Adam Penenberg writes in his Wired story, Searching for The New York Times, that there is a very real financial incentive for the NYT web site to continue to hide it’s stories behind a subscription wall. A $20 million/year all-you-can-eat royalty agreement with Lexis-Nexis is an awfully hard arrangement to tear up. John Battelle noodles on this idea a bit more and ponders when the attraction of differentiated revenue from individuals, finding stories on their own via Google and other search engines, will outweigh the guaranteed revenue stream from L-N. He also adds:
What revenue stream accounts for the lion’s share of search’s margin? Advertising. That’s a one legged stool ready to tip over. As the search giants become more and more media companies, they must develop subscription services, and because users won’t want to pay for something they already believe is free (searching) search engines will have to figure out a way to become middlemen to paid content. After all, they own distribution, so they should become…distributors. Were they to execute this service in a scaled and elegant fashion, it might be viewed as a benefit – in many cases, subscribers will get more content for less than they were paying in the past (that’s the benefit of volume).
Google as a portal to premium content? Haven’t we been there before? One comment to John’s post points out that this has been AOL’s model for the past 10 years. Yahoo has continually tried to push premium services and could easily bundle in targeted content. Northern Light also blazed this trail but flamed out after a failure to bring together enough content.
There are many ways to get to content and Google is the current flavor of the month. Of greater demand is having a single account that aggregates access fees to each site for a reasonable monthly fee. Why pay nytimes.com and wsj.com separately when you’d rather pay a single bill for unfettered access to these sites and more? Yes, Google has the distribution network but PayPal or American Express might be a better player for a unified subscription account. After setting up unified subscription fees, the next step is working with each of the major content vendors on feeding RSS feeds of their content to the major search engine vendors so that their content begins to move up in the rankings. Portions of the proceeds of the subscription fees could then go to each of the search engine vendors, paid out as a proportion of the amount of traffic they drive to the payment vendor for signup. $40/month sounds about right – we’ll call it a “global media press pass.”
UPDATE: Cory cuts to the chase on boingboing.net
The NYT’s registration system and expiring pages have doomed them to google-obscurity. Wired News argues that they’ve gone from being the paper of record to a Web-era irrelevancy, and all to protect a Lexis-Nexis agreement and to bring in two to three percent of the digital division’s profits.