Think The Free Line Is So Smart? NY Times Gets Screwed

[Harlan]

Jonathan Fields is a smart guy.

He's a legal beagle who turned from the law and now is an online marketer.

He's also an all around cool guy.

But today's blog post is really brilliant.

So I'm strongly recommending it.

Jonathan Fields blog

And to make a little contest out of this...

Best answer (voted by you in terms of the most thanks) wins a prize I'll sponsor.

Answers must in in by Sunday Jan 24 at midnight.

There's nothing to buy on the blog.

Just some really cool ideas.

Peace.

[TiffanyDow]

Great article Harlan thanks!

I felt like he blames the consumer but I see it a bit differently

[Nathan Hangen]

JF is an awesome guy and a great contributor. I'm for this move, for a variety of reasons.

[Nathan Hangen]

Here's my comment over there:

Bravo NYT and anyone else finally drawing a line in the sand. I’m a huge believer of trading value for value and I really believe that most people wanting things for free wouldn’t pay for them anyway.

Most normal people understand that nothing is free to produce and as such, are willing to pay for the value that you provide.

The question then becomes, do you provide enough value to charge for your product?

[Denise Ashurst]

The Times under-took an experiment out of fear of inability to compete with the online free-line. They learnt something and learning always comes at a cost.
They will be around for a long time because they offer a lot of value, so let's just learn from their experience.

I can't agree with the Jonathan, that the Times trained us all "to believe it was economically valueless". Only small-minded folk can view it as such and readers of the Times certainly know different.

It is only either those perhaps with ambivalent feelings who will whinge about paying for their kind of value or those who can appreciate the potentially elitist nature of paying for for information who will object, given the plentiful value offered by the Times' competitors.

News - online or hard-copy - should never be a luxury only afforded by those with financial means to access it, true enough, but like every product, their market is targeted.

Those die hard fans of the Times with the resources to worship at their digital alter will subscribe.

As yet, those who want quality content can still find it for free online, if they are prepared to put in the time. This is the trade off the rest of us make if we seek their brand of information...

We either pay financially or in research time; this, like it or not, is the way of the world and the choice involved with the quality of many services.

We all have our differing priorities to spend out money on. My time will come, come the day the glorious BBC starts to expect a subscription instead of the present out-dated licence system. At present I do not pay for a TV licence, as I do not own a TV; thems the rules!

But I listen to BBC Radio daily and access their online site regularly too. I know that the licence payer subsidises my access and this is unfair and even if I have become happy with free access to their news, I may yet pay up should they change the rules, because I am not prepared to put in the time to dig out the tools they deliver me daily to help me live my life how I want to live it.

[Dennis Gaskill]

Originally Posted by Harlan

And to make a little contest out of this...

Best answer (voted by you in terms of the most thanks) wins a prize I'll sponsor.

Answers must in in by Sunday Jan 24 at midnight.

Best answer to what, the closing question of the article?

[Steven Wagenheim]

Harlan, this "problem" is compounded by many things and not being an
economics or social expert, I'm not going to try to guess which of the
factors are most important. So here's my take on this mess, in no special
order.

1. The economy sucks. It's sucked for a long time. People are tightening
their pocketbooks, regardless of all the "I'm doing great" stories you hear
at this forum and elsewhere. So as a result, merchants are competing,
harder than ever, for each person's dollar. This leads to either one of two
things...giving more for the dollar or lowering prices. I know there are
exceptions, such as in the luxuries market, but let's be honest...those
people are in the minority. The average Joe is just trying to make ends meet.

2. Technology itself has made it so that you can get just about anything
easier than ever before. Once upon a time, in order to buy all my CDs, I
had to go to my local record store or send away to one of those mail
orders like Columbia House and wait my 4 to 6 weeks to get the darn
things. Today...just go to Amazon and you can order and have your CD
in a few days. This makes it even harder for traditional retail businesses
to keep up unless they have a web presence. So the race begins and now
almost everybody is online. With all the competition...this also drives down
prices in many niches.

3. This leads to a spiraling effect where selling something cheap isn't
good enough to get your share of the market. Now you have to start
giving things away. And the free sample was always a part of our lives.
I remember getting free samples of toothpaste as a kid. But now we're
going way beyond samples. We're giving away things that years ago you
would have paid good money for.

4. This then leads to what I call "expectations." My uncle said to me, when
I was working for him back in the 70s, that it's easy to go from being
poor to being rich. It's the opposite that is so hard to do. People have a
very hard time making do without things that they used to take for
granted. Imagine one day...you have to give up...

Your PC
Your Cable TV
Your Cell Phone
Your Internet Connection
Your IPod

And so on.

Point is...we've let the genie out of the bottle and there is no way to
put him back in. Expectations are at an all time high. And why shouldn't
they be with all the free sites around that legally give us almost
everything we want?

Somebody wants to charge us? No problem...just search for an alternative
source. It'll be out there, because there is always going to be somebody
who will provide it.

The only way this problem is going to be solved is when the bottom falls
out altogether and these people offering free services are forced to go
out of business.

YouTube has finally found ways to monetize. How successful it is, I have
no idea...but they're trying.

Ultimately, when the free sources dry up because of no funds, people
will be forced to spend money again.

In the meantime, as businessmen, we have 2 choices.

1. We can join the herd and offer our competitive services and products
for free or...

2. We can find a way to deliver more value that a person would have
a difficult time not paying for.

For some niches, this will be relatively easy. For others, it's going to be
damn near impossible.

And no wishing or hoping is going to make it different.

That's why, as businessmen, we have to look at our competition, see what
it is they're offering and figure out how we can offer more and justify the
price we're charging for it.

Simple? Not really. Not as long as merchants continue to lower the bar of
expectations from their customers.

I'll start to worry when my cable company calls me up and tells me that
my TV and Internet are now free.

[Nathan Hangen]

Steve, I disagree. I think we can put the genie back in the bottle, but we'll just have to build a bigger bottle and give it a window.

More for free, the platforms are free. Give 99% away and charge for that last 1% that people want.

[Ken_Caudill]

I believe the web is restructuring itself. Robert Reich has his finger on it in the Future of Success. He talks about brands being gateways. Disney corporation doesn't make movies, but we know what level of quality we can expect from the Disney brand. The same will be true of the net. We already see it a little in blog networks.. Smart entrepreneurs will forge information and entertain gateways on the net that people will pay to enter. We will see a return to indexes, rather than the Google model which is geared almost entirely to information seekers.

What about people who are looking for entertainment or a good shopping experience? If people shop through a certain gateway, they will have a good idea of the quality they may expect.

United Artists was put together by Hollywood actors and actresses who wanted both artistic freedom and a fair share of the money they generated from their films.

I believe we'll see that happening on the net. Rupert Murdoch, not matter what you think of him, is right. Google has no right to suck its living from content providers and pay them nothing.

Like the cable companies, who provide a platform for content, we'll see new companies on the net that provide niche platforms. They may or may not be tied to ISPs, but there will be an ongoing fee for content. The income will be shared among content providers who will negotiate with the gateway for their services.

The entire idea of making money with free content is laughable. The only thing that model has done is release a torrent of crap all over the internet.

Free is dying and not nearly soon enough.

[DougHughes]

It's an interesting discussion for sure. I think what you are saying Ken is going to be more the wave of the future.

I think the Times will lose a lot of money this way and will see a drop off in readership but...Like you are saying, many will stay with the brand because they expect something from it.

In the future this will be the way things are. Like you say you will pay for entertainment, experience, shared values, etc...represented by the brand. Brands will become smaller but will be owned or controlled by huge networks.

I think the big breadwinners will be the networks with the most popular brands. I think now instead of having huge single source revenue streams revenue will be more dependent on a diverse basket of goods.

Thanks for the post Harlan.

[Harlan]

So you guys are coming up with some thought provoking ideas.

How are you going to translate what the Times learned into YOUR marketing.

Peace.

[Dan C. Rinnert]

I think things go in cycles.

Like early TV and radio. You'd have sponsors pay for the show. Then, that evolved into more general advertising to the point where shows didn't have a specific sponsor; they were funded by ads and ratings determined whether a program stayed or went.

People tuned in for free. Watched or listened for free.

Then, cable came along. You had to pay, but you got more channels, more options, etc. Advertising crept into there as well, but cable companies continued to charge consumers.

Now, there's the Internet. A lot of content online is available for free, sponsored by advertising. So, it's not unreasonable to expect that some kind of pay model will come into play again.

And then something else will come along, and free will become the wave again.

But, before free comes around again, the problem in the meantime could be how the fee-based Internet ends up working out. If you have to subscribe to certain gateways to access content, how will that work? Content providers may share revenues, but how does a content provider get into that gateway to begin with? Do they have to pay to play?

As it is right now, if you've got ten bucks for a domain name and some money for hosting, you can setup shop on the web. Have your own magazine. Have your own talk show. Promote your products. Whatever. The barrier to entry is low.

Before the Internet, if you wanted your own magazine, you needed money for printing presses or to have your content printed. If you wanted your own TV station, it was something like $10,000 for a license plus all the equipment. I imagine radio was similar. So, while you may have had the freedom to do any of those things, the barrier to entry was high.

The sad thing will be if a fee-based Internet will take us back to a high cost of entry. You might be able to set up a website for a few bucks, but if it costs you several thousand dollars to get into certain gateways where you'll actually be seen, you're not going to get anywhere.

So, I think we need to be cautious as to how the new model evolves. One thing is for certain and that's that the big companies will be looking out for their own interests, and what they argue to be best for the consumer will likely just be best for them. Cutting out as much competition as possible is always one of their goals, so we have to keep an eye on any fee-based models that take us in that direction.

In the meantime, while there is change, there is opportunity. If the sponsorship model works for you, take advantage of it while the big boys switch to subscription models. Differentiate yourself. Make quality a priority and give consumers the option of paying for quality content or continuing to get it free. As the zeitgeist changes, and people begin to get used to a pay model, you can start charging then. Even before that happens, you could offer premium content. There are a variety of different ways to do it. The key is to find what works for you, continuously adapt, and take advantage of the opportunities the current swing of the pendulum brings you.

[Lance K]

From the post...

Somebody always pays somewhere in the chain.

Isn't that the truth...TINSTAAFL

So, when’s our turn?

When the pain of disconnect is great enough that "we" will pay a rate that covers all costs + a profit margin which makes the enterprise worthwhile.

[Paul Myers]

Harlan,

There are a number of problems with the Times' model, along with just about every other similar site's approach. The first is that advertising in most sections isn't targeted enough to be as effective as a serious marketer would like. In addition to having the most commonly read sections be the least ad-friendly and the most expensive to prepare, they're appealing to a global readership with largely local advertising.

Add to that the problem that people go there with news in mind, rather than shopping, and you've got a classic example of the "free information" challenge.

And distraction? Who reads a piece about the devastation in Haiti and then clicks on an ad for the Style Magazine or a Chase credit card? The layout and reading process for online pages is not the same as for printed material. You don't flip through and happen to notice the ads the same way.

They're also using a blended model with several wrong ingredients. Print ads in newspapers are dropping in value at the same time that costs for preparing the info is increasing, and qualified reporters are fleeing the print world for their own little empires.

Additionally, the Times does proper reporting. That's not what the majority of people want these days. I've recently dropped several people I was following on Twitter and whose blogs I was reading because they were so strident in their "You're with us or you're evil" political views. I'm fairly sure that these extreme stances create more serious fans than they lose, though.

So, they're appealing to a smaller share of the market, on top of having a flawed model.

More importantly, the Times has provided no real motivation for anyone to pay for their services. There's nothing to be had through their site that can't be had for free.

That's a death knell for commercial content.


Paul

[Kurt]

Originally Posted by Paul Myers

So, they're appealing to a smaller share of the market, on top of having a flawed model.

More importantly, the Times has provided no real motivation for anyone to pay for their services. There's nothing to be had through their site that can't be had for free.

That's a death knell for commercial content.


Paul

It's kind of ironic...There are so many Warriors looking for content to be written for them, yet the NYT (and other papers) have all sorts of content producing resources.

This is what I'd do:

I'd follow the lead of my Denver Post. They take the most popular content (Denver Broncos) and make you sign up for the free "premium" service which gives you 2-3 extra Bronco articles. The "regular" folks only get about 1 Bronco article per day.

Now that they have the email, those folks are put into the "typical" marketing funnel.

Next, the get into product creation. They have so much content at their disposal, they could produce $7 reports all day long. From recipes to investment/finacial advice, real estate tips, sports, travel and more.

They could also produce their own software. For their "investment" newsletter, why can't they assemble a $7 report based on articles they've already written and/or new ones, clone some forex software and do a campaign?

Promote their software just like we do, plus to their own mailing lists...Whose forex software would you buy, Joe Marketer's or The New York Times'?

In short...I think they just need to create their own products, use their "authority" to get tons of SE traffic, and build lists....The same stuff we do.

[Dan C. Rinnert]

Here's a new news story that's relevant to this topic:

After Three Months, Only 35 Subscriptions for Newsday's Web Site | The New York Observer

[Don Schenk]

I went to the article Dan posted, and then decided to take a look at the Newsday site. It let me see just enough teaser copy in the headlines to make me try to enter the site. There it gave me a sales pitch.

So just for grins, I did a Google search for people and places mentioned in several of the headlines and, in every case, I found other news articles about the topic. All free content.

What a hornets' nest!

:-Don

[Marian Berghes]

I think that Times will be the "initiator"...yeah you found the news for free now, but its only hard for another couple of famous newspapers to make the same move as Times and then you might not find the same in depth or quality content like on these websites.

At least thats how I see things evolving.

[Kay King]

It was an excellent article but what I didn't see was the economic reality that large newspaper conglomerates have been right for several years - a battle they've been losing.

You don't have to have a newspaper to get the news today. 24 hour cable and internet blast "news" 24/7. It may be slanted, may not be indepth but clearly many people don't care. It's make them feel "informed" though in truth misinformation is the norm.

Newspapers are also having problems keeping the ad revenue up - companies are advertising online instead.

Magazine are in the same bind and some good ones have shut down already. The NYT made a good move initially to be part of the internet landscape but it was competing with itself. Our local paper here just did exactly the same by making their internet content subscription only.

The internet version is less than half the cost of the delivered paper. Can it be in years to come we won't have newsprint to help us pack when we move?

kay

[Lawrh]

Actually the New York Times isn't doing anything new. They are going back to the way they used to be.

It didn't work then, that's why they opened up. Back when they limited how many articles you could read, you simply cleared your cookies and cache and went to the next article. (that's what I did) Even if they do IP blocking this attempt will be futile as well as fast free proxies are abundant.

They will have to enforce secure logins which won't be too popular with their mainly non tech users. Passwords will probably start being posted around the 'Net.

[Harlan]

Great comments.

I'm glad you enjoyed the article but no one really showed how to apply the Times issue to their business with free line stuff.

Bottom line, I think we are seeing a rapidly changing Internet.

What we are doing today.

What we are selling today.

May not exist tomorrow.

Ride the wave or be buried under it.

Peace.

[Dan C. Rinnert]

Originally Posted by Harlan

I'm glad you enjoyed the article but no one really showed how to apply the Times issue to their business with free line stuff.

The people that run successful membership sites are probably the ones that need to speak up on that.

People pay for useful information (or entertainment, but that's a separate issue). News is largely a commodity.

You can get news anywhere. TV, magazines, newsstands, radio, etc. If one source goes pay-only, there are plenty of others that offer it for free. There was a local newspaper with a website that was always bugging you to register to read their content. You had to give them an eMail address and answer a couple demographic questions to get in. Meanwhile, competing newspapers didn't do that. The other newspaper still has an occasional nag screen but otherwise you can access it without registering. I think they (finally) learned.

For newspapers, the news is the product.

For advertisers, the news is a means to reach their audience.

For marketers, the news becomes a sales pitch.

The problem for newspapers is that scoops are rare and largely irrelevant these days. Back in the day, a scoop meant something. The other newspapers wouldn't be able to cover the story until the next edition, which was probably a day a way. These days, once word gets out, the reporting organization largely loses the advantage. Within minutes, it can be being reported by other news media, discussed on blogs, talked about on social networking sites, etc.

I don't think the old media has quite adapted to the loss of control.

The bottom line is that the news is everywhere, yet it's something that the old media hasn't learned how to leverage. Someone else talked about this either earlier in this thread or in another thread and that was that the newspapers have the staffs in place to create some great content, but they don't do it. I sometimes think they feel selling something would be beneath them or something.

Marketers will take a news story and turn it into a sales pitch. For example, if a disaster strikes somewhere, they can get the reader to ask themselves whether they or their families are prepared. If not, here's my eBook for disaster preparedness, covering everything from floods to fires to earthquakes and tornados.

You don't have to do a full sales pitch either. Say there's a house fire in town. Cover the story then offer your free report on fire prevention in the home. Inside that report will be a promo for your full eBook covering floods, fires, etc.

But, that's not the way the newspapers think. For marketers, that eBook is the product and the news is a means to get people thinking about it. The eBook is useful information for people; the news report is just information that (unless they know someone in the house fire) is not something that directly affects people. But, for the newspapers, the news report is the product. Unfortunately for them, when the neighbors are out with their camera phones and tweeting about the fire, the newspaper isn't providing much more information than anyone else.