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An entrepreneurship and adventure blog: THE DREAM IN ACTION (by Ryan Graves)

Monetizing the Superuser

The New York Times announced that they plan to start charging for the online content. This has been a VERY scary thing for the industry and a topic of much debate. As Fred Wilson said back in July, “the newspaper industry is doing a lot of soul searching for the right revenue model”.

So why hasn’t monetizing new content worked well to date? Why hasn’t the ‘freemium’ model worked well for the news industry like it has for so many other industries? In short the answer is, they’ve gone about it in the wrong way, and luckily it seems that NYT is learning from others mistakes. As newspaper readership migrates from print to web they’ve got to be able to monetize the move and it seems the solely advertising model has proven to be an insufficient way to monetize that content.

If a newspaper was to charge you based on how much you consume (per-article) that would be like slapping your most valued customers in the face everyday. So, they had to come up with a model that works in the opposite way… Reward the best customers, retain the exposure to search (Google juice, Bing, Tweets), and use curiosity to drive sales. I think they’ve found a way to do this through their improved ‘freemium’ model (that Financial Times, FT.com, already uses btw). It sounds like, starting in 2011, they will allow a certain amount of “free reads” per month, then after X amount of articles read (likely 10) you’ll get a pop-up asking you to pay a one time fee for unlimited reading for the rest of the month. This allows the casual reader to get their fix and it rewards the valued customers (Super User) to pay a nominal one time fee and have the ability to read like mad.

The term super user derives from computer operating systems and is used to refer to a system administrator account. This means that they have all the access rights possible or needed. This model targets and rewards they’re best customers or super users by keeping prices low relative to the amount of content consumed. Fred Wilson intuitively called this, monetizing the audience, not the content. Newspapers have got to charge something to stay alive, but they are rewarding their super users by keeping the fee minimal and one time.

I personally hope this works well because my forward thinking self :) realizes that without a model that proves profitable, the quality of the news we receive will begin its inevitable decline. I like having quality journalism on a daily basis and would pay my nominal fee for it.

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In a semi unrelated note, I heard that Amazon can charge Kindle users a dollar to subscribe to my blogs RSS feed. They’ve monetize my FREE content. Is anyone paying for this blog (or any other) via Kindle? How do you feel about doing that? Love to hear your thoughts.

image via flickr


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  • Nice observation Ryan,

    Recently read VC and entrepreneur Fred Wilson's take on this. Would encourage you to check it out:
    http://www.avc.com/a_vc/2010/01/the-ny-times-fr...

    Enjoy your blog,

    Ryan
  • Agreed Ryan. Fred's thoughts are always valuable.

    Thanks for reading man.
  • mitchmclachlan
    Interesting take. Pete Cashmore disagrees with you:

    http://www.cnn.com/2010/TECH/01/21/cashmore.tim...

    In general, I agree with Cashmore's view that optimizing production is a better approach than finding ways to prop up bloated bottom lines.

    As for your Kindle aside, how do YOU feel about Amazon monetizing their distribution stream via your content?
  • still undecided about them monetizing what I put out for free...feels scammy
    at first glace but I'm unsure.
  • Great insight Ryan. It will definitely be interesting to see how well this is received by the public.
  • Thanks Marshall. I'm curious as well.
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