NYT: It Pays To Be 'Free'

The recent comScore numbers are in and the answer is pretty clear: The NYTimes.com (NYT) won and won big, showing a 64% rise in readers and a 52% rise in page views over the last quarter. Why? The mid-September tear-down of the subscription edifice Times Select. TechCrunch carried the story on Monday and Marketing Pilgrim added onto it yesterday. Here is Marketing Pilgrim's interpretation of the NYT's decision to go free:

The main reason behind [why] they changed models is that search engines were bringing a new demographic to the site. In the past more people went directly to the site, and they were often regular readers who are loyal to the paper. People coming to the site via search engines were turned off by having to subscribe. Most likely they are looking at a specific article and want to pick and choose rather than read the entire paper. Sort of like how we want to buy our songs one at a time rather than buying the whole CD.

Right now subscribers generate about $10 million a year in revenue. After running the numbers the Times saw more growth potential in online advertising revenue than in collection for subscriptions.

I like the iTunes analogy. I think they are right on. I believe most online consumers of media, be they consuming text, audio or video, want it a la carte. They don't want to be forced to buy the entire paper, the entire CD, the entire movie. A snippet here, a song there, a micro-chunked video now and again, and I get what I want, when I want it and how I want it.

This is also consistent with Digg, StumbleUpon and other community-based recommendation engines, where people read and listen to what is popular and/or what their friends are into. And this is cool. And as ad targeting gets increasingly better, the value of these recommendations only gets more valuable to advertisers seeking to reach a particular demographic with empirical, measurable results.

And there is no doubt the Mr. Murdoch (NWS) has already internalized this phenomenon by announcing the freeing of the Wall Street Journal Online. He knows that edifice Rex - the realm of Old Media - is rapidly dying. And he is going to get out in front of it. MySpace was only the beginning...