The Importance of Content

This morning, as I had both the New York Times and Drudge Report up on my lap top, I read of the declining financial situation at the NYT, particularly as related to advertising --

• Ad revenue at the News Group (of which the NYT is part) fell 15% during the fourth quarter, versus a year prior and total Q4 revenue was down 11.5%

As an avid NYT reader (mind you, lap top and iPhone app only), this led me to dive deeper into the still-ambiguous proposal for a move to a paid subscription model, beginning in 2011 --

• Plan is to allow free access to a set number of articles per month and then, after this, charge a flat fee for unlimited use (both fee and article limit still TBD)
• Goal is to target small number of hardcore users, who comprise majority of site traffic

In my mind, this raises a set of immediate issues -- what about the readers who stay away because they are now unclear on what the stipulations are and don't want to deal with the hassle? How will this roll out across mediums -- e-readers, mobile applications, etc? And, finally what does such a model say about failing to work at monetizing the long tail of consumers who are more infrequent/sporadic users?

Essentially - this raises the interesting issue of content. It feels like a big opportunity - to apply an analytically rigorous approach to content itself --with a lot of unexplored territory, particularly when compared to how well monetized the advertising space has become. In my opinion, one of the biggest challenges today with content is in navigating the seemingly infinite amount of information available (particularly as we, consumers, have such limited time) while also managing to find and consume legitimate, quality material.

So, as it pertains to the NYT, it feels like their model will be making a mistake in not working to monetize the "long tail." A balance needs to be figured out that considers the continued monetization of online content, versus a one-time monetization that is feasible with offline content. Essentially, this would mean that years of cash flows from a source of content that could continue to be visited, while smaller on a one-time basis, may end up being bigger in aggregate than offline content that may only be visited once. Consider this - Associated Content has claimed that content monetized 5 years ago actually is making more money online today than when it was first published 5 years ago. Following this logic - would you rather have 100 million articles making 10 cents each ($10m total) or 1 million articles each generating $1 each ($1m total). In my mind then, it is definitely important to continue to value this long tail of consumers and to figure out a way to monetize them -- rather than only focusing on a sole group of consumers.

As a final note, particularly in light of the wave of big social networking/media news of the week (Buzz, Aadvark etc), I feel very strongly about finding a way to keep the "long tail" in the loop, as it pertains to their ability to enjoy quality, legitimate news sources. I think, as a society, we need to continue making the consumption of legitimate reading/news/opinions/thoughts (a la the NYT) available to the masses (and not just a small core of readers) -- and so paying attention to quality content and the monetization of quality content is a big and important step in this process.