vol. 1 2010: An Important Decision about Our Future
Today we are announcing that we will be introducing a paid model for NYTimes.com at the beginning of 2011. As you will see in the press release, we have chosen a metered approach that will offer users free access to a set number of articles per month and then charge users once they exceed that number.
The metered model implementation is an integral part of our comprehensive plan for enhancing NYTimes.com. In 2010 we will continue initiatives such as Times Open, Times Topics and our work to develop more active communities and more fully integrate the real-time Web. We will continue to develop new online products and offerings as part of our effort to enhance the user experience for our readers and advertisers.
Our strategy is to build the metered model while we remain focused on making NYTimes.com more compelling, interactive and entertaining, providing many more reasons for online audiences to visit our site and stay longer. In the weeks ahead, we will be adding resources to achieve these critically important goals.
Since NYTimes.com is, by a variety of standards, one of the world’s most popular and successful news Web sites, why are we changing our model at all?
We are doing so because we believe that a second revenue stream will be an important part of our future. While digital advertising will continue to be the major contributor to our success on the Web, we expect that online subscription revenue will improve our ability to grow an important part of this business.
Fundamentally, this is an important step in our effort to support The New York Times’s high-quality, professional journalism. Our readers know that The Times brings them the most authoritative news and opinion to be found anywhere. We believe that they are willing to pay for it online, just as they are already paying a significant price for it in print.
We greatly appreciate this loyalty and dedication to what we have to offer. Once the metered model infrastructure is completed, New York Times home delivery print subscribers will continue to have free access to NYTimes.com.
We also selected the metered model because it offers a number of important virtues from a financial and growth perspective. It allows NYTimes.com to remain a vibrant part of the search-driven Web, which has proven to be an integral reason for why we have become an industry leader in display advertising. This flexibility enables us to create a proper ratio between free and paid content and to aggressively build on our very successful digital advertising business.
As you have already seen over the past few days, there are those who think that such an action is critical to our future success and those who see it as a serious mistake. This comes as no surprise. We know from long experience that significant change invariably breeds controversy; that there will be an ongoing public conversation about what we are doing, and we expect that many of the comments will prove to be helpful.
We know these arguments well because our metered model decision is a product of months of vigorous analysis and debate. There was much we wanted to learn and know. We wanted to get a far better sense of NYTimes.com’s potential over the next decade. We also wanted to understand where the Web may be heading and how new technologies will affect customer online usage. We believed that only by carefully pursuing these and other important issues could we arrive at the best possible answer.
Ultimately, we recognize that the success of our ideas will be judged by how well we execute this effort in the months to come. That is why we are waiting until 2011 to introduce this new system. To pursue this new approach requires that we utilize the full energy and intellect of all of you. All that work begins today. As we said earlier, our goal is to create the best possible user experience, integrating many of our customer management systems throughout the Company. It will take time to get this right.
Moving with appropriate care will enhance our ability to embrace an array of promising opportunities that are at our doorstep. As we look ahead, we see a broad range of end-user devices coming to market that will provide even more mobility, connectivity, rich media experiences and a higher degree of application value, and our pricing plans and policies must reflect this vision.
There has also been much speculation in the media and elsewhere about whether The Times will join a consortium as part of the metered model implementation plan. At this stage, our plan is to introduce the metered model as a stand-alone product. At the same time, we continue to discuss alternatives with a broad range of prospective collaborators with regard to bundled offers and other aggregation opportunities.
We will provide additional details about our plan as we get closer to launch.
The creation of a metered model for NYTimes.com is part of a long evolution to expand our presence on the Web and exploit new mobile and social networking vehicles. We are able to take this step today because of the scale and success that we have developed over the past 15 years. NYTimes.com is now widely recognized as the gold standard in online news and information. This decision is a natural next step and we hope that you will be as excited as we are to take on this new opportunity.
Thursday, January 21, 2010
Yawhoo!
The New York Times may part the red sea yet. Quoting:
By RICHARD PÉREZ-PEÑA
Published: January 20, 2010
Taking a step that has tempted and terrified much of the newspaper industry, The New York Times announced on Wednesday that it would charge some frequent readers for access to its Web site — news that drew ample reaction from media analysts and consumers, ranging from enthusiastic to withering.
Skip to next paragraph
Enlarge This Image
Tony Cenicola/The New York Times
Beginning in January 2011, unlimited access to NYTimes.com will require a paper subscription or payment of a flat fee.
Related
Q.&A. on NYTimes.com (January 21, 2010)
Media Decoder: Dialing in a Plan: The Times Installs a Meter on Its Future Starting in January 2011, a visitor to NYTimes.com will be allowed to view a certain number of articles free each month; to read more, the reader must pay a flat fee for unlimited access. Subscribers to the print newspaper, even those who subscribe only to the Sunday paper, will receive full access to the site without any additional charge.
Executives of The New York Times Company said they wanted to create a system that would have little effect on the millions of occasional visitors to the site, while trying to cash in on the loyalty of more devoted readers. But fundamental features of the plan have not yet been decided, including how much the paper will charge for online subscriptions or how many articles a reader will be allowed to see without paying.
“This announcement allows us to begin the thought process that’s going to answer so many of the questions that we all care about,” Arthur Sulzberger Jr., the Times Company chairman and publisher of the newspaper, said in an interview. “We can’t get this halfway right or three-quarters of the way right. We have to get this really, really right.”
For years, publishers banked on a digital future supported entirely by advertising, dismissing online fees as little more than a formula for shrinking their audiences and ad revenue. But two years of plummeting advertising has many of them weighing anew whether they might collect more money from readers than they would lose from advertisers.
Financial analysts and writers who follow the media business had mostly qualified praise for the decision of The Times. NYTimes.com is the most popular newspaper site in the country, with more than 17 million readers a month in the United States, according to Nielsen Online; analysts say it is the leader in advertising revenue, as well, giving The Times more to lose if the move backfires.
“You can’t continue to be The New York Times unless you find” a new source of revenue, said James McQuivey, media analyst at Forrester Research.
Mike Simonton, an analyst at Fitch Ratings, said, “We expect that The Times will be able to execute a strategy like this,” adding that other papers will try it in the near future, but few are likely to succeed.
But the response was far from universally positive. Felix Salmon, a respected writer on media for Reuters, wrote, “Successful media companies go after audience first, and then watch revenues follow; failing ones alienate their audience in an attempt to maximize short-term revenues.”
Others endorsed the idea of a pay wall generally, while criticizing the approach of The Times.
Thousands of readers sent e-mail messages to The Times or posted comments on the site Wednesday, with those saying they supported the move outnumbered by others who vowed not to pay.
Shares of the Times Company fell 39 cents, closing at $13.31.
All visitors to NYTimes.com will have full access to the home page. In addition, readers will be able to read individual articles through search sites like Google, Yahoo and Bing without charge. After that first article, though, clicking on subsequent ones will count toward the monthly limit. Among the nation’s largest newspapers, only The Wall Street Journal and Newsday charge for access to major portions of their Web sites. A few smaller ones also do, including The Financial Times, The Arkansas Democrat-Gazette and The Albuquerque Journal, and more are expected to join their ranks this year.
The Times Company has been studying the matter for almost a year, searching for common ground between pro- and anti-pay camps. Company executives said the changes would wait another year primarily because they need to build pay-system software that works seamlessly with NYTimes.com and the print subscriber database.
“There’s no prize for getting it quick,” said Janet L. Robinson, the company’s president and chief executive. “There’s more of a prize for getting it right.”
Within the newsroom of The Times, where there has long been strong sentiment in favor of charging, the primary criticism was about the wait until 2011.
“I think we should have done it years ago,” said David Firestone, a deputy national news editor. “As painful as it will be at the beginning, we have to get rid of the notion that high-quality news comes free.”
The Times has tried and abandoned more limited online pay models. In the 1990s it charged overseas readers, and from 2005 to 2007 the newspaper’s TimesSelect service charged for access to editorials and columns.
Company executives said the current decision was not a reaction to the ad recession but a long-term strategy to develop new revenue. “This is a bet, to a certain degree, on where we think the Web is going,” Mr. Sulzberger said. “This is not going to be something that is going to change the financial dynamics overnight.”
Most readers who go to the Times site, as with other news sites, are incidental visitors, arriving no more than once in a while through searches and links, and many of them would be unaffected by the new system. A much smaller number of committed readers account for the bulk of the site visits and page views, and the essential question is how many of them will pay.
The Times Company looked at several approaches, including a straightforward pay wall similar to The Journal’s, which makes some articles available to any visitor, and others accessible only to paying readers. It also rejected the ideas of varying the price depending on how much a consumer uses the site, and a “membership” format similar to the one used in public broadcasting.
The approach the company took was “the one that after much research and study we determined has the most upside” in both subscriptions and advertising, said Martin A. Nisenholtz, senior vice president for digital operations. “We’re trying to maximize revenue. We’re not saying we want to put this revenue stream above that revenue stream. The goal is to maximize both revenue streams in combination.”
By RICHARD PÉREZ-PEÑA
Published: January 20, 2010
Taking a step that has tempted and terrified much of the newspaper industry, The New York Times announced on Wednesday that it would charge some frequent readers for access to its Web site — news that drew ample reaction from media analysts and consumers, ranging from enthusiastic to withering.
Skip to next paragraph
Enlarge This Image
Tony Cenicola/The New York Times
Beginning in January 2011, unlimited access to NYTimes.com will require a paper subscription or payment of a flat fee.
Related
Q.&A. on NYTimes.com (January 21, 2010)
Media Decoder: Dialing in a Plan: The Times Installs a Meter on Its Future Starting in January 2011, a visitor to NYTimes.com will be allowed to view a certain number of articles free each month; to read more, the reader must pay a flat fee for unlimited access. Subscribers to the print newspaper, even those who subscribe only to the Sunday paper, will receive full access to the site without any additional charge.
Executives of The New York Times Company said they wanted to create a system that would have little effect on the millions of occasional visitors to the site, while trying to cash in on the loyalty of more devoted readers. But fundamental features of the plan have not yet been decided, including how much the paper will charge for online subscriptions or how many articles a reader will be allowed to see without paying.
“This announcement allows us to begin the thought process that’s going to answer so many of the questions that we all care about,” Arthur Sulzberger Jr., the Times Company chairman and publisher of the newspaper, said in an interview. “We can’t get this halfway right or three-quarters of the way right. We have to get this really, really right.”
For years, publishers banked on a digital future supported entirely by advertising, dismissing online fees as little more than a formula for shrinking their audiences and ad revenue. But two years of plummeting advertising has many of them weighing anew whether they might collect more money from readers than they would lose from advertisers.
Financial analysts and writers who follow the media business had mostly qualified praise for the decision of The Times. NYTimes.com is the most popular newspaper site in the country, with more than 17 million readers a month in the United States, according to Nielsen Online; analysts say it is the leader in advertising revenue, as well, giving The Times more to lose if the move backfires.
“You can’t continue to be The New York Times unless you find” a new source of revenue, said James McQuivey, media analyst at Forrester Research.
Mike Simonton, an analyst at Fitch Ratings, said, “We expect that The Times will be able to execute a strategy like this,” adding that other papers will try it in the near future, but few are likely to succeed.
But the response was far from universally positive. Felix Salmon, a respected writer on media for Reuters, wrote, “Successful media companies go after audience first, and then watch revenues follow; failing ones alienate their audience in an attempt to maximize short-term revenues.”
Others endorsed the idea of a pay wall generally, while criticizing the approach of The Times.
Thousands of readers sent e-mail messages to The Times or posted comments on the site Wednesday, with those saying they supported the move outnumbered by others who vowed not to pay.
Shares of the Times Company fell 39 cents, closing at $13.31.
All visitors to NYTimes.com will have full access to the home page. In addition, readers will be able to read individual articles through search sites like Google, Yahoo and Bing without charge. After that first article, though, clicking on subsequent ones will count toward the monthly limit. Among the nation’s largest newspapers, only The Wall Street Journal and Newsday charge for access to major portions of their Web sites. A few smaller ones also do, including The Financial Times, The Arkansas Democrat-Gazette and The Albuquerque Journal, and more are expected to join their ranks this year.
The Times Company has been studying the matter for almost a year, searching for common ground between pro- and anti-pay camps. Company executives said the changes would wait another year primarily because they need to build pay-system software that works seamlessly with NYTimes.com and the print subscriber database.
“There’s no prize for getting it quick,” said Janet L. Robinson, the company’s president and chief executive. “There’s more of a prize for getting it right.”
Within the newsroom of The Times, where there has long been strong sentiment in favor of charging, the primary criticism was about the wait until 2011.
“I think we should have done it years ago,” said David Firestone, a deputy national news editor. “As painful as it will be at the beginning, we have to get rid of the notion that high-quality news comes free.”
The Times has tried and abandoned more limited online pay models. In the 1990s it charged overseas readers, and from 2005 to 2007 the newspaper’s TimesSelect service charged for access to editorials and columns.
Company executives said the current decision was not a reaction to the ad recession but a long-term strategy to develop new revenue. “This is a bet, to a certain degree, on where we think the Web is going,” Mr. Sulzberger said. “This is not going to be something that is going to change the financial dynamics overnight.”
Most readers who go to the Times site, as with other news sites, are incidental visitors, arriving no more than once in a while through searches and links, and many of them would be unaffected by the new system. A much smaller number of committed readers account for the bulk of the site visits and page views, and the essential question is how many of them will pay.
The Times Company looked at several approaches, including a straightforward pay wall similar to The Journal’s, which makes some articles available to any visitor, and others accessible only to paying readers. It also rejected the ideas of varying the price depending on how much a consumer uses the site, and a “membership” format similar to the one used in public broadcasting.
The approach the company took was “the one that after much research and study we determined has the most upside” in both subscriptions and advertising, said Martin A. Nisenholtz, senior vice president for digital operations. “We’re trying to maximize revenue. We’re not saying we want to put this revenue stream above that revenue stream. The goal is to maximize both revenue streams in combination.”
Tuesday, January 19, 2010
Cutting through the fog
Individuated news -- self-chosen stories and ads on any platform -- could cut through the fog of all the new platforms. Although this new platform is long-awaited and if history is any precedent should be exciting.
Monday, January 18, 2010
Monday, January 4, 2010
Payday maybe
The arrival and soon onslaught of e-tablets and apps for smartphones that present branded content upon subscription hold out the hope of a payday for news organizations, unlike websites never have. Read this insightful piece: http://news.bbc.co.uk/2/hi/technology/8414725.stm
Saturday, January 2, 2010
We're a tribe
In the modern-day lingo of Seth Godin's book "Tribes", those of us interested in personalizing web content onto all platforms from print to mobile to shower curtains, are a tribe, who get together once a year for the Individuated News Conference. If you haven't read Godin's wonderful book watch this. This year the conference will be in Denver June 21-23.
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