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Is Paul Krugman Worth $49.95?


On Sept. 19, The New York Times rolls out the most ambitious attempt in years by a major newspaper to wring revenue from online readers. So we'll know soon whether the Times is very smart -- or not very.

With the debut of TimesSelect, 22 columnists will be available online only to those who ante up $49.95 a year and to the Times' 1.2 million subscribers. TimesSelect also includes archives back to 1980 (eventually, back to 1851), an early look at some of Sunday's non-news sections, and use of an online clipping service, TimesFile.

The big draw, though, is that columnists will engage in extracurricular activities with subscribers. John Tierney will oversee a book club and related discussions. Paul Krugman will host online classes pertaining to international finance, under the rubric "Money Talks." The sports columnists will gather for a twice-monthly chat. In "Everyone's a Critic," Frank Rich will post online observations and invite readers to debate sundry cultural topics, and Thomas L. Friedman will respond to reader mail. (Times execs wouldn't comment on how, or if, the columnists are compensated for extra work.)

TimesSelect targets the 1 million heavy users of nytimes.com who don't subscribe to the print edition, says Martin Nisenholtz, New York Times Co. () senior vice-president of digital operations. "We are not expecting 10 million people to pay for it," he says. "We don't need to have them for the business model to work extremely well."

THAT'S GOOD, BECAUSE HE'S sailing into a stiff headwind. It's true consumers are willing to pay more for certain media offerings. (Consider today's cable bill vs. 1995's, or the costs of broadband vs. dial-up.) But one key market perversity is that this dynamic does not apply to print. Financial analysts find a growing dependence of leading papers -- including the Times -- on discounted subscriptions.

And on the decade-old Web, "free" is the default setting, and it's difficult to make readers reboot. O.K., there's The Wall Street Journal (744,000 online paying customers and counting) and some targeted business sites. There are a few paid non-porn plays, like the Milwaukee Journal Sentinel's Packers Insider. But in August, the Atlanta Journal-Constitution doubled back on a year-old attempt to establish a paid sports Web site. In May, the Los Angeles Times made its calendarlive.com entertainment section free again, following a two-year bid to charge $4.95 for monthly access.

It has proven next to impossible to get online users to pay for something that's not hard business data (which promises to make them money or keep them from losing it) or that doesn't play into fanatical tribal identification. While the Times' Maureen Dowd is a darling of her ideological set, political loyalties have not yet translated into the face-painting extremes of sports.

"Everyone is trying to figure out ways to start charging consumers" for online access, says one publishing exec, "especially in the newspaper business." The Times, like all papers, has struggled with this issue. It once toyed with charging for online access to certain Sunday sections, like the Book Review and magazine. The issue has become complicated as traffic at newspapers' free Web sites increasingly draws ad dollars. One reason columnists are an interesting platform for launching fee-based services, Nisenholtz says, is that they're not an area advertisers clamor for, thus making it easier to experiment. The downside: The Times might discover that not even its vaunted brand can cadge dollars from online readers -- a stomach-turning prospect in an era when online behavior threatens print franchises and quality journalism still costs serious dollars.

Any move the Times makes these days invites spitballs, and Nisenholtz is well accustomed to playing an aggressive defense. He dismisses doubters of the Times' online plans by invoking strong double-digit monthly revenue gains at the recently acquired consumer guides network, About.com -- a much derided deal at the time. Of course, there's one difference between About.com and TimesSelect. About.com is free.

By Jon Fine


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