Point, Click, Pay?

(AP)
Just as the graveyards are full of indispensable men, so is the Information Superhighway strewn with financial model roadkill.

It's 2007 and almost nobody has devised a sustainable way of making money on content online. Heck, I spent a semester worth of grad school ten years ago – writing a hundred pages – looking into Internet financial models and could only end up with a heavily-footnoted shrug.* That was back in the days when Slate.com was still attempting to charge $19.95 for a yearly subscription. (They were saved by Microsoft in 1999.)

The problem, of course, is that you can find (almost) anything out on the web for free. So there's absolutely no incentive to pay. Back in November 2005, the New York Times decided that they had figured out a way around this problem – a hybrid experiment where they would offer their news content for free, but charge for the unique commentary of Tom Friedman, Frank Rich, Maureen Dowd, et al. So they began "TimesSelect" and began charging non-subscribers $49.95 to access the opinion page online.

It doesn't seem to be working out. As Mickey Kaus writes at, ahem, Slate:

Will TimesSelect Go Jane?Is the infamous NYT TimesSelect paywall about to disappear? [I] hear rumblings that the paper is about to abandon the whole misconceived project in which it has blocked unpaid Web access to its op-ed columnists. ... P.S.: The Times claims fewer than 225,000 customers pay the $49.95 TimesSelect fee, up less than 100,000 from what the paper was claiming in November, 2005. More get the service through their regular subscriptions. Meanwhile, the Times could use the ad revenue that would come from increasing the readership of the columnists (by making them free). And the columnists would like to have the readers. ... All this was quite evident two years ago when Pinch Sulzberger embarked on this folly, of course. ....

Update: Denials don't get much weaker than NYT spokesperson Catherine Mathis' to the NY Post's Keith Kelly:

"While TimesSelect is very popular and we have certainly met and exceeded our goals since it began in 2005, we continue to evaluate the best approach to our business."

So the grand experiment of online content continues. It's obvious we're all way over that initial Internet e-commerce infatuation (still miss you and your candy bar deliveries, Kozmo.com), but it's a cautionary tale worth filing away in our mental attics when the newspaper of record can't persuade its readers that marquee names are a unique selling proposition.

The questions linger, then: Is there a financial model that could work for an online news site? Would it have to be a multimedia product? Would it be content only available to web subscribers? Or has the Internet merely created a new reality where information simply can't be charged for? Just as nature abhors a vacuum, does the online world resist a price tag?

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  • The obvious exception – let's call it the rule-proving exception is the Wall Street Journal, which charged a subscriber fee years ago and has stuck to it. But there's another grad school thesis or Harvard Business Review piece in the offing for you if you'd like to detail how the Wall Street Journal is not a typical news source and doesn't have a typical readership.