Monday, September 17, 2007

Monetizing Content in a Network Era: The NY Times Decision

One of the most profound implications of the shift to a network-era is the location of cash register. Many content owners were adamant for a long time that their content is so valuable that the consumers will pay subscription fees. New York Times allowed its physical newspaper subscribers to access their electronic content without paying extra while seeking to attract on-line subscribers for a fee. However, today, it announced that its content will be free.
This particular statement is particularly noteworthy.
“But our projections for growth on that paid subscriber base were low, compared to the growth of online advertising,” said Vivian L. Schiller, senior vice president and general manager of the site,
The shift from paper to online compelled NY Times to rethink its revenue sources; online revenue is less about direct subscription fees but more about online advertising. NY Times has finally seen its internal numbers: $10 million annually--which may limit its ability to garner a higher amount through advertising. As the article noted:
What changed, The Times said, was that many more readers started coming to the site from search engines and links on other sites instead of coming directly to These indirect readers, unable to gain access to articles behind the pay wall and less likely to pay subscription fees than the more loyal direct users, were seen as opportunities for more page views and increased advertising revenue.
Network era is shifting the cash register. Will Wall Street Journal, Economist and the Financial Times follow suit? Will this impact other content like music and video?

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