The New York Times announced today that it will start charging visitors to its website in 2011, using a metering system that will allow access to a limited number of articles per month before requiring people to pay. Jeff Jarvis says the move is likely to hurt the Times’ relationship with its most loyal readers, when it might, instead, focus the majority of its advertising and engagement efforts on this core audience. He lists several reasons why the Times is making its second effort in six years to charge for online access, but this one stands out:
Its costs are too high — and rather than cutting them into a rational business, it desperately seeks some other revenue.
As it stands, the online operation at media companies is expected to pay both for itself and the legacy print operation. That’s simply not feasible. The only long-term fix is to completely realign these organizations around content-focused staff, and cut anything else that’s weighing down the operation. John Gruber frames it in terms of evolution and extinction:
The question these companies should be asking is, “How do we keep reporting and publishing good content?” Instead, though, they’re asking “How do we keep making enough money to support our existing management and advertising divisions?” It’s dinosaurs and mammals.
Rob Patterson suggests separating the paper and online costs and revenue – on the books – to more clearly illustrate the difference in cost structure:
Put all the costs related into the paper into the paper and all the direct revenue from the paper into the paper. All the web revenue and costs into the new bucket. You can do that now – it’s an accounting exercise.
I’m surprised that newspapers don’t see the “green” or “eco-” angle in announcing that the Web has superseded paper as their focus, and moving to make actual newspapers a higher-cost, boutique item. Or, put another way, cannibalize one of their own lines of business in order to make room for the other to take over.
With all this talk of the clocks ticking for legacy businesses, isn’t it time for at least one of these businesses to formally announce that the clock is ticking for paper?