Bad Economics, Part II
May. 19th, 2005 07:29 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
libertangoYou may recall Dave Winer's post where he said:
"(I)t's bad economics to spoil a good thing for a couple of incremental bucks today, for zero total bucks later."
Well, even though he wrote that on May 5th, apparently the New York Times didn't read it. Because, according to this press release:
"NEW YORK--(BUSINESS WIRE)--May 16, 2005--The New York Times announced today a new online offering called TimesSelect, which for a modest fee will provide exclusive access to Op-Ed and news columnists on NYTimes.com, easy and in-depth access to The Times's online archives, early access to select articles on the site, as well as other exciting features."
"While most of the news, features and multi-media on NYTimes.com will remain free and available to users, the work of Op-Ed columnists and some of the best known voices from the news side of The Times and The International Herald Tribune (IHT) will be available only to TimesSelect subscribers beginning in September. Home-delivery subscribers will automatically receive TimesSelect as part of their benefits. TimesSelect will be priced at $49.95 for an annual subscription."
This is a colossally stupid business move, and it appears the Times knows it. Because I can't figure out why they wouldn't go and implement it today if they had any confidence at all. Running it as a trial balloon until September shows how uncertain they are.
Slate tried this, lost money on it, and went back to free access with their tail between their legs. The Wall Street Journal tried it, although the other way around -- their corporate info and financial stuff is for pay, while their opinion section is free.
Perhaps that's because the Journal realizes, in the age of bloggers, the following uncomfortable truth: The quality of commentary in the Journal or the Times -- or any other paper -- is only marginally better than that in the blogosphere. People simply won't pay for this variety of content.
So, what will the end result for the Times be? Marginally more bucks from a devoted few, while the vast bulk of their readers stop visiting them. Which doesn't just cut their revenue stream from subscriptions, but will cut their current banner ad revenues. It will also make their Op-Ed writers less relevant, by taking away some of the bully-ness of their pulpit.
Fewer readers, less revenues, less prestige. Not often one sees a trifecta like that.
Update: Matt Haughey agrees, and adds in something I hadn't known about: Dave has a bet running with the Times (to be settled in 2007) as to whom will be more authoritative: traditional journalism or weblogs. Quoth the Howie: "...Dave Winer just totally sealed the win on his bet."
Up-Up-Date: Dave Winer has again been kind enough to point to me. Thank you very much, Dave. For those of you reading me for the first time, welcome.
"(I)t's bad economics to spoil a good thing for a couple of incremental bucks today, for zero total bucks later."
Well, even though he wrote that on May 5th, apparently the New York Times didn't read it. Because, according to this press release:
"NEW YORK--(BUSINESS WIRE)--May 16, 2005--The New York Times announced today a new online offering called TimesSelect, which for a modest fee will provide exclusive access to Op-Ed and news columnists on NYTimes.com, easy and in-depth access to The Times's online archives, early access to select articles on the site, as well as other exciting features."
"While most of the news, features and multi-media on NYTimes.com will remain free and available to users, the work of Op-Ed columnists and some of the best known voices from the news side of The Times and The International Herald Tribune (IHT) will be available only to TimesSelect subscribers beginning in September. Home-delivery subscribers will automatically receive TimesSelect as part of their benefits. TimesSelect will be priced at $49.95 for an annual subscription."
This is a colossally stupid business move, and it appears the Times knows it. Because I can't figure out why they wouldn't go and implement it today if they had any confidence at all. Running it as a trial balloon until September shows how uncertain they are.
Slate tried this, lost money on it, and went back to free access with their tail between their legs. The Wall Street Journal tried it, although the other way around -- their corporate info and financial stuff is for pay, while their opinion section is free.
Perhaps that's because the Journal realizes, in the age of bloggers, the following uncomfortable truth: The quality of commentary in the Journal or the Times -- or any other paper -- is only marginally better than that in the blogosphere. People simply won't pay for this variety of content.
So, what will the end result for the Times be? Marginally more bucks from a devoted few, while the vast bulk of their readers stop visiting them. Which doesn't just cut their revenue stream from subscriptions, but will cut their current banner ad revenues. It will also make their Op-Ed writers less relevant, by taking away some of the bully-ness of their pulpit.
Fewer readers, less revenues, less prestige. Not often one sees a trifecta like that.
Update: Matt Haughey agrees, and adds in something I hadn't known about: Dave has a bet running with the Times (to be settled in 2007) as to whom will be more authoritative: traditional journalism or weblogs. Quoth the Howie: "...Dave Winer just totally sealed the win on his bet."
Up-Up-Date: Dave Winer has again been kind enough to point to me. Thank you very much, Dave. For those of you reading me for the first time, welcome.
