The New York Times is looking for ways to punish its most devoted readers -- and reward them at the same time.
On a conference call to discuss the publisher's second-quarter earnings, CEO Janet Robinson shed some light on internal thinking as to how the Times ought to be monetizing its digital content. "We believe it is very important to explore other means of deriving revenue," said Robinson -- "other" meaning aside from advertising. "Therefore, we are undertaking quantitative and qualitative research as to how many of our readers would be willing to pay for online content, and how much they would pay." (That research recently took the form of an e-mail survey asking subscribers if they'd pay $2.50 or $5 a month for website access.)
"At this time," Robinson continued, "our work is centered on a metered model and a Times membership model with special offerings." Those two directions make for an interesting, if not outright contradictory, pair.
A metered model, in which readers would be charged based on how many pages they view, would effectively create a negative incentive for readership, depressing the value of the paper's online advertising (which is why I've argued that newspapers should instead be trying to make their websites more addictive in the manner of video games). A membership model, on the other hand, would lavish perks on the most enthusiastic readers -- perhaps invitation-only live events, or online chats with op-ed columnists.
At any rate, Robinson said, it's too early to say just yet how the Times will proceed. She promised more information in the fall.
Now about those earnings: After posting a loss in the first quarter, the Times Co. was able to climb back into the black in Q2, thanks not to topline growth -- in fact, total revenues were down 21.2 percent -- but to aggressive cost-cutting measures. The company's operating costs will be some $450 million lower in 2009, following reductions across all major expense categories, said CFO Jim Follo.
About $20 million of that comes from pushing new contracts onto the unionized employees of the Boston Globe. It was only earlier this week that the paper's largest union voted to approve a new contract whose pay and benefit reductions will save the Times Co. $10 million a year.
Robinson declined to comment on reports that the Times Co. is seeking a buyer for the Globe, reportedly on track to lose $85 million this year. "What we will say," she said, "is that we regularly review our portfolio of properties to ensure they are meeting our financial targets."
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