How does a established news institution transform itself into a sleek Web 2.0 business? Martin Nisenholtz, SVP of Digital for the New York Times Company, is having a great deal of fun discovering what it takes to get people to pay for content:
Develop circulation, not traffic
To start with, Nisenholtz has drawn a line between Web metrics and online circulation metrics. For example, millions of people will visit NYTimes.com to just read one article, or will quickly blink over a page in response to a search result or a blog link. This highly ephemeral Web traffic can add up to 2.5 million unique visitors per day. Online circulation, however, is measured at 570,000 TimesSelect subscribers.
Keeping this distinction in mind, Nisenholtz has set these goals across all digital properties:
- Attract more users, period.
- Keep users coming back, and staying longer. Increase not only the average number of visits per reader, but also the average number of page views per visit.
- Convert casual visitors into serious readers. Even if only a
fraction of the site's 20 million casual visitors each month joined the pool of 1.5 million loyal readers, it would make a significant impact on the business model.
The rising importance of 'circulation' numbers has driven a major shift in online advertising. Unlike a typical Web company, the Times and other news publishers don't have restrictions on the number of ad impressions per visitor. While most Web advertisers restrict the number of paid daily ad impressions to 3 or 4 per visitor, Times advertisers actually seek higher frequencies.
Transform the established culture
I visited Martin in the New York Times offices last week, and it felt like being backstage at Phantom. The New York Times has always been the real newspaper, and its impressive archive dates back to 1851. Like a tourist, I greedily enjoyed the view whenever the elevator paused to open its doors, and wondered what dastardly plans had been exposed by the innocuous-looking journalists passing by. Behind this bustling news scene, however, the organization is changing. Cross-platform sales training has become the norm, as the digital business scales. The sales team is challenged to get digital salespeople working with the advertising department, while the print staff must educate itself to become more Web-savvy.
Cultural transformation also takes place via acquisition and investment. The Times organization acquired About.com 18 months ago, and local search is being rolled out and tested in the Boston area via Boston.com. They've also made investments into Web 2.0 companies such as indeed, Federated Media Publishing, and daylife. (Disclosure note: Omidyar Network is an investor in Federated Media.)
I suspect that core Times content will always follow an authoritative model, where information is both edited and vetted for accuracy, and there are twice as many editors as reporters. At About.com, however, each editor supports an entire classroom of guides. The publisher's next challenge is a big one: How can it leverage
user-generated content? How can it become more distributed and less
edited? If the Times can figure out how to edit both the 100th and the 10,000th guide profitably - or how to achieve consistent quality without editing - then the business will be well-placed to become an established institution online as well as in print.