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June 03 2011

21:10

The NYT rewards its paying users with subscriber-only content

Subscribers to The New York Times got a surprise in their inboxes this afternoon: a story-behind-the-story about the paper’s coverage of the death of Osama bin Laden, penned by the weekend editor who’d been helming the paper’s news coverage when it was announced that the terrorist leader had been killed by American commandos.

The story is the first, the email notes, in an ongoing series of occasional newsletters — created for subscribers, and for subscribers alone, as, ostensibly, a “thank you” for their subscriptions. As the Times puts it (we’ll save you the ALL CAPS):

This Story Behind Behind the Story e-mail newsletter from The New York Times newsroom has been prepared exclusively for Times subscribers and is the first of an ongoing series you’ll receive as part of your subscription.

The Times’ pay models, both of them, have been based on the walling-off (or metering-off, as it were) of existing content; this seems to be a case of the Times creating new content only for its subscribers. And it’s meta-content: a story about how the Times reported a story.

I’ve reached out to the Times to learn more about the mechanics of the newsletter, which seems to be dribbling out to (at least) print subscribers this afternoon. (Some of my questions: Is it being delivered to digital Times subscribers too? How often will the newsletters be sent out? Will the stories contained in the letter — the Osama backgrounder looks oddly formatted for the page and PDF-like — live anywhere on the web or in print, or are they email-only? Will there someday be ads against the newsletters?)

I’ll update this when I hear back. Meantime, though, it’s worth noting that the newsletter is launching against the backdrop of a Times digital subscription model that is still, in the scheme of things, nascent. The pitch the paper has been making since March, after all, has been something along the lines of “we’re worth paying for.” Subscriber-only content, however, suggests an addendum to that: “We’ll make the paying-for worthwhile.” It rewards subscription, obviously — but, in that, it also suggests that subscribers are, somehow, insiders. News organizations often default to that “behind the scenes” approach when considering how to reward devoted readers: Intimacy, after all, can be a good complement to loyalty.

It’s also worth noting why the Times can reward its subscribers via email. One advantage of the paper’s paid-content model — besides, you know, getting your readers to pay for the content they consume — is how it incentivizes subscribers to connect their digital and print accounts. (Print subcriptions get digital access, but only if they connect the two.) The Times can reach its subscribers (and reward them, then, however it sees fit) in some part because the paper has their digital information in the first place. Times Co. CEO Janet Robinson noted last month that 728,000 print subscribers had connected newsprint to website. Users have given the Times their data; the Times has used those data, in turn, to thank them.

In that, the newsletter seems to be a step toward the Times converting its subscriber base into something that looks more like a community. The Times itself has, in the past, considered “membership” as the proper metaphor for a paid-content strategy — remember those rumors of Gold and Silver offerings? While it ultimately opted for a subscription-driven approach rather than a membership-driven one, the special-for-subscribers content tips a hat to the core ideas of media membership. It’s a like a tote bag in story form.

And that’s significant. The conventional wisdom, after all, tends to be that creating community around news content is the first step toward monetizing that content. The Times’ pay meter has so far bucked that assumption, making its pitch mostly about the paper’s value to consumers on an individual level. Today’s inaugural newsletter suggests, though, that the paper is still actively exploring the more communal aspects of paid content — in this case, bolstering its brand by rewarding the people who prove willing to pay to keep it around.

October 21 2010

14:00

The Newsonomics of the ad recovery

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

Reading the news about the news business, you may have missed this: advertising is booming, again. Well, booming may be too strong a word, but overall, it’s growing. Unfortunately, the news about the news ad business is still negative. Not as negative as the negativity of last year — down 27 percent for 2009 — but still down in single digits over 2009. Being less negative than last year is good, it’s better, but my math doesn’t add that up to a positive.

So what we have here is a trend that’s held true from boom to bust through tepid recovery: newspaper companies’ continue to be the laggards, losing market share in ad revenue, by the week, month, and year.

This week’s reports from The New York Times Co., Media General, and McClatchy, and last week’s from Gannett, all point to the same numbers with a minus sign in front of them. Let’s look at the numbers, and the newsonomics of the ad recovery.

Overall ad spending is up 2.5 to 4 percent through the first nine months of the year, and forecasts call for it to come in at that rate for the full year.

Let’s pick that apart.

Local TV advertising is up 13 percent in 2010, according to BIA/Kelsey. National broadcasting is putting up double-digit numbers. Cable advertising is growing in single digits. Radio’s up about 6 percent.

Even magazine advertising, subject to similar doldrums as newspapers, was up 5.3 percentin the third quarter, its second consecutive quarter of positive growth.

Digital advertising picked up its pace rapidly at the beginning of 2010: up 11.3 percent over the first half of the year to $12.1 billion, according to the Interactive Advertising Bureau. This digital growth is a long-term trend — online advertising is now a close No. 3 among advertising media in the U.S. (behind TV and newspapers). It’s surpassed TV, to become No. 2 in the UK, and surpassed newspapers to become No. 2 in Japan. (See The Newsonomics of online ad trending.)

As an aside, consider how much faster Google is growing than the online ad market, from which it derives almost all its revenue. In the third quarter, Google reported revenues of $7.29 billion — a 23-percent year-over-year increase.)

Now back to newspaper advertising. Gannett’s publishing revenues dropped 4.8 percent in the third quarter, while the The New York Times Co. was down 2.7 percent. McClatchy saw a 5.7-percent decline. Media General had even more problems: down 7.6 percent in pub revenues. Gannett’s and Media General’s revenues, overall, were helped by owning broadcast properties, as Media General’s 18.4-percent increase in broadcast helped it report an overall increase in year-over-year revenues. Broadcast revenues at Gannett were up 22.3 percent.

Why the great disparity between newspaper — meaning print newspaper — and the rest of the recovering ad world? We won’t take the space to parse it here and now. Suffice it to say that the long-term declines in classified categories — auto, real estate, and recruitment — have hurt the industry greatly. Now, though, even retail advertising is “coming back” quite unevenly, the bumpy road to recovery New York Times CEO Janet Robinson highlighted in her third-quarter report remarks.

The possible silver lining of the newspaper reports: Some digital revenue reports were on a par or better than the growth of online advertising overall. That hasn’t been the case consistently over the past couple of years, so the the latest numbers offer a ray of hope for the future.

If online advertising grew 11.3 percent overall, then compare that to the 3Q growth rates (not quite apples to apples, but not far off) at the New York Times Company (15 percent), Gannett (10 percent), MediaGeneral (15-22 percent, depending on how you count it) and McClatchy (1 percent). Those numbers indicate that some of those newspaper companies are doing a better job of selling digital advertising.

My talks with publishers and online directors point to several reasons for that good performance, ones long in discussion, but now becoming more routinely operational. The No. 1 reason: Publishers have simply focused more resources on selling digital products. They are also increasingly un-bundling products, not forcing as many print/digital buys. And, of course, they’re putting themselves in position to get spending in the fastest growing ad category — online — and devoting fewer resources to mining print revenues, which are declining in general.

So here’s the rub, and the conundrum. Newspaper companies are now pedaling as fast as they can, trying to get as digital as they as fast as they can, because that’s what the growth in ad dollars is happening. The New York Times Company says that 27 percent of its ad revenue is now driven by digital, and that’s up three points year over year. So it has a quarter of its ad business in the new world, and three-quarters in the old world. Add it up, and you get those negative numbers overall. The trick of the next several years: pedal (and peddle) even faster on the digital bike, while stoking the steady, if slowing train of print — and pray that the train doesn’t run out of coal too quickly.

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