DISQUS

Cody Brown · 5 months ago

This is a more elegant solution to getting users to cough up but it doesn't address the larger implications of charging for news.

1.) Views will hit the floor. The NYT makes 1/5 of its revenue from selling online advertisements.

2.) Values of the news organization erode. The NYT's brand is rooted as a public trust and national watchdog. Imagine some big story breaking in NYC like a subway crash that the NYT has the scoop on. Your blood is pumping, you have family in NYC. You catch a link off twitter and hit a friendly reminder from The Times that your 10 visits are up. What are you going to do? This is analogous to requiring a toll payment at the ER. You'll most likely respond by writing an irate message about the NYT on twitter, than scour the internet for a competitor to praise.

3.) Undercut user contributions. I would have not spent the past 15 minutes writing this comment if I knew others had to pay to see it.

fredwilson · 4 months ago

Views won't hit the floor if they only stop you on your tenth visit. My bet is the NYT's visitor loyalty curve looks a lot like most web publishers. I'd bet that 80pcnt plus of their visitors come less than 10x per month.

Of course that means they will only target less than 20pcnt of their readership with a subscription product. I think that's OK, because those are their most loyal readers and the most willing to pay

wcmchris · 4 months ago

I agree. The consumers who visit the site more that 10 times per month are probably the ones who already pay for the print publication.

Andrew · 4 months ago

Yes - it charges those who are getting the most value from your content. But the problem is, from a user perspective, you are penalising your most loyal readers. By driving even a minority of them to find other sources for their news, you lose a disproportionate amount of your pageviews and reader interactions.

kidmercury · 5 months ago

nailed it. your comment has been liked.

ShanaC · 4 months ago

Didn't nail it at all.
Newspapers have a weird problem-their word is important, the community of people who talk about their word is important, because it is what makes them powerful. However, that community is shifting.
They are stuck between the fact that the brand value is create by Sarnoff's law (broadcasting out and being able to make and break the news via their heavyweight analysis) and Reed's Law- (their presence on the internet in fact makes their news more valuable, via linksharing and giving other people to come in and comment on their news and add to their news sources).

So far, the only organization that I have ever seen even partially successfully navigate around the Problem is Salon.com- who partnered up with the 'Well. Their official comment system is run on the 'Well: you have to pay to not only officially comment, but also for lower add free support. That being said, they qare not going to stop me from linking in and out, nor reading their content.

Media Organizations might want to take a look at stopping open comment threads without payment on their websites. Nothing stopping anyone from reading, linking out and creating content elsewhere, but Official word and quoting, by say the NYTimes to only be done unless you are a blogger at a major Blog- (say the Huffington Post) or on their website. A pay version of the Letters to the editor...

Jack Christopher · 5 months ago

2) is valid concern, but it's an outlier.

David Semeria · 5 months ago

Agreed, it would have to be exactly the 10th visit

lacker · 5 months ago

No, because a lot of people like me would never pay. Then for half the month, whenever we go to a NYT link we get reminded it's our 10th visit and then have to leave.

freeloader · 4 months ago

This is exactly my experience - I used to read the FT for the first week or two of each month, moving to other sources when the number of free articles ran out. Now I have adapted my usage - I only read the articles at FT that I perceive as being the most value added. This usually means I can stretch my free allotment through the month.

If the NYT were to adapt to a similar model, while some people would feel the need to subscribe, I believe that the vast majority would simply seek out other news sources. RSS readers make this fairly easy to do and I am sure that many second tier newspapers and online-only news sources would welcome the additional traffic and profile. Therefore, the newspaper industry as a whole faces a prisoner's dilemma as the major players contemplate moving to a paid model.

DaveinHackensack · 5 months ago

Re 3), Plenty of people wrote letters to the editor of the NY Times and other newspapers before their content was made available free online.

Jeff Hilimire · 5 months ago

Have you seen any models where you get "credits" for commenting or referring content to your network? So like the FT model, instead of # of days you get a # of credits each month. Then you can build credits by commenting on articles or passing them around (or reviewing, etc.). Run out of credits then you need to pay to get more for that month.

fredwilson · 5 months ago

Nope. But that makes a ton of sense. You need a paid model or some sense of value to make that work

I would do it in a game like manner. Maybe like tumbarity on tumblr

Mark Essel · 4 months ago

I got the impression Allen Hoving is building a user payment option system that works like that. payCheckr.com?

fredwilson · 4 months ago

I think there are a number of efforts in this area

Daniel Zarick · 5 months ago

I really like this suggestion. Encourage participation and the viral aspects of the Internet. Explaining it to the passing consumer night prove a little difficult though.

Dale Dougherty · 5 months ago

I like Jeff H's idea of earning credits through participation. (It's the old AOL model but hard to make work on the Web when you don't pay for the service to begin with. AOL had a paid service it could make free to forum leaders, etc.) There is still an "us-versus-them" mentality at newspapers and part of the challenge is breaking away from that mindset, not just to ask how readers will pay for the news but how can the service engage more people in the community as "co-creators," who also become stakeholders. Local advertisers should also be seen as part of this creative equation, not outside it.

A variation is creating an artificial currency that might be redeemed for products and services in a local economy. Remember Green Stamps? I've often wondered how that could be done well online. Even simple point systems offer recognition, provide the opportunity to offer new levels of access and generate traffic through discounts for use with local advertisers.

The biggest challenge for newspapers is that they will have to survive off ad revenue from local advertisers, in place of larger national advertisers. Historically, this is what newspapers once did when there was a large department store in the center of town. I suspect that consolidation in newspapers (Gannett) was driven by opportunities to sell display advertisting to national advertisers, who did not want to deal separately with individual markets. I also suspect that these reasons for consolidation no longer make sense, and that's part of the reality facing the large media companies that owned so many papers. They can't easily accept the fact that many newspapers need to be re-localized or die.

Today, the local ad market is smaller and unable to afford premium ad rates paid by national brands. The newspapers will have to demonstrate that they can do more to drive local business -- and a new relationship with the advertiser needs to be struck, as Fred says, where newspapers are taking "more media risk." Whether coupons or some other method whose results can be measured make a difference, newspapers need to re-define their ability to develop and promote the local economy.

fredwilson · 4 months ago

I love the idea of virtual currencies (which is what green stamps were) as part of the mix

kidmercury · 5 months ago

my trading site has elements of this. we give people points for contributing to the site, with these points they can buy products and services. some of the products and services is premium content created by our approved merchants. they can also buy points, so if some premium content costs 500 points but you've only earned 250, you can buy the other 250....it will end up being cheaper than if you paid for the whole thing outright using legal tender (i.e. US dollars, euros, etc)

Lawrence Coburn · 5 months ago

Jeff, just to build on your very good point - if some portion of your content is user generated, it would be insane to charge the creators of that content. And in the case of commenting and / or other forms of content curation, there's value there (as the AVC community demonstrates). Any media company looking to charge it's prolific users should make sure to carve out an exception for those that contribute content or strengthen the community in other ways.

fredwilson · 4 months ago

Agreed

vivekpuri · 4 months ago

WSJ charges for content, but comments on these paid articles are free to view. On the other hand, WSJ's commenting system sucks cause you cannot vote down comments(same is the issue with Disqus), and are left to extract the good content from worthless.

Jeff Hilimire · 4 months ago

Lawrence, couldn't agree more. Not only would those prolific users add to and enhance the content, they'd almost assuredly drive more traffic to the content, providing a greater value than if they paid a small subscription fee.

I was on ESPN.com today reading an article and I was amazed that there was no way to leave a comment. They have a paid area as well for ESPN Insiders which is absurd in its own right. It's amazing, you can't even comment on their videos. For such a media behemoth to be so far from this type of model and so far from understanding the way people want to consume content...well, its not a good sign for us to expect progress any time soon.

William Mougayar · 5 months ago

According to yesterday's Gawker, The NY Times will have 2 models: $50 & $150 /yr. "The New York Times Describes Online 'Membership' Plans" - New York Times - Gawker - http://shar.es/wdKv

Here's a crazy idea. How about a "Season Pass" to read it all: FT, NYT, Economist, etc. I'll pay x$/yr, and let them figure out how to divide it up, but I want 1 registration & commenting system.

The irony of this is that presently, I don't have any subscriptions to any mainstream media pubs, and I'm not missing anything.

Having said that, if this tide will shift to "paid something", (some) users will pay if something saves them time (assuming they value their time), or if it gives them insights (assuming they need that added insight).
Publishers should do 2 things which I'll pay for:
- allowing me to be part of online social discussions with their writers. But they need better social platforms for that, and they should reward their writers to participate, not just write. So, news is free, but online social participation is not. I"ll pay to be heard.
- more intelligence and personalization services - based on what I read or like- show me more content like that, or allow me to sift through your archives intelligently with faceted/semantic navigation. If they aren't doing that, other aggregators will (and have).

This debate is raging, and we're tracking, indexing and semanticizing articles relating to the "Future of News", at http://beta.eqentia.com/newsfuture (registration required during beta).

K. Warman Kern · 5 months ago

Bingo. exactly what I'm looking for professionally and personally.

fredwilson · 4 months ago

That gawker post is what got me to post this. I've been saying this privately to people for months

Jeff Jarvis · 5 months ago

But Fred,

You live and work in the grand exception: financial New York. Fine to the FT, even the NYT: high use high value, high demographic audience, high loyalty. But what about the Star-Ledger or the Plain-Dealer or my little Gannett paper out here headed toward the heartland? What about a trade pub that can get very high CPMs if it attracts the right audience?

This discussion has been too much about revenue lines when it should be about the bottom line. How do you make - that is, net - more money: through ads or through subs (accounting for the costs of each)? That's where we have to shift the discussion.

And who is to say that the ad models we sell now are right? Just as publishers try to bring old revenue lines into a new world, they try to bring old products into a new world. The same problem we have with dumping print content online (shovelware), we should have with using old scarcity-based ad models (Google's real secret to advertising success isn't search but is the fact that it sells performance and it takes media risk; that is what led to its embrace of abundance and of openness; that is the lesson to be learned by media).

Just because the FT can charge doesn't mean it's the right model. Might be. But one cannot judge that in isolation. We have to look at the value of the products - to readers and advertisers; at the costs of the business - eliminating commodified content tasks, limiting marketing costs when you sell to consumers; at the scale of the business, measuring success no longer by gross but by bottom line - media properties are sure to be smaller but can be more profitable.

Yes, the FT model might well work in some cases. But I think those cases will be limited to very high value - and thus very high cost and unique - creations with a high barrier to entry (vs. most of news, where it is very low; indeed, it being low is what leads to the opportunities for collaboration, which in turn brings both expansion and efficiency).

At the New Business Models for News Project at CUNY, we are working on complete models in a metro market because that's where we think the discussion must go. We have to look at these businesses as a whole - as you would as an investor - not a line at a time.

fredwilson · 5 months ago

That's all right Jeff.

And I alluded to that when I said that high cost models might require subs to make them work.

High cost had better mean high quality, unique, and different. If it doesn't, then high cost might mean bankruptcy instead

I'm all for figuring out new ad models, particularly for local content. And I'd also like to figure out local content models that are high quality and low cost (citizen journalism). As you know we've put our money where our mouth is on that one

I'm not in the freetard camp nor am I in the paid content camp. I'm in the let's figure out how to make money the right way camp. And I think a sub model is part of the equation for the right publications.

This post is how I'd do subs if I was going to do them

If that was not clear, I should fix that

Evan Rudowski · 5 months ago

At SubHub we work with a number of publishers who incorporate a subscription model. Many of them do use the combination of free and paid that you seem down on, Fred.

This kind of model works for content that is unique, actionable, high quality and from a trusted source in its chosen niche. Uniqueness of content is key, and this is something that most newspapers lack -- which is why many newspapers would fail at the subscription model.

Nevertheless there are many success stories -- usually smaller publishers or individuals (the journalists who used to work at the big newspaper, or people with a passion or expertise in their niche who may not even view themselves as journalists or publishers, although that's what they're doing).

People do not pay a subscription merely for content, but also to be part of a community around their area of interest. So sites that are very highly focused and targeted work best, as they are best able to form a community around themselves. In this sense, paying for "content" is the wrong argument, it's paying for membership in a community. That's why we call them membership websites and not content websites.

The debate around free versus paid is oversimplified and a waste of time. Any website ought to have multiple revenue streams in order to maximize its potential. There are dozens of possible revenue streams available, from advertising to subscription to transactions, events, e-commerce, etc. A site with unique content targeted at a motivated community will be able to take advantage of multiple opportunities.

It's the players who lack these qualities sufficiently who seem to be spending the most time debating which model will solve their problems. The revenue model is not the issue, it's what they're offering.

Kind regards,
Evan

fredwilson · 4 months ago

I'm not down on the combo of free and paid. Freemium is a concept I talk about all the time and helped to popularize

kidmercury · 5 months ago

have you read here comes everybody by clay shirky? i think you would love that book. actually i recommend it for this whole community. it is like one big infomercial for meetup and twitter, you would love it for that alone.

anyway i mention it because i am reading it now and shirky does a great job IMHO of explaining somethign i think many of us suspect intuitively and have discussed before, which is that free does not only yield a better price for the customer and have marketing value as well, but it also creates a better product. free enables crowdsourcing, this is the real disruption where the money is at.

curiouslypersistent · 5 months ago

Though on his recent book tour, Shirky has partially recanted from his advocation of crowdsourcing. The change.gov crowdsourcing experiment showed it is too open to hijacking by special interest groups: I wrote a bite more about it at http://curiouslypersistent.wordpress.com/2009/0...

fredwilson · 4 months ago

Yes I've read it. And I agree that free is better. I've written extensively why I think that. But it may well be that certain forms of high cost content will not be sustainably free. We need to work that into the model somehow

kidmercury · 4 months ago

"high cost content"....it almost doesn't exist anymore. an encyclopedia used to cost a lot of money to make, wikipedia put the smackdown on that. the problem with these companies is that htey don't know how to lower their cost of production because their business processes are locked into higher cost methods (i..e hiring a bunch of writers, editing content before it is published, hierarchical structures, etc). these companies need to either (1) learn how to crowdsource -- this seems unlikely, they are trapped in the innovator's dilemma because of their resources and processes; or (2) think more critically about what assets they have and how these assets can be repositioned, perhaps radically so it is in a completely different business (i.e. like the watch manufacturer who realizes they have a lot of leather and thus enters the shoe industry when attacked by a disruptive watch maker [like one that was a computer]).

in terms of paid content, i do think there are a few models:

1. in niches so small where freeconomics is not applicable
2. personalization; i.e. custom media (kinda ties into point #1...after all that's the smallest niche)
3. niche private communities (this was mentioned elsewhere in this thread)
4. time-sensitive data (stock alerts)

K. Warman Kern · 5 months ago

We sell subscriptions by syndicating a player on contextually relevant sites. The player dynamically updates with teaser info that links to our site. The landing page "sells" a "trial" or "guest" pass. Then we upsell guests to full subscriptions.

I think the AP "wrapper" is interesting because, like our player, it creates the possibility to reward the contextually relevant sites with an affiliate or associate fee for referring purchasers.

I suspect we can increase the subscription conversion rates by how visibly we enable individuals to connect with other like-minded individuals. The content provides the context for identifying like-minded people and the ice-breaker to stimulate these conversations. The technology facilitates and accelerates this process - the more real time, the more rewarding.

There is lots of room for improvement at each stage of this process - from identifying contextually relevant sites to enabling real time conversations.

Alex Iskold · 5 months ago

Jeff,

my take is that the only way local papers can compete is by generating highly relevant, high quality local content. This content is as scarce as any other content (I am not talking about crap, but quality content).

Why wouldn't you want to pay for that?

I think the model holds, what does not hold is scale, but really the scale was never the same for local newspapers.

I think Fred is right, and at the very least, this model needs to be explored.

kidmercury · 5 months ago

ads almost always beats subs, except in very small niches where freeconomics is not applicable. the key, though, is how to define ads? most people are thinking CPM/CPC pricing. of course, most people also think a guy in a cave pulled off 9/11, so mass opinion is not always significant.

MRB · 5 months ago

wow...a web content monetization blog entry related to your laughable 9/11 conspiracy theories...didn't see that one coming.

Online advertising needs to evolve in order to subvert the subscription model most premium content publishers will most certainly be forced into. Standard placement ads won't cut it as more "inventory" gets added to the web everyday, pushing fill rates down with the CPM (or any other pricing model). Not all content is created equal and until brands/publishers monetize more effectively, "free" content won't be sustainable.

kidmercury · 4 months ago

lol, i love it when the youngsters show up and expose their naivete for all to see. it serves as a reminder that in spite of the cruelty of our world, innocence is not yet lost.

first let us recall that the "laughable conspiracy theories" are not "my" conspiracy theories. i simply support hte views espoused by 27 year CIA veteran ray mcgovern; 9/11 commission member, former US marine, and former US congressman max cleland; FBI agent sibel edmonds, who is on record as saying she has all the evidence of a coverup; and FBI chief of investigative publicity rex tomb, who publicly admits the reason the bin laden is not on the FBI's most wanted list for 9/11 is because the FBI has no hard evidence against bin laden. this is just scratching the surface in terms of credible people who support "laughable" conspiracy theories. go to www.patriotsquestion911.com for a more comprehensive list.

your analysis of the advertising situation ignores the fact that the line between content and advertising is being blurred. those who do realize this trend and pursue it accordingly will stumble upon new forms of advertising that break us out of the CPC/CPM reality. this may seem unlikely now, but it will be obvious in hindsight. that's always the way it is with disruption.

dailypatricia · 5 months ago

Sigh.

ksrikrishna · 5 months ago

Fred, thanks for kicking off this thread - what a great discussion. Several thoughts occur, especially as I sit reading this from Bangalore, India - where English (print) newspaper readership[1] continues to grow (despite the ad market suffering) and vernacular papers have an order of magnitude higher total readership (but much lower ad rates) are yet to face the decimation that US papers are facing.

a] much like your earlier paying-for-movies-in-a-theatre analogy, I believe not just New Yorkers but readers across the world (including cost-conscious Indians) are prepared to pay for high value (editorial and/or specialized) content. As with most things it's probably worth looking outside the US to see what models are working - as manga continues to sell in physical form in Japan despite mangafox.com or DoCoMo handsets - the European newspapers FT you already alluded to.

b] the most obvious American analog I can find is National Public Radio[2] and what they have been able to do - several of the earlier commenters alluded to belonging to a community or paying for membership, rather than a subscription. I believe there's some truth to it. What a United Way, Green Peace or NPR have done (while being in wildly different businesses) has some lessons I suspect for media companies.

c] I find the whole discussion (and near-fanboy tenor) of Free, in much of the blogosphere, particularly with reference to media, without much meaty analysis of what ails the business somewhat disingenuous. If pharma companies stumble or struggle (which they do) rarely do we hear that the answer should be free drugs, as otherwise [Indian] pharma companies will drive prices down and we better race to the bottom. Even if we claim news is a commodity, analysis isn't and all this talk of friction-free, stuff wanting to be free, seems somewhat other worldly. And as much as there are good bloggers out there, or the Huffington post, the analysis an insight a James Fallows or Paul Krugman bring are worth paying for.

[1] http://contentsutra.com/article/419-indian-read...
[2] http://www.npr.org/about/news.html

andrewbaron · 5 months ago

What are your thoughts on the old-school PBS model? They started with the premise that they can provide exceptional content. Companies like the NYT and AP, etc. could make this claim and the audience would likely agree. They could then do periodic email-a-thons or whatever you would call it these days, where they spend a week or two out of the year or maybe a few days out of each season pumping out the message and rallying the audience to support the content with donations, etc. I can only assume you have addressed this before, how does this play into a viable option in your opinion?

fredwilson · 4 months ago

I don't love it. I find the campaigns annoying, particulalry on public radio

I'd rather just ask to be paid

ShanaC · 4 months ago

I can imagine that one morning oversleeping because I forgot to renew my subscription to NPR...

Some places advertisements or even advertisements-lite (which is what donations are for PR and PBS) work better due to the medium.

johnebbert · 5 months ago

I like your FT idea. Bottom line is I'd wish the Times would simply hurry up and charge. They are a critical news source and if they're suffering, I'm ready to help. Socialism meets capitalism - I don't have a problem with that.

David Semeria · 5 months ago

Great comment, short and to the point.

Like with any other product, people know quality news content when they see it. And if you make it easy for them, they'll pay for it too.

Vladimir Vukicevic · 5 months ago

I think that expanding the pie might be a better way to go about saving the newspapers - instead of getting too clever with what's currently offered and when/how it's paid for - i.e. with cutting up the current pie.

The FT idea doesn't really monetize the audience, it still heavily relies on the content - but added services such as integrated learning/puzzle games, blogs, chat, etc. could more easily be used to monetize the audience that the (free) core content brings in. The New York Times is taking the right steps.

Dave Morgan · 5 months ago

Right on target Fred. Media companies need to realize that it is audience attention that is scarce now, not content, or distribution for that matter

fredwilson · 5 months ago

I stole the headline from you dave. I think I heard you say that seven years ago

shafqat · 5 months ago

I agree that the FT has an elegant model, and they are one of the few newspapers that can effectively monetize their online audience/content. But the bottom line is that they have content that people want and that people are willing to pay for. That is more than I can say for a lot of newspapers out there. Niche content, or even content in a specific vertical like business, can be monetized if there is clear differentiation in terms of quality. But trying this model on generic news content is a disaster waiting to happen.

Another example of the freemium model used elegantly is ESPN. Most of the content is free, but there are tons of people who pay up for ESPN's Insider. Why? Because there is very limited other content on the web that can compete in terms of quality, timeliness or analysis of sports news. Presenting facts is a commodity, but it's the analysis that is precious.

fredwilson · 5 months ago

In the specific case of the NY Times, I believe they have a brand and an audience that values their content enough that a good percentage will pay

The trick is how to implement it. I never paid for times select because I was insulted by the idea that you had to pay for opinion but not news

masterd · 5 months ago

Agree.. I am a loyal Times and FT user. I pay for the FT (as a print subscriber) but never wanted to pay for the times select product.

Facebook User · 4 months ago

And that's part of the issue with some of the approaches that have been taken to premium content. It's key to get inside the readers' heads and understand what they see as hyper-valuable information. Too often, the decisions are made from the editorial staff's point of view, and reporters and editors value different things than readers.

Jeff Eddings · 5 months ago

I think this is worth refining a bit more. I believe there are those that would pay much more for different features, particularly if it might be for their job, and they can get work to pay for it. I think you're absolutely right that we should be monetizing the audience, not the content, but that audience also isn't binary: drive-by's vs. avid readers. By understanding that some people would pay for other premium features -- no ads, different formats, push features, content within in a broader syndicate, etc. -- as a publisher, you're not leaving money on the table.

fredwilson · 5 months ago

I like the idea of paying for no ads. Maybe that's a second tier paid product. I find the interstials particulalry painful even though you can skip them

Arno · 5 months ago

Hello Fred,

What happens if you don't pay after those 9 times?

This looks like Open Source a bit, offering something good and try to give people a good feeling or get them involved and donate to or sponsor the project/site. The difference is that this is a sort of, in Open Source world, aggressive way of asking for donations but I think that's perfectly fine.

Arno

fredwilson · 5 months ago

If you don't pay up on your tenth visit, you can't get to the content until the following month

aaronklein · 5 months ago

Unless you clear your cookies or switch to another browser. I have Firefox, Chrome and IE installed, so technically I could visit 27 times before clearing my cookies. :)

That being said, this post really opened my eyes, Fred. The basic idea here is not to do perfect enforcement for content businesses. If the fee is reasonable, loyal readers will support the content because they know it needs revenue to continue.

joebryant · 5 months ago

That would be my worry Aaron. Won't this be really easy to get around for folks?

aaronklein · 4 months ago

I think it's a game of percentages.

Let's say you have 10 million people who "want" to read your content a month.

If you require them to pay to access the content, you might (charitably) have a 3% conversion rate. Now you have 300,000 people viewing ads and paying for the content.

Under the "unenforced subscription" model, all 10 million people are now viewing your ads, so that revenue model is a whopping 33x stronger. Meanwhile, if you can get 10% of your readership to active status and get half of them to pay to get what they are now hooked on, you hit 500,000 paying for content.

(Update: I should have added, the other half probably clear the cookies or just don't come back the rest of the month. But you're still ahead.)

It's not a sure bet, but I think the point is -- you have a shot at building a good-sized audience by keeping the gates down, and if the fees are reasonable, you have an infinitely higher chance at getting paid subscribers out of folks already hooked on your content, rather than first timers or 7-day-free-trial people.

fredwilson · 4 months ago

Yessss. That's the point

joebryant · 4 months ago

Thank you Mr. Klein. And thank you Mr. Wilson for this forum and chance to interact. This is a topic that hits home with me as I've been living this debate for the last 6 years. I own a business that provides information for folks that play Fantasy Football. www.Footballguys.com

Early on, we were 100% free. I knew I'd have to do that to establish a reputation and earn business. We were successful attracting an audience to the website and also with our Daily Email we'd send out each day in the spring and summer. The Daily Email contains the relevant news stories of the day along with our analysis of those stories. And also information about what new content features are on the site.

We opened up and after a few years, we had 30,000 subscribers to the Daily Email. At that point, we felt comfortable going to a pay subscription. We'd still give away almost all of the information from May up until July but around the middle of July (when Fantasy Football owners are really cranking up their interest) we "put the wall up" and started charging for access to the website. The Daily Email remained free all the way up until the regular season starts.

The million dollar question for us back then was how many of those folks that opted in for the free Daily Email update would pay us money to access the content once the wall went up? I had people tell us we should be thrilled if 5% of our free customers would pay. I didn't know but I knew we were at the point where we had to make a change and start charging. Turned out that 50% of our free customers opted to sign up for the pay subscription. We then had 30k that were on the free list and 15k that were paying us for the premium content.

That was 6 years ago. Each year, we've gone with a similar model. The website is completely free from the time that new content starts going up each year in May and remains free to everyone up until mid July when the wall goes up. The Daily Email Update starts in May and remains free all the way up until the regular season starts in September.

We've grown the Daily Email Update subscriber to around 85,000. About 41% of those folks now will sign up for the pay subscription.

But still, I wonder if we could be doing this better. I worry that a guy that finds our site in August during the heat of the Fantasy Football preseason really doesn't get to see much from us. He can see all the great content that is behind the wall (or at least he can see the titles). And he can see all the content we did last season to get a feel for what we do. But I worry we don't give him a good enough "taste". That's why Mr. Wilson's post on this topic caught my eye.

The flip side to that of course is that if we let them "taste" too much, they get all they need for free and don't subscribe.

Our audience is a pretty tech savvy bunch. My gut feel is that if all you had to do was change browsers or clear cookies, a huge % of them would do that. And laugh at how naive we were thinking they wouldn't realize that's all one had to do to "get over the wall". There is a loyalty factor involved of course and a "good will" angle so some would pay just out of honor. But I'd think huge numbers would not.

Any thoughts there? Much thanks.

aaronklein · 4 months ago

I've thought about this a little bit today. Honestly, if you have a model that converted 50%, I'd be pretty happy and just focus on special promotions (maybe prorated pricing or longer free trials) to let late joiners get a better feel for the product. Not sure you need to do more than that to get a better financial result.

Correction: 41%, but still.

joebryant · 4 months ago

Thanks a lot, Aaron. This has been a really helpful topic to read.

joebryant · 4 months ago

And I should add, Aaron, we've got a little bit of a wrinkle as we're not converting 41% of all the visitors to the website. It's 41% of the folks that sign up for our Free Email List which is somewhat of a commitment barrier they have to clear. I don't know what the percentage is of all the people that look at the website online but I'd expect that % to be pretty small. Which is what keeps me wondering if we couldn't do something better.

I LOVE the idea of what Fred is suggesting. Maybe I'm too cynical but I just fear that a huge number of folks would change browsers / clear cookies to get around what effectively is not much of a wall.

J

aaronklein · 4 months ago

Some ideas: can you execute that kind of model for four weeks? Don't do a lot of fanfare, just change the security model and see how your conversion rates change?

Might be impossible without causing problems with your existing paid folks. So here's another idea: make a carbon copy of your site, give it a different brand, kill a feature or two to differentiate, and test new models with it. On this one, you can pull up the gates and stop any cannibalization of your already-successful site if need be.

The bottom line is -- this is always tougher if you have a successful site earning money on content already. The NYT has it easier than you do because they have no success in this arena. They have nothing to lose by trying it.

fredwilson · 4 months ago

That's the idea. Perfect is the enemy of the good. drm vs mp3 proved that point

fredwilson · 5 months ago

I think there is so much to learn from the open source movement. Content companies should study it very carefully

egoboss · 5 months ago

The key differentiator for any news provider is their ratio of legacy news reporting to analysis or indeed the creation of news through investigative journalism, creative thinking, etc.

There are very many news providers out there - very few of them offer truly insightful news analysis, let alone the creation of news itself.

Those that focus on the latter styles of content will survive and prosper. 'News' in itself is simply generic and of little or no value in today's wired world ...

fredwilson · 5 months ago

That's certainly true. Publishers that just regurgitate the news feed are done. It doesn't work online

But in the specific instance of the NY Times, it is my opnion that they do way more than that. You can argue with their liberal bias, you can say they aren't what they used to be, or any other number of critiques, but they still deliver a differentiated and quality product in my view

egoboss · 5 months ago

I used to take it all the time when I lived in NYC for a year or so - in good old hard copy form - I don't visit their web site that often nowadays, but from what I have seen its content is good so it shouldn't have any problems with the FT like model, as you describe.

Biggest bug bear is it still seems to have the registration screen issue when picking up a link aggregated from their site; turns people off immediately.

I do wonder however how many creative journalists are out there - do they in fact need to be traditional, accredited 'journalists' in this new era? Very few bloggers appear to merit the transition to a mainstream, global audience - 'success' with a niche blog audience (which is often simply fan boys of said blogger) is one thing, but regularly publishing in the NYT, FT, et al is a different ball game entirely. Would be interesting to hear the views of those involved in contemporary journalism.

fredwilson · 5 months ago

I think we are headed toward the world you imagine. I'm just not sure how we cross the chasm to get there

egoboss · 5 months ago

My biggest concern is the 'cult of the personality' taking over this new era of journalism. This is the transition - chasm - I believe to be the real challenge.

I am maybe an anachronism in actually buying a hard-copy 'paper most days - typically The Daily Telegraph and/or The Guardian in the UK.

My purchasing patterns/subscriptions with The Economist, WSJ, HBR, et al are a separate matter, with their very different economics/audiences. I subscribe/d to them primarily for access to their online archives, etc.

Thinking about it some more, I realise that I buy the Telegraph/Guardian to read the thoughts of explicit staff writers; ironically, these are typically more traditional style of journalists with little or no web presence as individuals. They have no desire to be web-(in)famous in an autonomous sense.

Unfortunately, some of their contemporary peers are more web-fame focused and full of their own self-importance - seeing every piece they write as Nobel-worthy. Having a smattering of fan-boy acolytes only further fuels the hubris some of them sadly seem to demonstrate.

I believe there is a real danger that this could become the norm.

The biggest threat to the transition of (quality) journalism/reporting to the web model is the cult of 'me'.

K. Warman Kern · 4 months ago

The subscription model is the first step to raising the bar. But can't sell quality product without quality promotion. & Can't afford the two w/out a "frictionless" way to collect money.

By quality promotion I mean promotion that sells a quality product at the premium price it should command. Specifically, targeting the people who will value the superiority of the quality product and messaging that positions the superiority of the product. In today's cluttered, competitive marketplace it is hard to find the right people, and get the message through to them. BUT the internet offers tons of information and technology to do this more efficiently than mass marketing.

erikford · 5 months ago

Great case study/ example. Just after reading this, I made my way through http://europe.autonews.com/ which at the top right clearly delineates their content/ subscription model:
Legend:
[$] Premium content
[SUB] Requires subscription
[REG] Requires registration

Not saying this is the ideal, but at least there are smart strides in how to approach this for these companies. Perhaps a hybrid of this and the FT? The registration required is a nice, subtle segue into channeling prospective subscribers without a financial commitment.

fredwilson · 5 months ago

I don't like requiring a registration to view content on a 'drive by' visit. It puts too much friction in the system too early in the user experience

erikford · 5 months ago

It's interesting... for us looking at this news as if we could read it at FT, NYT, WSJ etc, it's drive by, but others, especially in the automotive industry, quite niche. In addition to the registration, there's a plethora of articles that require no registration/ restrictions (yet it isn't delineated), to which I assume is the drive by focused/segmented content, especially because of the competitive noise and same breaking news stories. Obviously not a 'one solution fits all' approach- I enjoy looking at different models, specifically by our European counterparts; Diversified innovation-

phillipbaker · 5 months ago

Requiring registration for some articles and not others can be just as jarring as charging for some and not others. YouTube made a pretty strong case for making all content viewable.

I like the extra layer of registration but there has to be a reason to do it that makes services more useful. Registrations have to be earned just the same as payments.

fredwilson · 4 months ago

That last line is soooo true.

We advise all web companies to do 'lazy registration' which is to cookie the user and then slowly but surely work with them to get them fully registered in a seamless and painless a way as is possible

amintz15 · 5 months ago

I think regardless of how loyal a visitor becomes, as soon as you make them pay for information on the internet, you're going to lose them. Anyone who's not over the age of 30 will simply find other free sources of info once a website makes them pay for information.

fredwilson · 5 months ago

I think the WSJ and the FT have proven that is not true.

And by providing a certain number of visits for free, you get to show that under 30 audience why they should pay. You don't lose them on the first visit

aaronklein · 5 months ago

I'm 30 and I've been a paying subscriber to WSJ.com for three years. Good content you can't find elsewhere is worth it.

That being said, $99/year is on the edge of what I'm willing to pay. I've very nearly let it lapse because NYT Business is pretty darned good (sometimes better) and free. (NYT Select never bothered me because I'm only interested in their news, never cared much for their opinions!)

I'd be much happier if I could have delivery of WSJ to my Kindle, my BlackBerry and my desktop for $6/month. (Right now, that would cost $18.24/month.) I'd pay that to NYT as well. And I think that kind of price point might dramatically widen the market too.

That being said, both should adopt this method of "unenforced subscribership." Sure you can clear your cookies or use another browser, but how many people will do that? A very small minority. Your average people will discover, then buy, if the fee is reasonable (especially if the benefits extend to Kindle and mobile).

brentsmi · 5 months ago

You can get delivery of the WSJ to your iPhone for free via their ad-supported app. I read it on the bus commuting to the office this way and love it.

aaronklein · 5 months ago

Yes, I think the BlackBerry app works the same way. I'm a subscriber though so I can't tell. :)

vasudevram · 5 months ago

Aaron,

Your point - about "unenforced subscribership" - with the emphasis on the word "unenforced" - resonated with me. It's somewhat along the lines of a recent comment I made on Fred's "Exclusivity and Competition" post, which is here:

http://www.avc.com/a_vc/2009/07/exclusivity-and...

I made multiple comments on that post, so to make it clear, I'm referring to the one that has these words near the start of the comment:

"True, but"

I also agree with your point:

"Your average people will discover, then buy, if the fee is reasonable"

At least, many of them will, if not all. Why some won't is a big topic - big enough for a post in itself, which I may do later :-)

- Vasudev

fredwilson · 4 months ago

I agree that subscriptions should work everywhere; web, mobile, kindle, etc

I think nickle and diming for every format is a terrible business practice

fortune8 · 5 months ago

I don't think there is such a thing as loyalty. Repeat business is the result of services provided. I am over 30 and will not pay for content. This day in age, you can find at least 80% of the information out there.

benjaminjtaylor · 5 months ago

Conversely, I DO believe in loyalty, if the product stands for itself. The strength of the brand is based on the quality of the product they produce. If the New York Times built a subscription service the right way, I would readily pay for content. I don't believe charging only for not opt-ed will work, and not withstanding everything they've already given away, they're smart enough now to know that. Implementing subscription(s) based service on the types of content (to Fred's point) would be a mistake too - too subjective.

A simple flat rate works, I would even be willing to pay per section. For example I read everything from http://www.nytimes.com/pages/technology/index.html - Internet, Start-Ups, Business Computing etc.... but I spend little if any time online (beyond the Sunday edition) on style, travel, and health. A multi-tiered subscription model could work.

In terms of loyalty their writing, fact checking, interviews, in the field process of professional journalism is what keeps me coming back, loyal, and for that willing to pay.

fortune8 · 5 months ago

I guess it all comes down to quality, value, and service. For example, I wear a Rolex, but drives a Corolla.

fpeyre · 4 months ago

This is a very interesting model: the section-subscription. I'm facing the same problem with the NY Times where there's a lot of their sections (personally it's going to be Automotive, Sports etc.) that just don't work for me.
If I could subscribe only to the ones that bring value, I'll probably be even more encouraged to pay for it.
And would welcome a reduction of my print subscription for that matter...
Obivously, the tough piece on the print side is that the NYTimes sells the total audience as a rate base. If you start segmenting your subscriptions, the print sales team will have a tougher job selling what's already abusive rates...

fredwilson · 5 months ago

So you don't go to the movies in the theater?

fortune8 · 5 months ago

You do have a point. I do go to movies, but on average 2x a year when there is something I really want to watch. That happens to fall within the 20% of the information out there that cannot be had for free. I guess it could be free if one is willing to wait or look for torrent download.

Somethings you just have to pay for and somethings you don't. It all boils down to how bad you want it and your perception. For example, my wife will not buy counterfeits.

fredwilson · 4 months ago

Exactly. People will pay for content. But it has to be high quality and consistently so. HBO is an example of that in TV

aaronklein · 5 months ago

If enough people refuse to pay for content, there will be no content.

Then people will start paying for content. ;)

vasudevram · 5 months ago

Good one :-)

I was just thinking that myself - from the opposite direction, but same point, more or less - if content on the net stops being free, then people will start paying for it :-)

vasudevram · 5 months ago

>then people will start paying for it :-)

Or will learn to do without it - but of course many won't be able to. At that point, they will start to value the (good) content more ...

I think my new email sig is (somewhat) relevant here :-)

"If you think it's expensive to hire a professional to do the job, wait until you hire an amateur." --Red Adair

fredwilson · 4 months ago

Great quote!

vasudevram · 4 months ago

Glad you liked it :-)

phillipbaker · 5 months ago

Repeat business IS the result of services provided. Loyalty is making customers' second transaction/interaction/experience with you more convenient, more comfortable or more rewarding than making their first transaction/interaction/experience somewhere else.

I agree with you that in the case of media the answer doesn't lie in aiming for exclusive coverage of news facts that you can't get elsewhere because that is impossible.

Ryan Jacoby · 5 months ago

I like the notion of the 10th (or nth) time as a concrete milestone that says "hey, we've got a relationship now." Super simple. Nice understandable design cue.

It makes me look for other opportunities to reframe from production/value chain thinking to monetizing the relationship (market making, connection-making). That's the mindset shift missing in publishing. In this case the FT is brokering a relationship between the reader, the author and, at times, advertisers. They also help to uphold quality (journalism, good authors).

It seems the atomization of both the content and the audience necessitates a coming together again. Is it perhaps even inevitable? Entropy and technology pulls the stuff apart, but needing to put food on the table brings them back together again.

Ryan Jacoby · 5 months ago

The point at which they charge you is kind of like an invitation to participate. That comes through in the way that Fred frames it in the last sentence "... I would like to help pay the costs of the people who create it."

fredwilson · 5 months ago

I'm not sure about bundling. I think it hurts you online. The NY Times is not as good at sports and business as it is at news, opinion, world news, and art and culture. Maybe they ought to get out of the sports and business content creation and just syndicate or link to the best stuff

Ryan Jacoby · 5 months ago

Oh... yes. I didn't quite mean bundling or amalgamation of content, rather being the host / connector in a specific relationship. That, I suppose, go back towards portals and those aren't things I'd pay for at all. What you say makes a ton of sense. And I agree, the NY Times is not good at sports! The WSJ is doing better these days even.

shafqat · 5 months ago

Fred - I think you've hit the nail on the head here. Media/news companies should focus on the content that they can do best. If you have a competitive advantage in world news, opinion or culture, then invest and focus on that. Get rid of the fat. That's the way successful businesses have been built for hundreds of years, and that's not about to change for newspapers.

bobwyman · 4 months ago

"Maybe [the NY Times] ought to get out of sports and business content creation and just syndicate ... the best stuff"
+1, Absolutely!

Key strengths of the NY Times are found in their editors, their understanding of how to manage the news production process and their understanding of how to select and train writers. They could greatly increase the quality, scope and profitability of their product by focusing more on "editing" much of the news rather than writing it themselves.

bob wyman

Jeff Jarvis · 5 months ago

One more thing: Doesn't this model punish your best customers and reward your worst?

fredwilson · 5 months ago

I don't think so. Flickr uses this model. They aren't punishing me. I like to pay when I am a power user of something. I don't buy that people don't like to spend money. I think people don't like to spend money on stuff they don't like

phillipbaker · 5 months ago

I think the difference is that at Flickr there is a better on-ramp that gets user investment early and there is also a community.

There are dozens of other places to upload unlimited numbers of photos for free (I think, right?!) in the same way you can go elsewhere for news. I think one reason people choose to pay Flickr is because they have already uploaded/named/tagged/organized/shared photos within the free limits and it's more convenient to pay to avoid the hassle of starting over somewhere else (exit barrier). Another reason is the community that exists at Flickr that makes everyone's photos more valuable by being in one big pool.

I can see Jeff's point on this one, I think paying for an article that someone else is reading for free could be at least a psychological barrier for the best customers although I absolutely agree with your philosophy of charging users rather than charging for content. It might mean putting more effort on making that clear to customers that that is what is being sold.

I think Jeff's point also depends on how those first X visits happen. Someone going straight to the site as a loyal reader is different to someone who reads a lot of news and happens to get directed to the FT (or wherever) X times. I think it highlights the idea that these visits need to be used either to earn a registration or get users more invested like they are at Flickr.

fredwilson · 4 months ago

Great points. The key is building all of this logic into the system without making it too complicated. It has to be simple

Trevor Plantagenet · 5 months ago

This statement is really really troubling coming from you, who is ostensibly someone who thinks about this 24x7. Your best customers are always the ones the most invested (in all senses of the word) and all successful businesses tax the faithful to reach the faithless.

Wei Yang · 4 months ago

If a hypothetical guy is a repeat visitor of a restaurant, eats the most food and refuses to pay for any of it. He would not be your "best" customer. He would be your biggest drain on resources.

A best customer would be an evangelist that tips really well and invites all their wealthy friends to come and pay.

So no, it would not be punishing your best customer by requesting them to pay.

Mark Essel · 4 months ago

It depends on whether or not some of your best customers are just using your service heavily, or building on to its value, or evangelizing it's content (or a mix of the above). The assumption is that some of them wouldn't mind being charged for a valued service, especially if it's cheap for the value they get out of it. Internet subscriptions should be dirt cheap but allow something above and beyond simple utility, like having your comments sit above the free surfers. That'd be cool.

gian fulgoni · 5 months ago

So, if I simply delete my FT cookies I can keep reading as much of their content as I want for free? Not sure that's going to work too well for them.

fredwilson · 4 months ago

I've been educated a bit by my readers since I wrote the post gian. You have to register with the FT to get the free ten visits per month. I don't like the forced registration approach myself. I think it inserts too much friction. There are ways to cookie people these days that are not technically cookies and are a lot harder to delete. I'd go that way

chrsoz · 4 months ago

Hey Fred. Interesting post as ever, and timely in light of the AP plan that's been covered extensively in the last few days (which has some interesting characteristics, but is generally short-sighted in the extreme, particularly around the fact that they're over-valuing the content itself; not that I've seen any decent quant analysis on how they think their plans will play out and help the industry).

Re the FT.com 'frequency model', the deal is that the first 3 articles (per month) are free then you hit the registration barrier (cookie-based). Once you register then you get free access to a further 10 articles per month, plus the use of the portfolio and email tools. After that you hit the subscription barrier. It's all detailed here http://membership.ft.com/sitetour/index.shtml.

The model is definitely smart in terms of driving engagement (and using transiently free content as a vehicle to drive traffic and user acquisition to get the funnel filled), and that can be seen from the number of registered users that it's generated for the site (incidentally, the guy who pioneered the model, Ien Cheng, is now at Bloomberg (media side), via Google; so will be interesting to see how the Bloomberg web/media strategy evolves, and also whether or not they'll have a response to the AP situation since Reuters have already been mentioned as potentially becoming the AP-alternative). It's not had the same level of impact on subscriptions though, showing that premium content subscriptions (in this example at least) are still relatively niche in scale-terms (although it's given them a great registered user-base to work with and leverage, so good upside potential on the subs numbers). See the paidcontent piece on latest stats http://paidcontent.org/article/419-earnings-ft-.... So WSJ.com is still the big paid content success story (with their 'less innovative' model!), although WSJ's domestic market size obviously creates an advantage. (disclaimer: I worked at ft.com a few years ago)

As per the point of the article, news/media organizations need to focus on the value beyond that in the content alone (that's traditionally just been a marginal opportunity anyway, generally about covering ops/distribution costs, with the monetization mainly being ad-based), and that's the audience/community piece (and leveraging the community to create a layer of value and interaction around the content - something that the FT is generally poor at, e.g. no comments system on the core publishing platform). I'd go further and then say there needs to generally be a much clearer focus on tools, services and utilities, creating something that there's way more reason to go back to, and to use continuously, above and beyond pure content consumption. What that means depends on what market you're in, whether that's business-oriented or consumer-oriented - publishers will need to find their own mix of what can work in the space that they're operating within. I think of this as the 'media stack', i.e. the combination of content, community, services and utilities (with the monetization baked-in) that creates the overall value-proposition/model that tech-savvy media companies will take out to their users (including things like events as well as online stuff), and that'll really help them to add value and differentiate in a tightly integrated way.

It's definitely an interesting time for all publishers as they attempt to navigate through this phase of massive consumption/behaviour/monetization transition. The only thing that is for sure is that you can't just port the old ways online and expect to succeed; it'll be as much about organizational/cultural re-engineering as it will be about product proposition and monetization techniques (a bit more on this in a recent comment I made on the Broadstuff blog post about Conde Naste working with McKinsey to transform their business - http://broadstuff.com/archives/1797-Conde-Nast-...).

fredwilson · 4 months ago

Chris: great comment. Seriously. Thanks so much.

Ien explained this general idea to me a while back and I've been a fan ever since. Its elegant, simple, and respects the architecture of the internet.

fredwilson · 4 months ago

Chris: great comment. Seriously. Thanks so much.

Ien explained this general idea to me a while back and I've been a fan ever since. Its elegant, simple, and respects the architecture of the internet.

fredwilson · 4 months ago

Chris: great comment. Seriously. Thanks so much.

Ien explained this general idea to me a while back and I've been a fan ever since. Its elegant, simple, and respects the architecture of the internet.

fredwilson · 4 months ago

Chris: great comment. Seriously. Thanks so much.

Ien explained this general idea to me a while back and I've been a fan ever since. Its elegant, simple, and respects the architecture of the internet.

Alex Iskold · 5 months ago

I am glad we are at least willing to re-visit paid content, I think this is the simplest model, that has worked for a century.

We all pay for quality stuff and quality content is still scarce, it's the subpar content that is abundand.

I hope we converge on the world where major newspapers are syndicating best relevant bloggers and have a model where they are able to pay them and at the same time, they pay their own journalists.

fredwilson · 5 months ago

I agree but it has to done in a way that is consistent with the way the internet works.

Another thing we need to work on is payments. If the NYT asks me to pay via amazon or paypal (ideally both), I'd appreciate that very much. I don't want to whip out my credit card everytime I pay for something on the net

scott crawford · 4 months ago

Rings true. If Amazon newsstand allowed me to 1-click for content, I already do and enjoy that experience. Lots of problems solved. Happiness.

kidmercury · 5 months ago

i am surprised you are pro paid content. dont you think semantic technologies like your company adaptive blue benefit from having more free content to synthesize? or at least that is the way i see it, i tend to think of companies like yours as being a part of the profitable business models that will emerge dependent upon free content.

Alex Iskold · 4 months ago

Good question. I think that semantics and paid are not coupled. content can be marked by RDF or it can be available via API and does not necessarily have to be free.

Glue actually relies on APIs to recognize things and regardless, it would work, wherever user goes, whether paid or not.

Personally, I can't see the way around Freemium models that Fred has been advocating both for newspapers and products like Glue, although Glue is slightly more hopeful.

fredwilson · 4 months ago

Me too Kid. I don't think paid content works too well with a lot of the newer web technologies.

Paul Smalera · 5 months ago

Fred, I just wrote a post about what I think is the evolution of the FT's form, and the gist is, pay for today, free archives.

I said in part: Your online models should mimic the way buying a print newspaper works: charge for today’s news, but make the archives free.

Make the cost of that day’s online paper tiny, the way you once did on the newsstand: 25 cents. For 25 cents a day, or $7.50 a month, payers get that day’s news as soon as it hits the website, which is often the evening before. To help spread conversation, they also get the ability to email the story to colleagues using special URLs that keep the story on lock down for 24 hours. If the colleagues want to read it, and they don’t subscribe, they have to make a micro payment, maybe as little as .05 cents, maybe less. (Make it enough to make a day pass compelling, and tell users that, “for .20 cents more, get access to today’s entire paper!”) Maybe payers are given five “free” email links every day, with which they can unlock a story for a single, “email to friend” use. The great thing is, after 24 hours, all these paid and controlled links go away and redirect to the story’s archive permalink, which are forever FREE. And searchers and browsers after 24 hours only ever see the free version of the story, and not the pay wall.

This way newspapers reward honest users of their website but aren’t punitive towards free readers.

Most newspapers these days block readers with a pay wall when they go to the archives, mistakenly believing that in their pasts lies a great untapped source of revenue. But the opposite is true: their asset is their immediacy, their on the ground reporting of today’s important news. By tomorrow, the news is historical record. Given today’s longevity of conversations about interesting articles and stories on the web, with comment threads that go on for hundreds of comments and many weeks, the last thing papers should do is lock the original document behind a pay wall, making it difficult for their brand to benefit from the discussions spurred by their staff’s hard work. The current scheme of free articles and mostly paid archives break the established model, which was very successful. It’s as if every newspaper was sold with a mechanism that made it burst into flames after one day. It actively inhibits the conversation the newspapers claim to want to be a part of.

What do you think? (Oh, just to add-- I hate micropayments. But--I think this is one limited example of how they could work, and ideally, papers are charging by the month or year, the micropayment is just a teaser/call to action.)

fredwilson · 5 months ago

I think archives should be free. But I don't like the requirement to pay for breaking news. Newspapers don't have a lock on breaking news. If you turn a reader away from getting it from you, they'll get it somewhere else. I don't think you can charge for content in any 'bucket'. I think you need to charge a segment of your audience that is highly loyal, enagaged, and willing to pay

William Mougayar · 5 months ago

Fred, I totally agree about not paying for breaking news, as you can't put that genie in the bottle. It will escape to another route. But I think newspapers haven't done "archives" right yet. They've done it like a library system, and that has little value. Until they intelligently semanticize that content, they can't provide added value beyond searching historically, which isn't all that valuable.

K. Warman Kern · 5 months ago

Right and right. Directionally, I've never understood the idea of giving away news analysis for free and charging for archives. But, Fred is also right about not charging for breaking news. Competition is not just online. As long as 24 hour news channels and radio are still around, can not charge for breaking news. But can charge for custom delivery (to your preferred "receiver(s)" and later, in-depth reporting. And can charge even more for integrated real time "managed" conversations.

Archives aren't worth as much as news. But still don't think they should be available to non-subscribers in their entirety for free. I've seen some models in whichone can search archives for free then "cherry picking" archives for a minimal "one-click" (aka pay pal or amazon per Fred) charge.

Paul Smalera · 5 months ago

Just to slightly redirect this, I really don't mean "breaking" news. In fact I sort of thing that breaking news of real import should come out of the pay-for-today system when warranted. (That is, the initial news of an attack, plane crash, national emergency, etc. Followup reporting and analysis should go back under the umbrella.)

What I mean is that everything in the paper and on the site published that day is chargeable. Videos, blog posts, sports scores, analysis, opinions, etc. Maybe, maybe not blogs. But everything else should carry a tiny charge, with the goal being to convert people to be subscribers, whether its for the day, week, month, year. I mean, if it was a Paypal type system, would you even think twice about paying a quarter with two clicks to get the day's paper? Maybe some people do, but they were never customers anyway. They're the ones that wait 24 hours for the stories to move to the free archives. Where they are served advertising. As Fred says, this has to be a very low-friction system to work, but it's based on the print newsstand/subscription model that served newspapers well for decades.

K. Warman Kern · 4 months ago

I subscribe to WSJ.com and receive news alerts on my blackberry. I think this is a paid feature. It should be. Once in a while they are behind the morning tv news scroll at the bottom of the screen, but most of the time they are first. They may be using the same feed, but I do get it on my phone which alerts me when a new email arrives so I don't have to focus on the scroll on a screen to see if anything relevant is going on. There are still ways to improve upon this feature to justify charging as competitors match.

Creating value with interactive technology needs to be in the context of all the choices we have to get information, be entertained, or communicate. Competing in a multi-dimensional marketplace can be pretty confusing.

I think there are 3 thoughts to consider: 1) the business model radio and television used to disrupt the media industry - free, ad supported - may have made a lot of money for a short period of time for a few companies at the expense of print competitors, but it de-valued the media industry as a whole. When entering a market, one must contemplate that you could win. As Colin Powell said to Dick Cheney, "You break it, you own it." 2) disrupting the market by offering a superior product that will command a premium is much more fun on every level (to make, to sell, and to buy). 3) the law of market gravity is real: the price you start with will go down. So if you start free, then what? You may find cheaper ways to produce, sell, or finance, but the competition will not let you raise price without meaningful value improvement to the consumer.

David Semeria · 5 months ago

I think the FT approach is definitely a step in the right direction, but the model still has some floors. According to the FT's subscription page the cheapest subscription (monthly) is still over $25. There's quite a gap between free and $25/month. Also the sign-up page is anything but friction-free (about a dozen fields) and it's not totally clear whether you're just subscribing for a month, or agreeing to be billed each month. It's also unclear (again from the sign-up page) whether you're paying for access until the end of the month, or for a given number of days.

All of these aspects create a resistance to conversion, which drives up the subscription price, thus creating even further resistance. This is the problem with all subscription-based services.

We should look at the way things work in the real world. If every time we bought a can of Coke, we had to fill-in a form and agree to a Coke subscription, I'm sure we'd think twice. Almost all of our consumption is metered (drink ten cans of Coke, pay for ten; drink none, pay for none). It's quite hard to find examples of subscriptions in the real world outside of print and broadcast media.

The internet is bidirectional. It is very easy to log how often you use a site. The key is to find a low-friction model (ultra fast, or no sign-up) where if you stop using a service, you stop paying. That will reduce fear of lock-in, and hence promote conversions. The higher the conversion rate, the lower the price. Everyone wins.

egoboss · 5 months ago

Nicely put, David.

The publishers need to recognise that just like Coke their output (product) is a luxury item - not even an impulse purchase, let alone a commodity.

If we don't choose their product the world will still keep turning. Typically they only report news - they don't make it.

Make a compelling product/brand, make it easy to consume and people will pay for it - 'pay' is maybe the wrong expression - 'buy' is more of an endorsement and suggests a bond between the vendor and customer.

I 'buy' Coke - I 'pay' for my tap water.

Think I'll leave it there, I'm in danger of confusing myself!

;-)

David Semeria · 5 months ago

Thanks Carl.

As I've said before, everything is interconnected. The newspaper discussion encapsulates the ongoing arguments on web business models, the (perceived) value of content, web technologies, the value of communities etc.

The only thing I would add (apart from being mortified at having written 'floored' above) is that this issue jars the boundaries between the real world and the internet - because newspapers (for the time being) exist in both.

I've already mentioned above why I think web business models should more closely reflect our experience in the real world (summary: subscriptions are bad, pay as you consume is good) so I'll just briefly mention how internet best practice enters the equation.

The web has changed the rules with regard to information discovery. In the past, we didn't so much trust newspaper editors to assemble our information flow for us - we had no choice. It was inconveivable pre-net to have access to the 'raw data' needed to compile our own personal broadsheet. Now it's feasible.And so we are no longer willing to pay newspapers for their ability to aggregate (we can do that with an RSS reader) - which means that all that is left is the quality of the content.

I'm perhaps in the minority because I don't think blogging can fully replace proper journalism. I think blogging is great in specific verticals (such as this blog) where one person's opinion carries a lot more weight than any given journalist's would. But not all content fits this template. Good journalists don't just comment on the news, they make it. They knock on doors, they go snooping, they get away from their desks...

As the saying goes, you only miss the water when the well runs dry. If newspapers and magazines were to disappear tomorrow, then there would still be lots of opinion. But who's going to bring the non-obvious stories to us? Google search or twitter will only get you so far. Sometimes you've just got to get outside. Who's going to expose the CIA or Goldmans, or, for that matter, the slimy mayor of Smallsville? This type of work requires weeks of research into meeting and talking to people, of doing, basically, what good journalists do - getting out and digging. This work needs to financed, coordinated and vetted.

It's an art, and whilst many journalists don't do it, the best ones do. The result is quality (call it premium if you like) content. And as the judge said, people know it when they see it - and I'm betting they'll also be willing to pay for it, too.

William Mougayar · 4 months ago

Re: "Good journalists don't just comment on the news, they make it." I disagree.
Journalism has been a monologue, but it should be a conversation. Look at the vibrancy and value from this blog's comments.

The NYT gets only 6% of their traffic from their blogs. It's paltry, but that's where the social juice can start to flow from.

David Semeria · 4 months ago

I agree the web makes community interaction much easier, and newspapers should definitely leverage that.

But my comment regarded origination. Sometimes a story doesn't just fall from the sky (or land in your inbox).

fredwilson · 4 months ago

I like buy vs pay. Nice semantic distinction

fredwilson · 4 months ago

I agree that the transaction costs both time, energy, and money are still too high on the web. The places they've been lowered; amazon, itunes, in game transactions, etc are the big winners right now

timraleigh · 5 months ago

I am a frequent reader of the NYTimes and supported their various attempts at creating additional revenue. For instance I subscribed to the alerts feature until they made it free. I don't understand (other than operational inefficiencies) why they (NYTimes) discontinued charging me for a (virtual) product which is now free. I always thought that there is/was a market for archived news but few have created an adequate consumer product. The WSJ's partnership with Factiva changed so often (on, off) it created a huge barrier to usage. The NYTimes archive product is OK, but $3.95 an article is basically a signal that the cost to run that service (indexing, storing and retrieving) rationalizes a premium price.

DaveinHackensack · 5 months ago

"If they roll it out, I'll gladly sign up because I visit the NY Times at least ten times a month and I would like to help pay the costs of the people who create it."

Fred, if you want to pay the costs but you eschew print editions for some reason, why not subscribe to the print edition but ask the Times to send your paper to a local school instead of your home? If memory serves, the Times offers that option for subscribers going on vacation, so I assume they'd be willing to let you donate every print edition to a classroom too.

fredwilson · 4 months ago

We get the print edition in our home. We've been a paid subscriber to the print edition for over 25 years now. I just don't read it in print very much. I prefer consuming content online

Mike · 5 months ago

interesting post & fascinating topic. i think the NYT can & will pull it off and a freemium model can work for them. i think one of the reasons select failed was due to it's being a stand alone product. i can definitely see a model whereby opinion, politics, business content is premium, especially when it breaks, and other sections are free. i personally think the NYT needs to go online only, but that's a separate topic.

the FT approach is interesting, but has it really been that successful of a subscription driver?

i agree with shafqat that it comes down to quality, differentiated content. people will pay for NYT, as they do for WSJ, b/c the editorial voice & quality is unparalleled.

jasonkrebs · 5 months ago

Rarely does a media company make money offline on subscriptions. As a matter of fact, circulation/subscription models are almost always a huge loss.

Why do these companies want readers to pay online? Because this is how old media people make their new digital colleagues feel the pain of how terrible the former business model was (is). If any of them planned to exit the print business, they wouldn't begin to charge online.

TVisio · 5 months ago

If I had the money I would pay for Investor's Business Daily and forget about The Times, WSJ or any others. I am scanning more and reading less. Is this a sign of The End Times (a newspaper yet to publish)

fredwilson · 4 months ago

Yeah, but subs online are way more profitable

Harish Venkatesan · 5 months ago

I think the last sentence expresses an important mentality that more people need to adopt, if, at the end of the day, we'd like to continue seeing high-quality content out there:
"I would like to help pay the costs of the people who create it"

kidmercury · 5 months ago

If they roll it out, I'll gladly sign up because I visit the NY Times at least ten times a month and I would like to help pay the costs of the people who create it.

no worries boss, the Times is a mockingbird, i.e. a puppet of an element of the CIA, which is partially funded by your tax dollars. i assume you're in a high tax bracket and thus are getting cheated more than your average american slave i mean citizen. so thanks boss for your above average contribution towards creating the finest propaganda outlet the world has ever known! :)

thisisananth · 5 months ago

What if I visit the site just like that to check the headlines but may not read? because I just visit that site and see the most read articles for Milton Friedman or Paul krugman articles. That way I have to careful not to visit the site more than ten times.. May be they can ask me to login after I click on any story that way they can just allow me to see the previews. But I too like the NYT very much.

fredwilson · 4 months ago

Good point. I'd let people check the headlines (like techmeme) as much as they want for free

vivekjain98 · 5 months ago

But users could very easily clear the cache,cookies history and browse the site again after 9 times... though not recommendin :)

fredwilson · 4 months ago

Of course they can. There's always a way to beat the system if you want to. The trick is creating a system people don't want to beat

ilan peer · 5 months ago

what's the bottom line?
will these serious/frequent/power users payments cover as half as before?
and off topic, AP new thoughts of tracking and hunting linkage is worst.

hypermark · 5 months ago

Fred, while I agree wholeheartedly with the platitude, I think that it belies a few realities.

One, while not all content is created equal, a whole heck of a lot of it is. In the NYT example, there are a few star writers, but none of which are so differentiated as to drive users to pay (hence, the failure of Times Select).

This is one reason that the news business is very unlike the movie business. I won’t go down the block for a cheaper action adventure story vs. paying for the latest Ridley Scott directed, Christian Bale starring vehicle.

By contrast, there are 10+ good “enough” quality news/opinions sources that are easy to find and well-indexed vis-a-via Techmeme and Google News.

As such, the NYT’s of the world face a very complex conundrum. Their brand is their content, and without continuing to cultivate their content and innovate the way its presented, which costs money, they have no durable audience.

I see this one every day in SF, where the SF Chronicle continues to shrink down to a pamphlet in the face of new budget realities. The net effect is to only accelerate subscriber attrition rates.

I think a better path, which is not incongruent with freemium models, is to:

1) Better define linkages between online and offline (e.g., print subscribers get access to deeper analysis, better tools for saving, excerpting, sharing and finding related content);

2. Ala Dale Dougherty’s suggestion, create new types of media/engagement units that reward loyalty, communit-ize it, perhaps game-ify it;

3. Re-think segmentation (and pricing) across high-end, low-end, hyper-local, vertical specific, and re-work the product accordingly. The bottom line here is love it, or hate it, no one asserts that the high production value of Michael Bay’s Transformers can be emulated by a small handful of videobloggers working in a garage. HBO sub numbers live and die by original programming (think: True Blood, Sopranos) that free and pure syndicators can’t emulate.

The NYT’s of the world have to figure out what they are that a focused, less expensive blogger or meta-professional can’t simply replicated.

Sadly, this separates those that can meaningfully, unquestionably differentiate from those that can’t, which means a whole lot more hurting ahead before the creative destruction process works it’s way through.

Btw, check out my post on this topic if interested:

Old Media, New Media and Where the Rubber Meets the Road
http://bit.ly/zwTw8

Cheers,

Mark

julie_poplawski · 5 months ago

I read the NY Times more lately because it is IS on-line sorted for me and I get the articles I am interested in, However, there is the wonderful one sunday morning each summer when somehow I shake the family and get to savor a cappucion and I wnat to do that with ink on my fingers and the tactile sensation of sorting the paper and reading it "in-person." Kind of like I love Twitter and facebook for keeping up with people but every now and then it's nice to see them face to face.

fredwilson · 4 months ago

Indeed

im2b_dl · 4 months ago

I love this comment...it is what I hear over and over... the Sunday edition is attached to an event. It is in these kind of ideas and concepts journalism should be reinventing itself...and the "story" structure...meaning different output for modern use. There are long forms and short forms... we are finding the same things as we are building/reinventing show structure for online tv and it's production.

JeffreyJDavis · 5 months ago

Fred -

Great thought-starting and discussion-prompting topic, as usual. As a physical products guy in a private equity sponsored portfolio company, I always struggle with the Freemium model, as interesting as it is in some business environments.

I pay subscribe to a number of print magazines. I also pay for quite a few online services. I struggle to pay a subscription to many of the online content providers, as the price of entry tends to seem higher than my perceived value on an ongoing basis. Several sites with a similar model as you describe (i.e. 3 free reads, then a $9.95 monthly subscription) have never enticed me to click through that marginal revenue producing article.



Is there a tweak on the FT model you mention, which is kind of an "Almost-Freemium"? I have two observations:

1) The cost of incremental distribution for an individual article to an individual user is almost zero once the article is written and published
2) Frankly speaking the value of consuming an individual article to an individual user is pretty low too, unless the content is really unique and earth-shattering.

If my first 9 article views at FT were free, and the 10th cost me $0.25 or something similar, I bet I would click through more times than not and could easily amass 5 - 10 revenue generating events / month for the content provider. I would wager that most content consumers with a spent Starbucks cup in their wastebasket would probably feel similarly.

A pay by the sip approach where each sip was reasonably priced might aggregate into a reasonable revenue stream if modeled appropriately.

Just a thought.

fredwilson · 4 months ago

The conversion to a transaction for content is so low that I'd hate to have to try to get it every time. That's why I like subscriptions. You get it once and you've got it. As long as the value matches the price, they keep paying

DaveinHackensack · 5 months ago

I made this related point elsewhere yesterday ("An Undiscovered Gem from Barron's"),

When journalists lament the decline of the print business, they ought to consider that the Google- and Craig's List-powered disruption of the advertising model isn't the only reason for print's decline; so is the decline of journalism itself. A lot of what passes for journalism today simply isn't worth paying for in any medium.

I gave a couple of examples at the link, but I'm sure most of you can think of similar examples.

jonsteinberg · 5 months ago

Did not know that was the FT model. Very much in line with the "Extended Trial" notion I was arguing for in the comments of your post a couple weeks back. It's yet another "volume" metric that is triggered off of frequency, as opposed to just quantity (pay for more gigs). FT example would have been good for Anderson's book. Thanks for bringing to my attention.

DaveinHackensack · 5 months ago

Another thing the FT does is give those who attend classes at the NY Institute of Finance complementary six month subscriptions (Pearson owns both the FT and the school).

Miss Xu · 5 months ago

Fred,

Doc Searles talks quite a bit about this topic as well... Personally, I only have a limited amount of time per day/week/month to read the news. I spend a lot of time doing secondary research + am frequently frustrated by the usability/pricing model.

Freemium doesn't really work for me. I'm fine to pay for content, just make it really easy so I can get on with the rest of the stuff that I need to do.

As an example, I may need articles from 7 different publications, each of which requires me to register/sign in + plug in my CC details before I'm able to grab the articles that I want/need. It's a total pain. Plus, most of the sociology/academic research publications have systems that just simply don't seem to work. It's a royal pain.

Sooo what _I_ would do if I were queen of publishing would be as follows:
1) create an ecosystem w/ open API for charging + SSO (Single Sign On)
2) enable a plug + play tool for any publisher to make it easy for publishers to be part of the ecosystem
3) adopt 'pay per view' pricing models, 3 levels:
$$$ Level 1
$$ Level 2
$ Level 3
4) each level gives the user a # of credits towards _any_ publication, but publications are not "weighted" the same

Just some thoughts...

fredwilson · 4 months ago

Excellent idea. Do it!

K. Warman Kern · 4 months ago

bingo. I add more to simplify http://twurl.nl/urqgy7

It would take forever for a start-up to launch this model. The AP could execute in collaboration with their member newspapers, tomorrow. I suspect they are "inching" their way there with the digital wrapper discussed by the CJR here: http://twurl.nl/tuz8em

Technology is not the barrier. Uncertainty is. If readers here think this is a good idea they should lobby the AP and their member papers to move in this direction and provide specific preferences.

K. Warman Kern · 4 months ago

RADIO AND TV OPTED FOR FREE/AD-SUPPORTED MODEL B-CUZ HAD NO CHOICE: NO WAY TO COLLECT MONEY.

K. Warman Kern · 4 months ago

When offered quality for premium, we pay: HBO subs & $ grew in 4th qtr 2008, despite economic crisis. We do want products we are proud to create, sell, and buy.

Russ Somers · 5 months ago

Fred, your thoughts seem right on the mark to me. When you monetize the content you're opening a hot-dog stand in front of the free information buffet that the world is becoming. There's some value to be added by filtering, packaging, and validating - but as consumers of information become more sophisticated and have better tools, that need lessens. I wouldn't walk away from a model along those lines that was working, but I'd be aware that the value is diminishing over time.

The audience, on the other hand, remains as valuable as ever.

MayankDhingra · 5 months ago

1) From the looks of it the cookie mechanism of FT isn't a hard nut to crack.

2) Completely agree with @Cody Brown's point #2

3) Is it me or the content is still not FREE ?. Bring on Chris Anderson

Vaibhav Domkundwar · 5 months ago

I agree, however, like your title says, I think this sort of a model might work best for niche audiences rather than mainstream news sites like NYT which definitely need to have a lot, if not all, content freely available. The FT kind of model can work for a lot of content sites, not necessarily just news sites. For example, I am pretty sure MarketingSherpa might find this model more lucrative than their subscription-only model, especially since their content is very valuable and their audience is well defined. Their audience won't mind paying every month if they exceed a certain number of visits. I am not sure it could work generally for all sorts of news sites though.

MarinaMartin · 5 months ago

No one seems to have mentioned this yet, but having content behind a paid wall does *not* exclude it from appearing in Google search results. Google has a special arrangement for walled gardens wherein you must agree that the searcher can view the content of the page that appears in search results (but no pages beyond it). So, if a search brought me to page two of a paid NY Times article, I could read page two, but not page one or three without paying.

Newspapers are a conduit between sources and the audience. As we've all seen, the Internet is allowing sources to reach an audience directly, making the newspapers unnecessary in many cases. Instead of focusing on reporting news, they should focus on helping people understand the news and learn. An article on Sunni violence would be free to read (probably ad-supported), but then I can pay $10 to take their online "Learn About Sunnis vs Shiites" course so I have context and can better participate in discussions (online and off) about the topic. Yes, there is an increasing number of free educational content out there by colleges, but if you actually take the time to go through it, it's not very good for self-learning, and probably downright intimidating for most people.

Jasonwilk · 5 months ago

Fred,

The 10 visits model doesn't work for me as a content consumer, but it creates a better market for my blog who is looking to take the best news and dish it out to the thousands who read it. If the WSJ of Ft write an article that is worthy of passing on, I along with hundreds of other blogs will write a similar article which is distributed to everyone else for a price of $0.

fredwilson · 4 months ago

Agreed. Competing with free is hard. Too hard for most. But some can do it

abhic · 5 months ago

Interesting insight into how a high-value publisher could convert free users to paying customers. The bigger picture, as others are discussing, is about the search for sustainable models.

I would add to this the value of building engagement with more than just content. You get the user to come the first time, but besides content is there any other compelling reason that you can get him to visit another n > 10 times?

Etsy did a great job at innovating on eBay's system - let each user define his/her experience. As an artist or manufacturer or seller, I can create a more personal outlet on Etsy than on eBay. As a consumer, Etsy has a richer & more personal experience than eBay. There is space for both and both will find more ways to build on their core.

Similarly, FT and WSJ have a niche audience and they will thrive for now. Others will have to think about owning the engagement on-site & off-site and not pursue the 90s mentality of trying to own the user. All content cannot be free and neither can one monetize all audiences as well.

Guest · 5 months ago

We are in for some big changes, resource based economy, and open free knowledge for all.

Tim Cohn · 5 months ago

"Google delivers more than a billion consumer visits to newspaper web sites each month."
http://bit.ly/GoogleNews

William Mougayar · 4 months ago

Right. If the newspapers haven't been able to monetize that additional traffic, it's not Google's fault or anyone else. If the NYT cannot monetize 18-19 million uniques per month, they own that problem.
Here's a fact- NYT traffic went up by 33% in 2008 from 2007. Why couldn't they take advantage of that? In 2009, it's been dropping to flat, but that's because they failed to capitalize on the surge in 2008. We're seeing the results of earlier symptoms now.

Bob DeMarco · 4 months ago

I like the pay for a drink or pay for a bottle model. If you want today's NT Times online it costs you 25 cents. If you want it for a month it costs you 6 bucks. If you want it for a year around 59 bucks. Maybe offer a daily happy hour price--15 cents a day after 4 o'clock.

The real issue is how people consume and pay for information. How many magazines do you get each month? How much are you willing to pay for a subscription? What is your monthly or annual budget for content?

They preferred payment model resembles the way we pay for toll roads and bridges--like the Sun Pass down here in Florida. You put X in the account when it is drawn down they automatically put another X in your account via your credit card. Could also be Pay Pal.

If you want to send content to your friends via email etc, you pay a nickel a pop for that one piece of content. Send it to 100 people costs you 5 bucks. Or you buy the right to email pieces of content in bulk. If you buy a 25 dollar chunk you only pay 3 cents a pop to send content to a friend. The more you use the cheaper it gets. The model works well for content providers since they get a crack at offering deals to bring in new subscribers when they send out the information for you.

These numbers will work better in the not so distant future for content providers when short term interests get high. The interest on the float will mean something.

My big guess is that Kindle will be the big winner in this game in the long run. Kindle is likely the IPod of print. Which brings up another issue, do you own Amazon?

Bob

Wei Yang · 4 months ago

But why would you pay to forward an article when there are tons of free ways to forward articles? Besides, if they're charging 25 cents an article, they should let you send it all for free and charge the new recipients the 25 cents to view it.

ShanaC · 4 months ago

It seem that they exist, as said before, in the fact that have an econsystem around their brand as well as their network.

What would charge for, acces to the brand or access to the network?

Eyal S. Goldwerger · 4 months ago

Few years back, NY Times charged $50 for access to its Op/Ed (and related) content online. As a loyal follower I subscribed, but have found emotional disatisfaction with the tiering I opted into. I tend to agree - it is hard to break up content without very clear "buckets" or "classes" that are native to the product tiered and thus create uniquely perceived different products. In the end, a newspaper is a periodic "digest", with each reader browsing (in print or online) at whim or personal pattern. FT's approach simply recognizes this - that where there are no truly natural segmentations in content that create similarly natural product tiers - artifical ones will always look to consumers... artifical. The "frequency" meter is an elegant way to segment the user base, keeping access to content natural, and segmenting users based on behavior and not a forced product definition.

fredwilson · 4 months ago

Exactly

mterenzio · 4 months ago

Can't one just clear their cookies and keep getting it for free?

mohitranka · 4 months ago

I believe he meant "server side" cookies, here...

fredwilson · 4 months ago

Yes. Of course they can. And you can download movies on bit torrent. Some will. Some won't

pasta2u · 4 months ago

The one problem I see with the model is what I'll call "re-news", i.e. some smart cookie will start a re-news website where content from FT and others with the same business model is copied and re-posted in the "re-news site". All this while they have free access, of course. Process could even be automated.
A more fundamental question that I would like to see addressed: how do we change the mindset of the internet community (including me) away from a "free" expectation.

fredwilson · 4 months ago

By asking people to pay and giving them a good experience when they do

David Semeria · 4 months ago

And also by my making frictionless payments the norm. If everybody paid then the cost of content would decrease so significantly that piracy just wouldn't be worth the hassle.

pasta2u · 4 months ago

@fredwilson + david semeria:
if it were that easy, I'm surprised it has not yet succeeded. I figure it is by now a deeply ingrained mindset in most of the internet community, and cosequently tough to change. Pink Floyd gives me a good experience, I still listen/watch for FREE on youtube.

RalphKha · 4 months ago

I totally agree with cody brown

im2b_dl · 4 months ago

Fred you and I should talk about this...my team out of Cambridge and LA seem to have a pretty good head start on exactly this. We should talk

im2b_dl · 4 months ago

Fred I would add... I think when it comes to long form video delivery or eventual replacement of tv delivery... this is actually a advertising + initiative. and the bar for freemium has to be set very very high. This should be an additional mark to supplement advertising because in long run "advertising +"will win out..the "winners" just have to find organic & that measure when your lrgr audience is not just "not offended" but gets something from it. Advertising will be the eventual model which actually is the core reason why video platform does not have any powerd in the quad when all is said and done. Content production and story structure is the only ones who can control this.

imho (worked in the tv / film industry too long to not understand this...there are a lot of lessons to be learned from legacy media that web dev has yet to understand what they don't know) again ...imho

danielrmccarthy · 4 months ago

Late to the party, but wonder if you could give more context to the statement that you think most papers would be better off without the print business. Why?

fredwilson · 4 months ago

Because I think declining print subs and high fixed costs of the print model are going to lead to large losses

SexySEO · 4 months ago

"the print model are going to lead to large losses" Uhuh... but at the moment there is no single good monetisation model for papers being only avialibale online to survive, to save high quality journalism, infrastructure.

fredwilson · 4 months ago

Lower cost content models (using blog and other forms of UGC) for local and better monetizarion (subs?) for high quality national seem to be the best bets for now

And ad models need to improve, of course

SexySEO · 4 months ago

"need to improve" Your ideas?

fredwilson · 4 months ago

These are not my ideas, but better targeting, relevancy, transactions in the ads, engagement with the ads, etc, etc

SexySEO · 4 months ago

LOL Sorry! :) I've heard it too many times - things aren't moving (and I meant any OTHER ideas?)

im2b_dl · 4 months ago

forgive me again...imho my team... have been having discussions on the model 1st... - journalism has to become a hybrid model of what spot.us is doing but with aggregation filters with standards and know how..and underwrittern like the PBS model both corporately and community based. Unfortunately most of journalism as an industry is going to have to be reduced to it's knees and messy for a while and then "trust" will rise as a key factor again in $ worth.

sorry these topics are what we are designing around every day

im2b_dl · 4 months ago

succinctly

danielrmccarthy · 4 months ago

Thanks. The cost structure currently has a lot of leakage and the exclusive print distribution (read "pay-only") limits the impact and relevance of the print product to the community. Analog can still play a part of a local media franchise, but requires that the utility, cost and relevance of the analog product gets aligned with economics for information consumers and advertisers. The center of the local media franchise needs to be the digital content hub, focused on news, UGC, aggregation of local digital assets, with economic focus on a)audience aggregation and low-CPM monetization; b)marketplace creation with lead-generating directory model; c)social content sharing across multiple social identities for link-juice and broader audience engagements. Analog/print products spin off from the digital content hub to create broader reach for specific audience segments, or to provide more in-depth paid information to a targeted segmented of the audience. No single strategy is going to deliver the kind of total market impact that you need in order to significantly influence financial results for your advertisers, nor the kind of information that is highly relevant for paying consumers.

William Mougayar · 4 months ago

Exactly. A subsc. model for online might give the NYT a short term spike in revenues, but they still have to solve their structural and systemic problems. At the heart of it, is their failures to fully understand and embrace the social media model. They need to innovate there, and not in gimmicks like TimesPeople, discounts on photos, coffee mugs,Tote bags and re-merchandizing their existing content. I'm not sure I care about the "story behind the story" (one of their paid service offering), but let me interact with Paul Krugman, Thomas Friedman or Roubini around their opinions, and I'll pay for that.

From what I read in Gawker on the NYT's plans, it seems they are monetizing their content, not their audience, and that's where the flaw is, for the long term.

ShanaC · 4 months ago

I dunno, I think in part the high fixed costs have to do with the fact that no one has decided to take a look at how to print a newspaper in years. Same with books. I can't think of a good reason why you can't go to a store and have a book printed for you "on demand," especially if it is one of those titles that is not going to be popular in a large amount of areas, such as Al Faribi in Arabic., in generic town, Minnesota.

Moving away from Broadsheet size into tabloid size and doing essentially tiny, computerized custom runs that are very high quality would be a total makeover, but might work. Also means that the newspaper itself, the actual sheets, will be customizable.- So if I hate getting the sports page, it doesn't have to be there. I'f pay for that in both digital and print.- except in digital, aggregate makes that sort of possible, but I wish newspapers would just know me already.

Jim Johnson · 4 months ago

There are three kinds of information people will pay for on the Internet:
* Information they can't get anywhere else, including in-depth analysis or commentary. I subscribe to a college football site for $10 per month because they cover recruiting in detail - information the local newspaper can't provide.
* Aggregation that is meaningful to me. I don't care about some types of news... let me craft my own version of your newspaper, and that will have value. Make sure, tho, I can include news and information from other sources, not just your reporters.
* No advertising. Yup - give me a clean, ad-free interface and I might pay a little $$ for it. (I already use Facebook and AdBlock Plus so I never see an ad even tho you count my page hit and unique visitor in your count for advertisers.)

im2b_dl · 4 months ago

I think your issue is intrusive advertising...(and no there is a way coming that will allow that not ALL effective advertising is intrusive) advertising should be organic and invisible. The story should be relevant to whatever advertising is organically and invisibly there...that a reader can choose to interact with something that is organic to the story...much more difficult though in journalism content... but I foresee a new position in content production that is interactive mappers...who are gatekeepers and agents for it. and their reputations will beased not on ad sales but on the ability to make all sides happy especially people like yourself in the audience. ...again imho

davehendricks · 4 months ago

Good post. Ultimately the most important thing is the audience, its reach etc. I wrote an article that is philosophically compatible with this in May: http://permissiontechnology.com/2009/05/14/you-...

Most people confuse 'news' with 'journalism' or content. That leads them to object to paying for the kind of information that is widely available and ephemeral. At the same time they are willing to pay for many other things that are also widely available, like television, for the privilege of watching them in higher quality, or in first run.

Newspapers opened the floodgates and now they are paying the price. They need to embrace the freemium model, but in order to do that they need to follow the FT.com or WSJ.com approach: much available for limited free use, and then charge for visit x, or for archives. And guess what? if you get something for free, in exchange you will accept a cookie or enter some registration information. In Depth Audience knowledge demands higher ad CPMs through better targeting.

Magazines and TV are next to deal with the freemium issue. Printed magazines and books will become luxury items, consumed on planes or at the beach. TV will be ala carte (ala Boxee) once the gated content model breaks that open.

In summary, someone needs to ultimately pay for the content that is produced. Content that costs nothing (in time and materials) to produce (like my comments on this blog) are inherently low value, for not being scarce. Content like the latest Flaming Lips album is relatively expensive to produce and I'll pay for a high bit rate version, but will happily listen free to crappy low bitrate/non-portable streaming. I would pay to see them live too, but they don't tour enough. So I'll settle for the lossless codec version of their material - and gladly pay, as their personal appearances are scare.

Get used to paying up people, in some form. As the well dries up, publishers are going to look to their new primary audience - online - to support them. It's not like online is the promotional vehicle for the traditional version anymore, it is THE version.

David Semeria · 4 months ago

Bingo! Stewart Brand said

Information Wants To Be Free. Information also wants to be expensive. ... That tension will not go away

It will go away when people realize that not everything on the net can be free forever. Somebody has got to pay the ferryman.

bsaitz · 4 months ago

what does this mean for facebook? it's the audience's content that's in play here..

K. Warman Kern · 4 months ago

Facebook fans will pay for the choice to retain rights of their personal content. They are figuring it out. Have you seen the notice going around about Facebook using your images in ads, implying you endorse the product or are somehow associated with it?

Also, have you heard that FAcebook sends nasty note and pulls down personal videos and audio including copyrighted content (e.g., daughter playing a Beatles song on the piano) . Would you be willing to pay a sub that included right to use an amount of licensed content on your page?

Shripriya · 4 months ago

Your comment here turned into a full post :)

fredwilson · 4 months ago

Happens all the time. Didqus offers reblog so that bloggers who comment can post it to their blog

Shripriya · 4 months ago

Yes, I'm now a full Disqus convert - it's on all my blogs. Their most
recent introduction of several features covered all the remaining
features I wanted in a comment system.

fredwilson · 4 months ago

Wow. Can you think of some more???

fredwilson · 4 months ago

Happens all the time. Didqus offers reblog so that bloggers who comment can post it to their blog

fredwilson · 4 months ago

Happens all the time. Didqus offers reblog so that bloggers who comment can post it to their blog

fredwilson · 4 months ago

Happens all the time. Didqus offers reblog so that bloggers who comment can post it to their blog

fredwilson · 4 months ago

Happens all the time. Didqus offers reblog so that bloggers who comment can post it to their blog

DorothyP · 4 months ago

Sell Comment Speed Passes--good for either 30 days or so many posts, which ever comes first. Or, like Salon, set up forums where only paid members can particpate (although Salon's are dull.) Sell the illusion of being in a private circle, inside the internet, where only the select few can chat with the cool kids. Nick Kristof will reply to paid up members, telling them the thrilling story of how he got that story.

tester · 4 months ago

I think more than anything else, media companies should start new companies and services under the umbrella of their own brand to then subsidize their journalistic operations.

Evan Rudowski · 4 months ago

Sorry Fred, I was referring to this part of your post:

> The worst examples of subscription services are those that break the content up into free and paid. It's as if some content is worth more than other content. I think that is the wrong idea most of the time, and especially in news and news related content.

I've followed your conversation about Freemium for a long time and generally agree. That's why I was a little surprised to see your comment above. Maybe I wasn't clear on the context.

fredwilson · 4 months ago

Probably a miscommunication

fredwilson · 4 months ago

Probably a miscommunication

fredwilson · 4 months ago

Probably a miscommunication

fredwilson · 4 months ago

Probably a miscommunication

fredwilson · 4 months ago

Probably a miscommunication

nkannan · 4 months ago

Fred,

Content such as news are perishable with no more than 24 hour shelf-life. They will be free and should be free due to their fungible nature. Fremium model will not work for news as the number of sources - TV, Cable, Internet - have proliferated.

Creative works like a movie, a musical composition, and fiction can potentially have decades of shelf-life. These will have a teaser chapter free with the rest as premium - like movie trailers. Freemium models work here.

NY Times offers two categories of content - perishable news with some in-depth analysis; editorial and Op-Ed pages; and fabulous book reviews. Perishable news content is fungible and offers no differentiation from competitors. There is a minority of readers who take the time to read and value the analysis, opinions, and reviews. Freemium can work but the paying audience will be small, which will cut their revenues.

There is no viable way NY Times and other print media can return to their glory days of revenues guaranteed by a loyal subscribers, mostly local, and a monopoly on access to local audiences for classifieds. Internet has subverted both - free news and Craig's List.

NY Times can make Freemium model work well by focusing on their core strengths that competitors can't touch - in-depth analysis; investigative reports; opinions and reviews. These have longer life than the daily news. Surely the audience will be small, but I for one, will pay for quality, just as I pay for New Yorker.

NY Times is designed for a "Freemium" audience and should be priced to reflect that value. They should give up on making money on reporting news.

Nat Kannan

fredwilson · 4 months ago

I think their experiment with times select proved that this is not the right way to go

As I said in the title of the post, I don't think you can monetize certain kinds of content nearly as well as you can monetize certain parts of your audience

nkannan · 4 months ago

Fred,

I tried their pay-for-op-ed pieces and thought they should have tried a single-payment annual subscription approach rather than trying $ for access to premium content piece-by-piece.

In any case, you may be quite right. Interesting times for print news media.

Nat

nkannan · 4 months ago

I just figured out a simple way to erase FT's cookies on my PC and access it over the limit they may set per month, unless they save cookies in their servers.

If there is a way to get around the FT's 9 views per month limit, the users would do that than pay.

fredwilson · 4 months ago

Some will. Some won't

fredwilson · 4 months ago

I think their experiment with times select proved that this is not the right way to go

As I said in the title of the post, I don't think you can monetize certain kinds of content nearly as well as you can monetize certain parts of your audience

fredwilson · 4 months ago

I think their experiment with times select proved that this is not the right way to go

As I said in the title of the post, I don't think you can monetize certain kinds of content nearly as well as you can monetize certain parts of your audience

fredwilson · 4 months ago

I think their experiment with times select proved that this is not the right way to go

As I said in the title of the post, I don't think you can monetize certain kinds of content nearly as well as you can monetize certain parts of your audience

fredwilson · 4 months ago

I think their experiment with times select proved that this is not the right way to go

As I said in the title of the post, I don't think you can monetize certain kinds of content nearly as well as you can monetize certain parts of your audience

alvisbrigis · 4 months ago

Love your FT example Fred. I think we'll see a lot of traditional media companies adopt it. It's a happy middle place. And you are dead-right that the quality, quantity, speed and relevancy of news will have to be high for companies to survive.

Ultimately though, I think a model will emerge where many of these companies figure out how to better tap the value of their readers and begin viewing them as prosumers that can contribute to their site and brand. Just imagine how many people would write for a NYTimes Farm system FOR FREE just to get recognition, develop reputation, drive traffic elsewhere and perhaps work up to being a top-tier journalist (etc). I reject the notion of Pro vs. Not-Pro - that dichotomy is archaic considering what can be done on the web.

This is something that we tried at Memebox (allowing bottom-up contributions that could get bumped up, but also producing paid-for top-down content in verticals) I saw it working and can see it scaling, especially for well-established brands.

Large-scale One-Way Content Models and, for the most part, are going to face big problems unless they represent the very best of the best. The competitors that can best manage Input-Sorting-Output content loops to more-or-less automatically drive additional value (in many forms) will have inherent competitive advantage.

Final note - it kills me that Wikipedia doesn't do more in this regard, create additional areas for people to deposit additional thoughts and content / comments / etc.

Andrew Korf · 4 months ago

Is there an opportunity in the revenge of the want ads? I would love to shop for listings of mid-century modern furniture on NYTimes.com rather than Craigslist or Ebay - where the listings are free on NYT but perhaps NYT charges a small fee for each sold item?

Fraser in Asia · 4 months ago

One difference between 'paid' online and 'paid' print may come down to the content in each.

A printed newspaper typically relies upon many articles secures from agencies or sources other than the newspaper itself. It is unlikely that anyone will pay for this online as it will likely be available elsewhere for free (and easy to be found via techmeme, google etc).

If I pass my 10 stories per month on the FT, I simply execute a search on the headline and regularly find the article for free elsewhere. The volume of proprietary content is generally surprisingly low. Even columns such as Jancis Robinson (wine writer) can be found for free on her personal website (though this model may be restricted for any but the most powerful writers).

As such, the online article that will be paid for will be something exclusive (ie only for a few seconds) or value added in some way (eg commentary or observations).

fredwilson · 4 months ago

I value the times for being the times. Its not the content object that I find valuable. Its their organization and brand and voice. By focusing on frequent visitors for subs, they can tap into people like me who feel that way

fredwilson · 4 months ago

I value the times for being the times. Its not the content object that I find valuable. Its their organization and brand and voice. By focusing on frequent visitors for subs, they can tap into people like me who feel that way

fredwilson · 4 months ago

I value the times for being the times. Its not the content object that I find valuable. Its their organization and brand and voice. By focusing on frequent visitors for subs, they can tap into people like me who feel that way

fredwilson · 4 months ago

I value the times for being the times. Its not the content object that I find valuable. Its their organization and brand and voice. By focusing on frequent visitors for subs, they can tap into people like me who feel that way

JonathanMarks · 4 months ago

I think this model will also work for the specialist press and publications who are looking for ways to generate revenue - involve the heavy users, perhaps giving them other benefits to save time (compilations, country reports) etc. There is a newspaper in the North of the Netherlands that encourages people to put a news ticker (with ads) on their own site. As long as the ticker is active, the audience member has a chance to win tickets to local events. Good way of building loyalty.

Venkat · 4 months ago

It's as if some content is worth more than other content. I think that is the wrong idea most of the time, and especially in news and news related content.

This throwaway line is probably the most important one in the post. You need to do it justice in a separate post. I'd like to hear the full version of this argument before I can decide whether or not to believe it. Prima facie, it seems to me that the inequality of content is a fact of life, but that you should be giving away the best stuff for free, and charging the minority for the less important stuff with zero marginal value to most, but high marginal value to some.

fredwilson · 4 months ago

I think it depends on what your objectives are. If you want to reach the largest audience, then you have to give a lot away for free. Even if its your best stuff

fredwilson · 4 months ago

I think it depends on what your objectives are. If you want to reach the largest audience, then you have to give a lot away for free. Even if its your best stuff

fredwilson · 4 months ago

I think it depends on what your objectives are. If you want to reach the largest audience, then you have to give a lot away for free. Even if its your best stuff

fredwilson · 4 months ago

I think it depends on what your objectives are. If you want to reach the largest audience, then you have to give a lot away for free. Even if its your best stuff

Phanio · 4 months ago

I forwarded your post to a friend of mine who works with a agency in Dallas doing just this - trying to monitize their content. He replied about how the WSJ uses a forward-for-free idea. Now, I do not really understand this but I think it goes something like this. You subscribe to the WSJ. You see an article or story you like and forward it to a friend or group. This costs nothing. The friend or group then (if they click on the link) gets sent to the WSJ's website to view the article (again, for free). Which 1) drives traffic to the WSJ's site and 2) gives the WSJ an opportunities to market or sell to this new traffic.

fredwilson · 4 months ago

Its a step in the right direction but I like the FT's model better

fredwilson · 4 months ago

Its a step in the right direction but I like the FT's model better

fredwilson · 4 months ago

Its a step in the right direction but I like the FT's model better

fredwilson · 4 months ago

Its a step in the right direction but I like the FT's model better

zionaetzion · 4 months ago

At Truemanity we work with members who incorporate a membership model.

We want to encourge those that take leadership to have a stake in what they do. We enspouse collaboration, responsility and sharing...it is not all about money.

Our aim is to have member generated content that is unique, actionable, high quality and from within our membership.
We are a community with area of interest that is empowerment and also as a community supporting others that need.

We realized that social media as a freebie had run its course and it needed to be monetized as a conscious business.

We had long and loud debates about the type of business model that would be most appropriate. It caused a lot of discomfort between the founders to get to a true and worthy model.

We have to see if the model fits within a code of ethics that use.

Paying for membership in a community. That's why we call them membership websites and not content websites.

I agree with Evan Rudowski that the debate around free versus paid is oversimplified and a waste of time. Any website ought to have multiple revenue streams in order to maximize its potential. I pray that our site with unique content targeted at a motivated community will be able to take advantage of multiple opportunities.

Yes it is what one is offering.


Zee

davidshore · 4 months ago

The Print media sector can look to the music industry's move toward new ways to monetize their content. Mike Masnick of techdirt.com wrote this post http://bit.ly/14oVAE about Trent Reznor's various experiments and translated that to a simple equation: Connect with Fans (CwF) + Reason to Buy (RtB) = The Business Model. He goes on to give some creative examples in this post http://www.techdirt.com/rtb.php. More an more musicians - indies and major artists - are innovating wth models like this.

Perhaps print should call it Connect with Readers (CwR) + Reason to Subscribe (RtS) = The Business Model

fredwilson · 4 months ago

Yeah. Mike's a smart guy. And he takes his own advice

Jason Preston · 4 months ago

I know I'm a little late to this blog post, but I have to add that I love the FT.com model, and I've been calling it "metered content," and promoting the idea on Eat Sleep Publish for some time.

I think that I've made my best argument for it in this response-to-TIME post called How To Really Save Your Newspaper: http://eatsleeppublish.com/how-to-really-save-y...

The upshot is that adopting a metered content model allows you to have your cake and eat it, too; you can control the distribution of your content, monetize both your audience and your content, all without stifling the discussion that arises naturally around news. Genius.

fredwilson · 4 months ago

Cool. I'll check out your post

Mike O'Horo · 4 months ago

I am not a media maven, nor online content maven. I've only been studying this space for a couple of months. Conspicuously absent from this discussion, it seems to me, is an acknowledgment that most proposed subscription rates are rather modest amounts, with the NYT having historically earned its place at the top of the pricing heap. The motivation behind people visibly whining about a few bucks to read what they value seems akin to the famous answer to the question of why dogs lick their privates: "Because they can." Just because people don't want to pay for something doesn't mean they won't have to. We may not want to pay Whole Foods' prices for organic food, but if we value not being poisoned by agri-pesticides, we will.

As many previous posters have pointed out, those who value your content, whether you're the NYT or the Prairie Weekly, will pay for it. If they don't value it enough to pay for it, you have a product-desirability (or positioning) problem no different than that of unsalable cars or clothing.

One content model that has been successful for many years is the Harvard Business Review. They publish in-depth analysis of significant business issues, with a lot of it free stuff on their site. Yet many people willingly buy a subscription to retain access to the HBR archive. After all, while I may enjoy reading it, I don't necessarily have an important use for all their brilliant content TODAY. They sell PDFs of the articles at a piece rate that ranges from $3 to $5. When I'm dealing with that problem or challenge, and my Google results reveal that HBR has weighed in meaningfully on the topic, I want their info. What's a few bucks at the time? The Internet has changed distribution, but not economics: It's still all about degree of demand, which always translates into pricing power. Some products/services/business have it; most don't.

Most of the definitions of "timely" have referred to "immediacy" in the sense of "fresh, current, just happened." I submit that a much higher value attaches to "EXACTLY WHEN I NEED IT MOST." I'll argue that HBR's track record suggests that I'm not alone.

judyshapiro · 4 months ago

Look at the success stories -- not the sad failures. All Things D had an article about Paltalk because we are a profitable and successful community that does monetizes its audience. In fact, we just bought out our VC, Softbank, at a premium. This can and does work :)

http://mediamemo.allthingsd.com/20090715/happy-...

pasta2u · 4 months ago

Incidentally, "free" content is not unique to the internet. There are plenty of printed Newspapers distributed free (door to door local rag, on public transport, at the local supermarket, etc.) Some of these make good money, others achieve their own marketing objectives (eg customer loyalty to the supermarket) while not generating any direct revenue.

Artemi Krymski · 4 months ago

let's get back to basics: news companies create articles. each article has a price that's a function of supply and demand. of course no two articles are identical. but in today's world many are effectively the same to the consumer (hence the low price). the supply of an article is a function of:
- number of writers out there on the topic
- how niche is the topic
- how in-depth is the analysis
- how hard it is to acquire the news on that topic
- how old is the article (breaking news is worth more, historical archives may also be worth more)
- etc

so each article has a VERY different price. FT exclusive breaking news may be worth a lot of money to bankers. What Paris Hilton did last night probably isn't worth much.

every piece of news is in a marketplace of it's own. companies used to package those pieces into a "newspaper" like record labels packaged songs and hits onto CDs, because they know a newspaper probably has just one worthy article that a consumer would pay for. just like a CD has just one hit.

so I don't see why content can't be sold. it's just that every article should cost a different amount. the real cheap articles can be ad-supported and syndicated in return for ad-rev-share. the expensive ones, such as breaking news or niche analysis, etc, would cost more. also note that the value of an article changes over time. time is a big factor in news after all.

so why can't news companies just write articles and sell them, like any other business? sell them to sites that can build communities around them (better commenting systems, social networks, etc). sell them to sites that can target advertising better than them (google, etc). the market forces should establish which articles people will pay for and how much, which they should bother writing, and what they can afford to spend on writing them.

and if your business is less efficient than that of a blogger (ie it costs you more to put an equivalent article together) then you shouldn't be in that business - that's the reality. there should be economies of scale, not the other way round...

fredwilson · 4 months ago

Transactional overhead is too high

Jef Nance · 4 months ago

Hey, Fred, great post... Your thoughts on pay blogs? Has this been done/tried? What would be the model that might work? Anybody?

-jef

fredwilson · 4 months ago

I've not seen it done

Alex Salkever · 4 months ago

I totally agree with this post and think this is probably the best future for publishing.