The free videos, which can be viewed on all desktop and mobile devices, are for now being sponsored by Acura and by Microsoft.

“We have a desire to grow and invest in our video content,” said NYT executive vice president Denise Warren in a phone interview. “Part of the reason we’re doing this is because we’re already distributing on other channels like YouTube. Since it’s already available [...] it seems inconsistent to keep it behind the gate.”

Warren added that the Times is still in the process of ramping up its video strategy but that its eventual plan is to build franchises around brands associated with the paper. One hypothetical example she cited is the Times’ “36 Hours” travel column. Prominent writers may also become video brands (bloggers like Nate Silver seem likely candidates, though Warren refused to name names).

The plan comes at a time when newspapers like the Times and the Wall Street Journal are still learning how to translate their famous brands into a video format. The task is a challenge because the bulk of their editorial staff consists of text-based journalists who don’t necessarily possess the aptitude or charisma for video. In response, the Times has so far adopted a go-slow approach, producing about 60 short videos a week, though Warren says streaming rates took off during the November election and have remained high.

Warren suggested the Times‘ video output will go into high gear in response to the extra advertising investment, and the February arrival of Rebecca Howard from the Huffington Post, who occupies the new position of general manager of video production.

The Times’ decision to offer unlimited video is intriguing because it will test the paper’s ability to master the format, but also because it contrasts with the company’s recent efforts to make its paywall less porous. In recent months, for instance, it has blocked easy tricks that let readers circumvent the article limit.

Here’s a recent example of the Times’ video efforts:

The idea, much as it was with printed content, is to archive the U.K.’s cultural and intellectual output. The libraries — including the British Library, the national libraries of Scotland and Wales, Trinity College Library Dublin, the Bodleian Libraries and Cambridge University Library — will be allowed to scrape and store everything on the .uk domain, and to demand copies of ebooks, e-journals and even CD-ROMs published in the U.K.

Here’s an interesting snippet from the FAQs:

“Legal Deposit Libraries will copy U.K.-published material from the internet, including freely accessible material on the open web. They are also entitled to harvest copies of password-protected or paid-for material, but are putting alternative arrangements in place for any publisher who prefers to deliver such material to them instead.”

A British Library spokesman confirmed to me on Friday that this was a reference to paywalled content. However, given that people will only be able to access the archive by physically visiting the libraries in question, and that there will be a seven-day lag between publication and archiving, that shouldn’t be too much of a problem for the publishers.

The spokesman said social media output would also be included, “as long as it is U.K.-based and openly available on the web,” and confirmed that this includes identifiably U.K.-based individuals’ Twitter feeds, although “we’d need to select people because it’s a .com” — no Library of Congress-style catch-all approach, then.

“The main thing we’re trying to capture first time round is .uk domain websites,” the spokesman added, while also stressing that no non-public social media material would be scraped.

On the book publishing side, The Bookseller reported that priority will be given to ebook-only publishers. This is presumably because those who aren’t ebook only are already submitting their books under the previously existing legal deposit scheme.

So why is this all happening? As my colleague Mathew Ingram pointed out last year, digital content can often be ephemeral and easily lost. That sentiment was echoed on Friday by British Library chief executive Roly Keating:

“Ten years ago, there was a very real danger of a black hole opening up and swallowing our digital heritage, with millions of web pages, e-publications and other non-print items falling through the cracks of a system that was devised primarily to capture ink and paper.

The regulations now coming into force make digital legal deposit a reality, and ensure that the Legal Deposit Libraries themselves are able to evolve — collecting, preserving and providing long-term access to the profusion of cultural and intellectual content appearing online or in other digital formats.”

The U.K. is not the first country to update its legal deposit rules in this way – similar requirements are in place in Denmark, Finland, Sweden and New Zealand.

Variety announced the moves early Tuesday, saying the tabloid will drop its daily print edition as of March 1 and publish only a weekly version on paper. The paywall, which charged users $250 a year for access to Variety content, comes down at the same time — Penske called it “an interesting experiment that didn’t work” — and in a somewhat unusual decision, the paper’s editor has been replaced with three editors, each of whom will run different sections of the magazine.

Penske, the son of famed race-car driver and NASCAR operator Roger Penske, isn’t a newcomer to the power of digital: he was a co-founder of Mail.com, which he sold to a German internet company in 2010, and before that helped start a mobile company aimed at children called Firefly.

We're all going to miss Daily Variety in print but now we'll be faster and more nimble. It's a good move.

—
David S. Cohen (@Variety_DSCohen) February 26, 2013

The new owner bought Variety in October from owner Reed Elsevier for $25 million, after the European publishing conglomerate reportedly cut the price it was asking for the magazine — once reportedly valued at more than $200 million — by 25 percent. Penske added it to a stable of online properties that includes the Deadline site and MovieLine.com, as well as the well-regarded technology blog Boy Genius Report and HollywoodLife.com, a site run by former the former editor of Cosmopolitan, Bonnie Fuller.

If Penske was hoping that his moves would be applauded by his other sites, he doesn’t know veteran Hollywood gossip writer Nikke Finke, who runs Deadline Hollywood. In a scathing post about the dropping of the paywall and the decline of what she called “the beleaguered trade,” Finke said editorial morale at the entertainment trade magazine “is at its lowest ebb and anxiety is running sky high,” and described advertising as “non-existent” and readers as “few and far between.”

Sharon Waxman, who runs an online competitor called The Wrap, also warned that Variety could have a lot of work on its hands, since — like many other newspapers and magazines — print advertising in the daily edition likely made up a large proportion of its revenues.

Post and thumbnail images courtesy of Shutterstock / wavebreakmedia and Flickr user Pew Center

The Bloomberg story cites an Evercore Partners analyst who predicts the NYT Co will earn $91 million in 2012 through digital subscriptions, a figure that will account for 12 percent of all circulation revenue. The story also says things would look even brighter if the Times wasn’t being dragged down by a sickly Boston Globe.

Well, maybe. We’ll acknowledge that the Times has developed the most sophisticated paywall strategy of any paper to date, and that digital sales are crucial to its future. But this doesn’t mean that its paying online subscribers (now 566,000 and growing) will be enough to make up for declining ad revenue. The reality is that the paper is riding a temporary revenue wave that comes from boosting its print and newsstand subscriptions. The company continues to be coy about how much circulation revenue is from digital versus print — and how many digital subscribers will stick around once a raft of promotions expire. As my colleague, Mathew Ingram puts it, the company is running faster and faster to stay in place.

The New York Times is here for the long term but it will not be able to sustain itself in its current state on digital dollars alone. It’s a good bet that the Times will soon be looking harder at expanding its events, partnerships and other business opportunities.

(Image by Carlos E. Santa Maria via Shutterstock)

It’s easy to forget now, but when The Daily was first launched a little less than two years ago in February of 2011, there was a tremendous amount of attention paid to it. Apple’s iPad was still relatively new, and many publishers were hoping it would become a kind of magic carpet that would whisk them all out of the doldrums and into the promised land of revenue-generating digital content — and Murdoch was seen by some as leading the way. Obviously, the tablet newspaper failed to do anything of the sort, and in that sense its failure is just part of a gradual process of publishers waking up from their dream about apps.

Are tablet-only publications an impossible dream?

Reuters writer Felix Salmon, in fact, argues in a post on The Daily’s death that it proves tablet-only publications may actually be impossible:

“I think that The Daily has taught us all an important lesson — which is that tablets in general, and the iPad in particular, are actually much less powerful and revolutionary than many of us had hoped… the tablet is basically just one of many ways to see material which exists on the internet; it’s not a place to put stuff which can’t be found anywhere else.”

The @daily bet traditional business/editorial assumptions would work in a new medium that resists them. Is that innovation?

—
John McQuaid (@johnmcquaid) December 03, 2012

In many ways, the seeds of The Daily’s demise were (or perhaps should have been) fairly clear from the start: in my initial review of the app, I mentioned that the two most obvious things about it were that it ignored the web almost completely — showing anyone who came to the website via a shared link what amounted to a photograph of the relevant page from its app — and the content seemed rather disappointingly dull, in a traditional newspaper sort of way. Both of these criticisms have also been echoed by many of those who responded to its death notice on Monday.

Why did it have to be daily?

In addition to criticizing The Daily for choosing to go with a paywall for product that was unknown to most of the market it was trying to reach, journalism professor and author Jeff Jarvis says the iPad venture also took a flawed approach to news:

“Finally, there was the absolutely befuddling decision to make The Daily daily. News was only ever daily because it was forced into that limitation by the means of production and distribution of print. The internet freed us from those shackles of time. Why put them on again? Nostalgia?”

@carr2n @mathewi @Penenberg Innovate? No, it tried to shoehorn an old business & product model into a new device built on pay wall zealotry

—
Jeff Jarvis (@jeffjarvis) December 03, 2012

Alexis Madrigal at The Atlantic notes that The Daily failed in part because it was aimed at a “general news reader” instead of a niche, but also says it ignored the fact that media outlets no longer control the distribution of their content, regardless of whether they have an app-only approach. By divorcing the product from what Om has called the “democratization of distribution,” The Daily doomed itself, he says:

“There’s not much anyone on your Internet’s favorite websites can do aside from stick a story on the homepage, tweet/Facebook/tumble/Reddit/LinkedIn it and then pray. We do not control the distribution of our work. Period. It’s horrible and bizarre and it is also the way that the media world works now. You can’t push; the content has to pull.”

Peter Ha, an early employee at The Daily who now writes for Gizmodo, echoes this point in a post he wrote about his experience with the iPad paper. Great content, he says “doesn’t do much good if there’s no good way to share it… The Daily had every chance of flourishing and succeeding, but operating independently of the Internet as a whole was clearly a huge mistake.” And another former employee, Trevor Butterworth, summed up his view of the venture’s cause of death in a posting on his Facebook page:

“You can’t create an entirely new brand and take it behind a paywall after 4 weeks, while limiting its footprint on the Internet, and then expect people to buy it. Where was the marketing? Second, it simply added more average-reader content to a market saturated with free average-reader content.”

If you are tablet-only and paywalled, it better be good

The Daily was never an "experiment," it was an expensive, stupid, business decision.

—
  (@dansinker) December 03, 2012

John Abell of Reuters also says that regardless of whether you believe an iPad-only app like The Daily could have survived, it was doomed in part because the content was so underwhelming. He writes that he “grew increasingly annoyed at the extent to which I was reading wire service copy… In other words, I couldn’t find any reason to turn to The Daily as a news brand, and that has to be the absolute baseline requirement for a publication.” Peter Kafka at All Things Digital made the same point:

“The Daily’s key issue was a conceptual one. While the app boasted lots of digital bells and whistles, in the end it was very much a general interest newspaper that seemed to be geared toward people who didn’t really like newspapers. You can’t make that work no matter what kind of platform you use.”

For his part, Josh Benton of the Nieman Journalism Lab says that despite the issues with content and the paywall and ignoring the web, he believes that the biggest issue was the structure of The Daily — in other words, its sheer size and its daily-newspaper style approach to a digital business:

“The Daily had over 100,000 paying subscribers. That ain’t nothing! With most subscribers paying $39.99 a year (others paid 99 cents a week), minus Apple’s cut, that’s around $3 million in annual revenue — and that’s before you add in advertising revenue… You can absolutely build a real online news organization on that kind of revenue. You just can’t build one that has 200 staffers. Or 150 staffers. Or 100 staffers.”

Any analysis of The @Daily's fall that doesn't begin and end with it having a staff of more than 100 is useless on arrival.

—
Michael Roston (@michaelroston) December 03, 2012

A bold experiment, yes — but still doomed

A number of observers, including Benton, say that despite all of its flaws, Murdoch and News Corp. should be given some credit for at least experimenting with something like The Daily at a time when many newspaper companies are content to just cut costs by laying off staff. Benton said that News Corp. “made a pretty big bet on an idea. It didn’t work out. But at least they tried.” David Carr, media writer for the New York Times (which has just announced a new round of layoffs — its fourth round in five years — had a more visceral response on Twitter:

@mathewi @Penenberg Y'all kill me. You say dinosaurs need to innovate. News Corps tries something really new that flops, you grave dance.

—
david carr (@carr2n) December 03, 2012

In a sense then — to answer the question posed in the headline of this post — The Daily was both a bold experiment and doomed from the start. It was bold from the point of view of a major media empire with little or no understanding of the web or mobile, and a lot of other media companies without Rupert Murdoch’s deep pockets were watching it closely to see whether they should jump, and if so how to proceed. But then many of the lessons that could be learned should have been obvious even before The Daily launched: don’t ignore the web, don’t make your content platform-specific (unless it is unique), and don’t put a paywall around something no one has ever seen before.

Post and thumbnail images courtesy of Flickr user Stephen Brace

“Here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” — The Red Queen, Alice in Wonderland

When it comes to the evolution of newspapers in a digital age, the New York Times is clearly something of a bellwether — and in particular, a sign of whether paywalls can (or can’t) make up for the ongoing dramatic decline in advertising revenue. Unfortunately for anyone in the industry who was hoping for a definitive answer, however, the paper’s latest financial results are a mixed bag. Subscription revenue rose, but both print and (perhaps most disturbingly) digital advertising continued to fall, raising the question of whether the Times will ever be able to close that gap, or whether it will have to become a much smaller and primarily reader-financed business.

The paper has already crossed the crucial point at which revenue from readers — whether through print subscriptions or digital subscriptions — has eclipsed the revenue the paper gets from advertising, a transition that other newspapers such as the Financial Times are also quickly approaching. But as more than one person has noted, there are two ways to reach that point: one is to have your subscription revenue increase, and the other is to have your advertising revenue decrease. Both of those are happening at the Times, and the only question is which one will slow down first.

Print ad revenue still falling, but digital down as well

As my colleague Jeff Roberts reported, overall advertising revenue for the company — which includes The Boston Globe — declined by 8.9 percent to $182 million, with print ads down by almost 11 percent and digital off by over 2 percent. For print, the story was the same as it has been for the past few years: continuing double-digit declines in real estate ads and other key classified categories that used to be bread-and-butter for newspapers. For digital, however, the picture was less clear. A spokesman for the paper said the drop in digital advertising was a result of:

“The challenging economic environment, ongoing secular trends and an increasingly complex and fragmented digital advertising marketplace.”

On the company’s conference call with stock analysts, the company tried to explain what one analyst called the “shockingly bad” advertising numbers, blaming “an abundance of inventory” and “efficient buying methods such as programmatic buying” offered by search engines and large advertising portals like Google and Yahoo. In other words, CPM rates — what advertisers are willing to pay for every thousand viewers of an ad — are continuing to fall, and the New York Times seems unable to shore that up at all (at least so far).

Subscription revenue was a much nicer story, since it rose by 7.4 percent to $235 million, but at least some of that has come from higher prices for the print product as well as an increase in subscribers to the digital product, where the paper now has 566,000 paying readers (although it’s not clear how many of these are subsidized in some way by discounts, etc.) And even though the boost in subscription revenue amounted to about $16 million for the quarter, that was still less than the $18-million or so drop in overall advertising revenue. So one of those factors is still falling faster than the other is rising.

The risk for the Times — and for a growing number of other newspapers that are making a similar bet on paywalls as a solution for their problems — is that advertising revenue could continue to fall, and even pick up speed, but the same probably can’t be said for the rise in subscription revenue. At some point, the number of people who want to subscribe to either print or digital will stop rising so quickly and begin to level off, the only real question is when.

A paywall can also reduce advertising revenue

There’s related risk with a paywall that the NYT and other newspapers face, but it’s one they don’t talk about much, and that is the effect that charging readers — which necessarily involves pushing some readers away — itself has on advertising. The Times has said that the decline in digital readership (and therefore the potential impact on advertising revenue) has been relatively modest, but results from comScore suggest otherwise: the numbers appear to show that pageviews have fallen by about 15 percent and unique visitors by almost 20 percent.

Newspapers like the Times could theoretically argue that each of their visitors or readers is much more valuable because a large proportion of them have paid to view the content, but it’s not clear whether advertisers will buy that argument, or be willing to pay higher rates for the privilege. It could be worse for the New York Times, of course — it could be reporting results like McClatchy, which saw both circulation and advertising revenues decline. But the question of what the NYT does as ad revenues fall and subscription revenues slow remains to be answered.

It’s true that no one is really doing a booming business in digital advertising right now, even Facebook, because the business is in the process of being disrupted. That’s why it would be nice to hear about how the Times is trying to change the way it does advertising as well as resting its hopes on a paywall — which is part of the reason why I think that if a paywall is your only strategy, you are probably doomed to be a much smaller business than you are now.

I’ve argued in the past that a membership model that provides added benefits for valued readers — whether it’s ebooks or live events or some combination of such features — is a better approach than a paywall, and the experience of some publishers such as The Atlantic seem to indicate that this is so. To me, newspapers like the Times would be better off trying to get to know their readers better so that they could offer them advertising or other features, rather than simply hitting them with an undifferentiated paywall.

In the end, newspapers watching the Times have to ask themselves not just whether they can duplicate the short-term revenue success of the paper’s paywall (which some or all of them may be unable to do), but also what happens when that still doesn’t make up for the decline in ad revenue.

Post and thumbnail images courtesy of Flickr users jphilipg and Flickr user Giuseppe Bognanni

But the company said favorable trends at About.com, particularly in cost-per-click advertising, helped improve digital advertising results and kept its overall advertising decline down compared to Q1. From Chairman and acting CEO Arthur Sulzberger Jr.’s statement: “Although we recorded a non-cash charge in the quarter, the About Group continues to execute on its turnaround strategy and we expect it to be on track to post continued meaningful improvement in the second half of the year.”

The About.com charge stole some of the afterglow from the Q2 sale of the company’s remaining shares in Fenway Sports Group for $63 million; the total sale over two years was $225 million.

Sans special items, NYTCo increased profit 6.5 percent to $78.1 million from $73.4 million and turned in earnings per share of 14 cents compared with 11 cents in Q211.

Digital circulation up

The company reported reported 532,000 paid digital subscribers across its News media Group, up 13 percent from 472,000 at the end of Q1. The company attributes the uptick to its decision to cut the number of NYTimes.com free articles in half (as Sulzberger puts it: “our decision to move the gate on NYTimes.com from 20 to 10 free articles a month”) and to a marketing push.

The digital circ is reported in two clusters:

• the NYT and International Herald Tribune had roughly 509,000 subscriptions for digital packages, e-readers and replica editions at the end of Q2, up 12 percent from Q1.

the Boston Globe, which launched pay site BostonGlobe.com in the fall is slowly adding subscribers, hitting 23,000 for the site and e-reader/replica editions, up 28 percent from Q1. It may be tempting to compare its progress to that of NYTimes,com but it would be a mistake. It’s a smaller paper and a different model.

Digital advertising

As mentioned above. About.com is credited for stemming the overall digital advertising revenue decline — but decline is still the operative word and About.com played a big part in that. Excluding the writedown, About.com operating profit dropped 30.4 percent to $10.2 million from $14.6 million, while advertising revenues dipped 8.7 percent to $25.4 million from $27.8 million on display and cost-per-click declines.

Digital advertising increased as a percentage of overall ad revenues for NYTCo to 31.4 percent from 30.5 percent in Q211. Digital now accounts for nearly one-fourth of the News Media Group’s advertising revenues. Total NYTCo digital ad revenues dropped four percent to $76.7 million from $79.9 million, while the News Media Group kept it to a 1.6 percent dip.

The earnings webcast is at 11 a.m. EDT.

The Chicago Tribune will at last begin charging for its online content through an innovative scheme that will also give readers access to a premium package of third party content, the newspaper has told paidContent. Under the plan, readers will see selections from the Economist and Forbes magazines included in a new paid section, which will also include Tribune content that has been newly designated as premium.

According to Digital VP Bill Adee, the Tribune will not block readers from content at first but will instead ask them to register. This registration period — which will be introduced in the next few days — is intended to let readers know that a payment plan is on the way, and will also serve to familiarize them with a site redesign the Tribune is introducing at the same time. The paper says it plans to begin introducing article limits for non-subscribers later this year.

The Economist and Forbes content is being supplied via NewsCred, a news platform that relies on technology to rapidly curate and license content from over 800 partners. Adee says the Tribune will be able to get the other publishers’ content for rates equivalent to a newswire service and that the paper is in the process of adding another business news partner in coming weeks (it could be Bloomberg — a NewsCred client — but that is just a guess).

“If you ask people to pay more than you asked before, they’ll expect more from you,” explained Adee, adding that the Tribune also plans to make several dozen e-books available to online subscribers. The paper’s own account of the changes is here.

The Chicago Tribune is among the last major papers in the country to introduce a paywall which has given it times learn from others’ efforts. These include the “metered” strategy (allowing casual readers to see a certain number of articles for free) which is now nearly universal and a decision to make content shared via social media available to everyone. The Tribune is also following the LA Times‘ effort to make online subscribers feel that they are buying a membership to more than just the paper; the latter does so by offering tickets and event discounts to its subscribers.

The Tribune‘s decision to include content from the Economist and Forbes is by far the most intriguing part of its strategy. It means the paper will have to earn more digital revenue simply to pay for the outside content. But the approach stands to pay off by offering Tribune readers a richer world of reading behind the paywall without having to put too much of its content out of sight (Adee says the competitive landscape means coverage of the Cubs and other Chicago sports will remain available to everyone).

For Forbes and the Economist, the plan appears to make perfect sense. While there is a small risk of cannibalizing existing readers, this will be offset by the fact that not all of their content will be available and by the opportunity to expose their brand to hundreds of thousands of new readers. There is also a paycheck for the third party publishers. NewsCred CEO Shafqat Islam would not disclose specific revenue figures and only revealed, “we’re able to give our providers a significant monthly payment.”

(For more on NewsCred, see “Technology, middlemen and the future of news“)

(Image by Steven Broer via Shutterstock)

“The third country we are launching in July will be much larger than the two we already have combined,” CEO Tomas Bella told me during our on-stage panel discussion at paidContent 2012.

“That will be where we want to prove this can work in bigger countries as well.”

Piano claimed first-month sales of €40,000 ($50,000) in Slovakia and €26,000 ($33,000) in Slovenia. Several major publishers have placed on average up to a tenth of their web content in to the independent system, which costs €3.90 per month in Slovakia and €4.89 in Slovenia.

There is a question mark over whether Piano can replicate even these small numbers outside its own back yard. But Bellas is betting on operating in six or seven countries by next year, as publishers’ willingness to charge continues growing.

“We are struggling to scale the company because the size of one publisher in this (third) country is the size of all the publishers in the other two countries.

“After we prove this in September and October, we still have a lot of demand from other countries.”

And he explained how some Piano publishers are making about a third of their money from payments now:

“Media which put 20 to 30 percent of their content are at three, four, five percent of conversion to paying users.

“The best ones are getting 30 to 40 percent of their online revenues from this source after one year.”

“The impetus for the free trial is getting the word out on new features, including the Boston Globe e-paper,” said Peter Doucette,
Executive Director, Circulation Sales & Marketing.

The e-paper is what is known as a “replica” and mimics the traditional look and feel of a newspaper on a screen or tablet.

BostonGlobe.com launched last October but so far sign-ups have been sluggish. The site has only attracted 18,000 paid subscribers so far.

Part of the challenge may be cannibalization from the paper’s affiliated site Boston.com which pre-dates the new site but also draws on content from the Boston Globe.

The freebie offer lasts for 12 days and is sponsored by Coldwell Banker Residential Brokerage. Other papers, including the New York Times and the Wall Street Journal, have done similar promotions in which a select sponsor takes down a paywall, or part of it, for a short time.

The Globe is also offering a 99-cent week introductory offer the first eight weeks. The site is free for print subscribers.