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NYT's Nisenholtz: Paid Content Would Be 'Incremental Revenue'

This story was written by Staci D. Kramer.
It's Martin Nisenholtz's turn answering questions for the NYTimes.com feature "Talk to The Times" and the SVP of digital operations for The New York Times Company (NYSE: NYT) has already scaled the pay wall and the company clearly isn't done with the notion of pay to read. But Nisenholtz isn't talking about the kind of premium proposed by NYT columnist David Carr todayall pay all the time. Carr's argument: "Setting the price point at free the newspaper analyst Alan D. Mutter called it the 'original sin' has brought the industry millions of eyeballs and a return that doesn't cover the coffee budget of some newsrooms."

Instead, Nisenholtz is sticking with incremental as in additional revenue, not replacement. The paper dropped TimesSelect, which he says had some 200,000 subscribers and around $10 million in annual revenue, "after careful analysis suggested that the ad revenues resulting from increased traffic from offering this content free through the exploding search and blogs sectors would exceed $10 million over time." Now, the company is trying to find a balance between paid content (Nisenholtz lists subscriptions, micro-payments, membership tiers) and what Nisenholtz calls "a very large national display revenue stream" that separates NYTimes.com from "many local news Web sites that still depend mostly on declining classified ad revenues." The full answer after the jump.

David N. of Minneapolis asks: "Do you see online newspaper and magazine content becoming pay-per-view (or pay-per-month, etc.) in the future? With newspaper and media revenues declining, we hear that idea thrown out every once in a while as a way to stabilize the industry. What are your thoughts?"

Nisenholtz: "The short answer to your question is 'yes.' We've experimented with many different versions of online payment over the years. For example, when we started the Web site in early 1996 we charged for international usage. Our thinking was that Times content was unavailable outside the United States, hence, users would be more likely to pay for the online version. After about 18 months we had generated under 4,000 subscriptions, so we ended the experiment in July 1997.

Our most ambitious effort in paid content was TimesSelect, where we charged for access to Times columnists, arguably our most exclusive content (since, for example, Tom Friedman is only available from The Times.) This was much more successful, generating more than 200,000 subscriptions and around $10 million in annual revenue. However, we decided to end TimesSelect after careful analysis suggested that the ad revenues resulting from increased traffic from offering this content free through the exploding search and blogs sectors would exceed $10 million over time.

Today, we continue to carefully analyze the question of how paid content (subscriptions, micro-payments, membership tiers) can augment our core advertising business. The trick, of course, is to garner incremental revenue from the user without significantly cannibalizing the high rate ad pages that now account for a very significant amount of money. Unlike many local news Web sites that still depend mostly on declining classified ad revenues, NYTimes.com has a very large national display revenue stream. As we develop new pay-for-content ideas, we must carefully balance our bility to generate meaningful dollars from both sources. "

Photo Credit: NYTimes.com


By Staci D. Kramer