This means that about 217,000 online-only subscribers at the end of February were bringing the Times a potential $10.8 million in subscription revenue. Therefore it seems that the controversial TimesSelect pay-wall is starting to bear its fruits.
But lets put these numbers into perspective.
The New York Times Co. is expected to report $3.3 billion in revenue for 2007. Of that, about $350 million will come online.
So, TimesSelcect remains a drop in the bucket of overall revenue, and a mere three percent of online revenue.
Chainon says that since the Times went from a half-price subscription to a free subscription for .edu users just a couple of weeks ago, the number of .edu subscribers has tripled. What does that tell you about people’s resistance levels to paying for online content?
Vin Crosbie noted recently that the Times has gotten only 1.6 percent of its online audience to pay for TimesSelect. That’s not an impressive number.
As I write this, I haven’t yet found a report on NewYorkTime.com advertising revenue, but this report says that About.com did more than $6 million in advertising revenue in February and more than $7 million in January. As far as I can tell, About’s source of advertising revenue is banners and text links (visit the site and note: no banners on the home page). About is growing advertising revenue in excess of 20 percent.
About reports 44 million unique users per month, while the Time reports 13 million (PDF). The Times has other sources of online revenue besides banner and text ads (such as the verticals, real estate, autos and jobs), which accounts for a much higher multiple of revenue per unique user.
A straight comparison between the two sites isn’t possible, but clearly audiences on this scale generate significant opportunities to grow non-subscription revenue.
So the question becomes: How much money is TimesSelect costing the New York Times? The lost advertising revenue could potentially exceed $10 million annually. It’s hard to calculate for sure, but just in eyeballing it, it seems possible, if not probable. The disparity is certainly enough of a cautionary tale for other publishers considering pay models.
As I’ve noted in a number of previous posts: People don’t pay for content, except in unique circumstances. They pay for delivery. On the web, publishers have marginal delivery costs, and consumers are already bearing the financial burden of computer, modem and pipe. It’s going to be a battle to get readers to pay for general-interest content. I don’t see it working. Ever.