[MGP-Forum Announce] Boston researcher thinks TimesSelect experience shows a market for content service charging

[Bill Densmore]

MGP2006 alum John Garfunkel has completed an eight-part, 21,000-word study 
about charging for content on the web. Garfunkel, a Boston-based software 
engineer and Princeton University grad, studied available public 
audience-traffic data for the New York Times website during the period when 
access to its columnists and archives were behind a "TimesSelect" paywall.

His report is dense and its difficult to draw hard conclusions from it. But in 
an interview, Garfunkel makes one key assertion: He says the influence of Times 
columnists, as measured by they amount they were referenced in blogs, dropped 
only about 20% during the period their material was "behind the wall."

In general, Garfunkel believes news organizations may be making a mistake by 
relying solely on advertising. But he nuances that. "The answer is not in 
charging for content, it is in charging for service," he says. "It seems there 
should be options in service or avoiding advertisements."

He goes on in an interview: "I found it disheartening that so many commentators 
like Jeff Jarvis were willing to go to 100% advertising supported. But if you 
read Neal Postman and any other media commentator going back decades, you 
wouldn't find anyone seriously trusting the credibility of 100 percent ad 
supported content." Garfunkel's self-published study is on his website:

http://civilities.net/TimesSelect

"There is a solution for newspapers to charge money to readers who want to pay 
money for a premium service of news," Garfunkel concludes. "I don't know if 
it's a viable market, but I have discussed in some more depth in this series 
and feel it should considered as well."

Garfunkel says The Times reported it pulled in about $10 million from 
subscriptions to TimesSelect. By comparison, he says, Fox News channel realizes 
$850 million a year in carriage fees from cable systems. "I think the economics 
of this bears further consideration by people who care about the future of 
news," says Garfunkel in an email report of his findings.

Garfunkel notes he did not have access to NYT's internal data. "The only person 
I spoke to at the Times was Marshall Simmonds, mostly to clarify some public 
facts," he says.

His key findings, he says:

-- During his study period (with TimesSelect in place) tThe seven regular Times 
Op-Ed saw their references in the blogs go up 8 times. A non-representative 
sampleset of pundits saw increases of 10 times -- a 20% drop-off.

-- Nielsen/NetRatings data for the period TimesSelect was in place, posted by 
Jon Dube at cyberjournalist.net, show an aggregate 27% increase in NYT traffic. 
Garfunkel says this traffic growth exceeds the growth during the same period at 
comparable, competing websites.

-- The paywall was not the reason that the Times archives did not show up in a 
Google Web search over the last two years. It was already indexed by Google 
News. Why it did not show up in the web search, was an application of Google's 
unofficial policy (as reported by Danny Sullivan) to favor non-subscription 
content.

CONTACT: Jon Garfunkel Boston, Mass. http://civilities.net/
jgarfunk at civilities.net / 617.939.3449

FULL DISCLOSURE: The author of this post is a shareholder in Clickshare Service 
Corp., which has developed a patented system for charging for content on the 
web.