New York Times’ (NYT) online model…sigh
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The New York Times, the newspaper deemed by many to have the top journalists in the world has been going down for months and months and even its uncertain future has not made it able to get its online model right. To be certain, the Times (NYT) is in a struggling industry and with so many of the competitors going bankrupt or looking for a solution before going chapter 11. But the New York Times is the premiere brand and I would think that they would be getting their web strategy right. There is no doubt that a winning internet strategy is crucial for the survivorship of a media company nowadays.
NYT has gone on and off about the possibility of charging for content and there is still no clear answer about charging or not. To see Bloomberg report that it is now considering once more going towards a pay-for-content model is worrying. The question in itself is not crazy but the fact that NYT keeps changing its mind over and over.
The pros and cons are obvious:
Pros:
- Obviously additional revenues if it is successful
- Visitors see the NYT content as “premium”
Cons:
- Less traffic as content cannot be indexed by search engines
- Very limited advertising revenues
The current model of the New York Times seems to be the best in my opinion, give most content out as free access but by getting information about the users, they can get better targeting and in theory better rates on their ads. The problem of course is that every time the conversation comes up about newspapers content, the story of the Wall Street Journal comes up. The WSJ has had a successful model for years as it charges for content.
Of course, there are comparables as both are leaders in their respective fields with the New York Times being perhaps the world leader in general journalism and the Wall Street Journal being the premiere Investment and Economy newspaper. Unfortunately, the comparison pretty much ends there. The Wall Street Journal’s huge advantage of course is the fact that it is seen by fund managers all around the world as a tool for work. Therefore, the subscription is usually paid out by their employers. The New York times does not have that luxury so they would need the “regular” population to shed out the subscription fee and while it is possible to accomplish, the model is far from proven and one that I think they should stay away from for now.
What the New York Times must look into is getting more creative in the advertisement strategy of its website. Right now, they are surely represented by a media company that pays them a fixed amount per page view. They could get higher rates if they worked out deals for subscriptions or specific targeted ads which would not by themselves save the newspaper. But for now, probably the best to hope for is for the NYT to get back into positive grounds and find something that works and build on it. Switching strategies every 6 months will simply not get it done. Until I do see a clear strategy, I would tend towards shorting the stock.