The New York Times is dropping its online paid-subscription plan two years after launching it (and four after The Globe and Mail launched the model The Times used). The spin is the online advertising boom change the rules of the game. However, advertising revenue would be a pittance compared to the potential revenue generated through annual subscriptions.
The real reason then? Uptake was less than 300,000 subscribers on 13 million unique monthly visitors. At about two percent, the online conversion rate is better than some, but that rate will decline as subscriptions plateau while site traffic grows.
Which brings us to the Trojan Horse of this announcement: archives for the past two decades are now free as are all public domain articles from 1851 to 1922. In addition, some material between 1923 and 1986 will also be released from the paid archive.
All of a sudden there will be near-primary source articles for a lot of historical events that, until now haven’t had a public online presence. From a business perspective, the company has greatly improved its available inventory and calls its competitors: release your archive or lose traffic. (While working at The Globe and Mail, one of my disappointments was being unable to convince enough people of the importance in freeing the digital archives from only institutional settings.)
Both The Globe and the Wall Street Journal rely on subscription revenue and are sitting on large archives, and I know both were re-examining their business models. The Times’ move, however, should help weaken those previously unassailable revenue models.