It's been a simple news industry precept: two legs are better than one. Reader support and advertiser support. Balance. So the New York Times' decision to eliminate Times Select tonight at midnight leaves its emerging online business in a more precarious state -- in that one-legged balancing position that any yoga newbie knows is a tough position to maintain.
But it's a balancing act that news publishers everywhere are reluctantly accepting -- it's an ad, ad, ad world -- and the notion of mere readers paying for news is now obsolescent.
I've got little doubt that the Times can recoup the $10 million it has been earning annually from Times Select, as it multiplies page view and as increasingly targeted advertising directed at high-demo readers kicks in. But this decision means several things to the future of the Times -- and the daily news industry, which is watching carefully from the sidelines.
The obvious one is the complete reliance on advertising as the only substantial future revenue driver. Not only is the Times giving up on the idea of subscriber revenue. It is placing in jeopardy other millions of dollars it now takes in on licensing of its archives for use by such companies as Lexis Nexis and Factiva. As part of its Times Select termination, it is making its recent (post-1986) archives free to the public. Those archives -- behind firewalls -- generate streams of revenue to the Times. And look for licensors to be paying the Times lots less in financial guarantees going forward, as availability on the free web raises questions of value.
The near-total reliance on ad revenue means redoubling and re-tripling efforts to get the online ad business right, maximizing traffic and yields. Sure, these efforts have been underway for years now, but many news companies continue to underperform web companies in sheer execution.
The stealth problem created I believe though is around print subscriptions and print circulation revenue. Of those 787,000 Times Select customers, almost a half million -- 471,000 -- are print subscribers who've gotten TS for "free." That's a retention strategy, and one that goes by the board as print subscribers look around and say, "I don't need to be a subscriber to get archives and Frank Rich." I can't believe how many people -- well-schooled, well-heeled, appreciative of journalism types -- tell me that they've dropped their print NYT sub, just relying on the web. There's sometimes a twinge of guilt, but it passes quickly.
Sure, Times Select may not have been the best retention strategy, but retention of a half-million Times subscribers just got a bit harder
There's an inevitability here, well-cheered on the web, and now that it's done, best to make the best of it.
Yes, it will be good for the Times and the country to have its best voices a full part of the national and global conversation as we head into an election. Yes, it will be good for the Times to remove its cloud of uncertainty (some things free, some paid -- columnists, Times Tracker, Times File), approaching the competitive reader marketplace cleanly. And, finally, yes, it will be good for the Times to get all this done pre-Novermber, when Rupert takes over the Journal and begins making his own "free" moves.
More on Times Select and the New York Times overall, here.