It’s hard to argue with the New York Times’ decision to tear down the ill-fated Times Select pay wall. (Here’s the paper’s letter to readers.) I never really understood the logic behind the for-pay service, launched in 2005, at a perfect counter-cyclical moment, just as everyone else on the Web was finally realizing that online advertising was beginning to fulfill the outsized promises made a decade before.
At Salon, we were more in sync with the Web’s business cycle: we started offering a for-pay service in early 2001, as we saw ad revenue heading into the toilet. In more recent years, as the ad revenue opportunity swelled, the company ratcheted down its subscription efforts.
So the Times is acknowledging a reality: that, for better or worse, charging for news content online is nearly impossible. The product is available in great abundance, for free, and the extra edge of brand and (frequent, though not guaranteed) quality that an institution like the Times offers is not enough to transmute into paying customers. (Watch Rupert Murdoch flip his abacus to the same conclusion at his newly purchased Wall Street Journal.) The Times was especially foolish in thinking that its columnists were the thing that people would most pay for — when commentary is the form of journalism in greatest over-supply on today’s Web.
Still, let’s be honest: the Web industry is cyclical. No one knows when this decade’s tide of froth will peak. (This event suggests we may be nearing the crest.) But someday it will. It will be 2001 all over again. And at that point all the execs who have been staking their careers on the promise of online advertising will stare at their dwindling quarterly returns and wonder why they hadn’t banked some subscription revenue as a hedge against a downturn.
It is this form of continuous knee-jerk reaction to market fluctuation that dooms the dinosaurs of today’s news business. These companies, like their companions in the broadcast and movie and publishing industries, seem to be incapable of taking risks and making long-term bets on new businesses. So they’re stuck in this dance of death, circling in the quest for a business model, always a little behind the curve.
Of course the Times, and the Journal, and institutions of similar scale and value will survive in some form. But they will never be as important tomorrow as they were yesterday. They can’t help viewing technology transitions as threats. So companies with no “legacy” revenue streams to protect will seize the opportunities that they can’t.
MORE: Jeff Jarvis’s commentary. Staci Kramer’s analysis. At O’Reilly, Jimmy Guterman, too, wonders what will happen to these companies in the next Net advertising dip.
[tags]journalism, media business, new york times, times select[/tags]