NYT’s future model? We suggest it’s not personalization.


Jason Moriber has been writing insightfully about what might save The New York Times, including personalization. We debated this on his blog and are replaying it for your amusement.

Jason:

Beyond the ongoing debate over what will eventually happen to newspapers I feel there needs to be some quick pragmatic thinking on what can be done “now.” The quickest changes can be made to print-media’s online sites.

Show me the static content for free. I’ll pay you for the active content … Offer me something you can’t get anywhere else but online – my behavior and my preferences. Don’t sell my data to marketers, sell it to me! Mix the available content and data with my behavior, let me set a few preferences, and you have a paid model.

Me:

Very interesting ideas. I debate, though, whether personalization is enough to build a subscription base or loyalty. The idea of 1to1 marketing has been around since Don Peppers in 1991 and never seems to make it as a real business model; Netflix and Amazon try and still fall far short.

The problem is the switching costs to find relevant information are now so low, that as soon as NYT charges – I’ll fly somewhere else, where the same quality content can be had for free.

What I might pay for though is access to the minds of the people writing the stories. Imagine spending $20 a month to be able to converse with the top technology writers at NYT, or perhaps a club of similar top readers interested in the topic. But even that is a tough sell given the ease of setting up other social networks.

The truth is that the content we all love so dear has become a commodity. There is only so much demand; the supply has become almost infinite; as the quantity of supply moves farther and farther to the right on a classic supply-and-demand curve, the price of the good (content) must fall. I suggest that there have always been millions of brilliant minds in the human population out of the billions on the planet; journalism in the past limited our access to these minds, so we perceived that NYT and other top papers had the “few” people needed worth spending to see. But now that I can find you, or anyone else I deem smart or wise or reporting real news that I find useful, I can flow to this huge real supply of intelligence. The profits disappear as the friction between content supply and demand are gone.

As far as the solution? The only one I can see is for the current knowledge empires like NYT to become nonprofits, lock in their brand, and admit that advertising or subscription revenues will no longer be enough for them to survive. Knowledge, like data, has always wanted to be free.

3 thoughts on “NYT’s future model? We suggest it’s not personalization.

  1. Let’s divide the print-media arena between Newspapers (papers) and Magazines and for this debate focus on the papers. Also let’s put me and you into the small “early adopter” category of the larger audience.

    In general papers have to “split the sausage.” The term, I believe, was coined by Jerry Wexler of Atlantic Records fame describing how the “old school” music industry made their $; they signed the artists, owned the studios, owned the presses, controlled distribution; they owned every piece of the sausage, it was one big sausage. The newspaper sausage needs to be sliced up, and repackaged.

    It is my belief that papers can start quickly with personalization (one slice), to gain revenues from what they already possess without having to be too inventive.

    The paper has to offer other, multiple, types of access to each of their different audiences and not treat them as one lump mass. Examples:
    – They could create an “inner circle” package with access to beat writers.
    – The print version could be modified to one “news-stand” and one shorter, less expensive “bulletin” (maybe singly sponsored?).
    – They could open up their home-page to allow me to add my favorite blogger streams (Alltop anyone?)

    More structurally…the paper could be split into non-profit and for-profit halves, one for the journalism, the other for content development.

    Addendum:

    I still argue that stating “Knowledge, like data, has always wanted to be free.” is a belief system. I can say the same thing for food. Food has always been free yet we LEARN to pay for it as there are mechanisms (education) and laws to support the industry. I feel the bigger issue is that the belief system needs to be altered, much like the English learned to take tea in the afternoon, a total construct to support an industry.

  2. Jason, again, great ideas. I like the sausage metaphor.

    Yes, as Chris Anderson notes, there are many ways to make money while services flow to the free. However if the aggregate demand for the product does not justify prices — given easy access to competitors — I believe that total revenue will decline for publications that used to have a lock on their readers and the associated advertising.

    NYT will survive, but the revenue model will be leaner. The people who used to pay for food are learning to find too much free food elsewhere.

    However, I really do like your ideas for alternative revenue models.

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