'NYT' Meter Model More Likely to Affect Ad Rates

By: Jennifer Saba The New York Times decision to install a meter on its Web site come 2011 may have less to do with gaining subscription revenue and more to do with pushing up ad dollars.

While the Times has not disclosed too many details the general idea is to let people read a set amount of articles for free per month before hitting a pay wall. How many articles people can read for free remains to be seen but many have been speculating that it will be in the ballpark of 10 to 20. The Financial Times, which currently uses the meter model, allows consumers to read up to 10 articles for free before requiring payment via tiered subscriptions.

The Times is reaching for the best of both worlds: It doesn't want to lose readers and it wants to send a signal that its content is valuable. NYTimes.com is the top (newspaper site in the country by unique users and it is also among the top 5 most visited current events and global news sites (mostly).

As of November, the number of unique visitors to NYTimes.com was 16.6 million, according to Nielsen Online. But the more important metric to keep an eye on is how many times those visitors return during a given month. At NYTImes.com in November, the average session per person was four.

Since that number is just an average, some readers are hitting the site well above four times a month and they could likely be reading several articles in one clip. However, it sheds a little more light on the reading habits of NYTimes.com users.

As a comparison, CNN Digital Network had an average of seven sessions per user in November at 36 million uniques; MSNBC Digital Network had an average of five at 35 million uniques.

It's unlikely the Times is going to convert enough grazers to subscribers to realize serious revenue. Richard Kaplan, a partner who practices corporate M&A at the law firm Golenbock Eiseman Assor Bell & Peskoe, said that unless the content is truly unique a site is going to have a hard time finding people to pay. "I think people have generally found if users can get information somewhere without paying for it, they will do that."

What the Times can gain, as John Gapper pointed out in the Financial Times, is a trove of reader data. That data could be used as a lever to increase advertising revenue by upping rates.

"The more information you have about a qualified audience, the more you can charge for impressions," said Domenic Venuto managing director at Razorfish.

The Times is surely going to require a registration process -- for anyone who wants to go deeper than the home page -- that captures a fuller picture than currently. I remember signing up with the NYTimes more than a decade ago -- but the Times hasn't hit me up since for more current information.

"It really comes down to the demographics and the audience," said Shawn Riegsecker, CEO of Centro. "If through this effort it creates a more refined audience set, then they will be able to charge a premium in the market."

Of course the registration process itself is a deterrent. Mark Contreras, senior vice president at E.W. Scripps, told E&P that Scripps experimented with some of its sites that required readers to register after a certain number of page views. Even without affixing a price tag to anything he said the sites lost a lot of traffic. When they lifted the registration requirement, uniques soared more than 30%.

Contreras realizes the Times is playing in a different space than regional newspapers: "It's a rare and delightful bird and really a national publication."

Maybe in the case of the Times, more people will be willing to part with some information rather than their money.