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The Real Problem with

2010 January 21

The New York Times announced that they will indeed switch to a metered model in 2011.  This is an incredibly bad idea.

Let’s call this move what it really is: the subsidize paper – charge online model. Most newspapers lose money on print and distribution, why do they expect to charge on the web where marginal costs are zero and low barriers to entry make competition incredibly voracious?

Most of all going to a metered model will distract them from the real task at hand:  learning how to run an online business.

On Tuesday, I explained how the New York Times can fix their business.  Today, I’ll go into more depth about why they are having problems in the first place.

An Appalling Lack of Understanding

To understand just how misguided this idea is, you simply need to look at some of the statements about the move in this Washington Post article. (I’ve already started to ration my use).

For instance, Rob Grimshaw, managing director of says that at current online ad rates, “You need 4 billion page views per month in order to make $50 million in revenue per year,”

That works out to about $1 per thousand views (CPT), valuing newspaper inventory the same as social media inventory.  In actuality, branded content earns 10-20 times that much and home page inventory can be worth up to $100 CPT.  Even taking into account low utilization rates, he’s far off the mark.

Diane McNulty of the New York Times says that they are making the move because they want additional revenue streams.  Yeah, I’m sure they do, but they already tried charging for content and it was a disaster.  They dropped the ill fated TimesSelect scheme in 2007.

A Profitable Business Starts with Good Management

The real problem is that newspapers don’t manage their online business very well.  In the case of the, their flawed process becomes immediately apparent by simply looking at their web site.

A great web site isn’t about content or technology; it’s about integrating vital business functions. Unfortunately, many companies fail to recognize this simple fact and the is a great example of what not to do.

Here are some examples:

Reference Search: The New York Times site has the most amazing feature that you’ve never heard of.  If you highlight virtually any word or phrase on the site, you can get reference information on that word or phrase, whether it is a dictionary definition of a word you don’t know or biographical information about a public figure.

It’s an amazing feature that is hardly ever used. I know it’s there and don’t use it either.  It just never occurs to me while I’m reading an article.  Meanwhile, they eschew the common practice of putting related articles in the right column in favor of hyperlinking some terms (seemingly at random) to an article search rather than reference information.

None of this works very well and I can’t believe the problems couldn’t be solved through some relatively inexpensive usability research.  With all the time and trouble they’ve gone to creating sophisticated features they seem to have forgotten about how users can actually benefit.

Social Network Component: I was very happy to see that integrated a social component into their site.  As I’ve written before, I believe that integrating social networks and branded content is the way of the future.

I was on the site one day and was prompted to join (I forget how).  As a registered user, it was easy for me to sign up and they suggested people for me to follow.  After a couple of easy clicks I was up and running and soon had some people following me as well.

Now what?

I have no idea what value I’m supposed to get out of the social network or what value I’m supposed to give to the people who follow me.  There is a little status bar at the top of my screen with a recommended article, but I never look at it.  Should I feel guilty or just find great content when I come across it on an aggregator?

Static Home Page: Whenever I go to in the morning, I’m almost guaranteed to find an interesting story on the home page.  If I return an hour later, I can be just a sure that I will find the same story, which isn’t very interesting the second time around.

News stories, no matter how informative or well written, are time sensitive.  Users should be able to expect to see new stories when they return to the site for an update (especially if the user has already clicked).

This is a very basic problem that other sites have solved in a variety of ways.  I’m aghast that hasn’t caught on.  As a newspaper, they put out hundreds of stories per day and should certainly have enough content to keep their home page exciting (and increase their incredibly valuable home page inventory).

(Here’s a tip: Why not integrate socially generated content onto a home page block instead of hiding it on internal pages?).

The Way Forward does all the hard things right.  Their journalists, commentators and technology are all world class.  They have wonderful multimedia features and even a Nobel prizewinning economist who blogs for them (although, I never know when Krugman has posted unless I see it aggregated somewhere else).

Whenever there is a big story, I can always expect the NY Times coverage to be tops.  The problem is that really big stories are rare, that’s why they are so big.  The key to a profitable site is how much value users get everyday.

Where they fall down is the simple stuff.  It doesn’t matter what they have on the site if I can’t find it, and I have no interest in becoming an expert on  If they won’t put the information in front of me I’ll find it somewhere else.  The machine has to be made to work with the man or the man will click away.

Fixing these problems won’t require enormous investment or technical sophistication.  What it will take is a fundamental change in the way the company works.  Turf battles must give way to an effectively integrated process in which editorial, usability and revenue tasks are accomplished in unison.

Chinese walls must give way to multifunctional teams on the implementational level.  By the time the debate hits the boardroom, it’s stale and meaningless.

A metered paywall will just create rationing and exacerbate the revenue problem.  If the is to become profitable, they will need to learn how to manage it effectively.

3 Responses leave one →
  1. January 22, 2010

    I found that word-definition feature by accident, but I almost never use it. I like to think that it will become ubiquitous and people will actually use it. It’s great to see it on the NYT site, but it’s too bad they will not leverage it.

  2. thaiparampil paul joseph permalink
    January 22, 2010

    by 2020 newyork times and fox empire will collapse…indians will buy these two groups…

  3. January 22, 2010


    It is a shame. They really do have so many great things on their site, but many of those things are wasted.

    It’s an integration problem that permeates their business. Editorial, user interface and business side need to work together much more effectively.

    – Greg

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