Fascinating denouement to a two year experiment in revenue seeking for online newspapers, that was widely loathed from the beginning. It seems that the Times Select experiment did little but rob some of the New York Times best writers of their online audience and, therefore, influence. Jeff Jarvis explains the difference between ‘revenue’ and ‘profit’:
The financial analyses of TimesSelect were always too simplistic — as if revenue were profit. The Times obituary for its service said that the service collected $49.95 per year or $7.95 per month from 227,000 paying customers at the end — 787,000 total customers, including print subscribers and, recently, academic readers given a free ride. The Times said it brought in $10 million revenue after two years, which sounds damned respectable. But no one ever mentioned the marketing cost to get that revenue. A magazine that costs $50 a year will spend almost that much acquiring subscribers.
No one mentioned the extra editorial costs of creating more content to try to make the damned thing special enough to pay for. I never heard any calculation of the customer-service cost of maintaining that many customers, most of whom brought in no revenue. And then there was the question of how much revenue was lost in the Times archives, included in the deal. So though TimesSelect may have brought in revenue at a rate of $10 million at the end, it didn’t earn that much profit. I wonder whether it was profitable at all.
And TimesSelect cost the paper much more in the internet age: It took the Times columnists out of the conversation and reduced their influence in America and worldwide. Worse, it diluted the paper’s Googlejuice. Even as the Times acquired About.com, a grand demonstration of the economic power of search-engine optimization (where, full disclosure, I consulted for a year and a half), the company shut off some of its content from Google’s search and bloggers’ links. That was its greatest harm.
PS: if you know an editor, trustee or owner who should read this story, don’t stint, pass it on!