Update: New York Times' International Web Subscription Strategy

By: Steve Outing

The New York Times on the Web, as you may recall, is freely accessible by U.S. Internet users, but for those outside the U.S. there is a subscription charge. Now that the Times site has been running for several weeks, I checked in with Dan Donaghy, vice president of sales for the newspaper's Electronic Media Company, to see how the site is doing on the international front.

Thus far, about 1,400 international Internet users have signed up for the service, which offers 30 days free use before charges ensue. While initially offered at a 50 percent discount, the full-term price to be introduced in the coming months is $35 US per month. The newspaper has not begun charging anyone yet, but those 1,400 people from around the world have submitted their credit card numbers. Some of those intended subscribers could drop out when money is actually demanded of them.

Donaghy says that while the number is still tiny, it has exceeded his projections at the outset of the experiment. "I was bearish" about this from the beginning, he says. If by year-end the number of paying international Web site subscribers has climbed above 5,000, he'll be happy, he says. At that price point -- which Donaghy termed "pretty peppy" -- the Times does not need all that many subscribers to be happy about the bottom line.

Donaghy says that the overseas strategy is an experiment of the subscription model for online services -- and the international market is the best place to try something new, since Times executives know there is considerable demand for the Times' news content in countries where the printed newspaper is not available. He plans to study and identify the characteristics of those 1,400 people, then figure out ways to market the Web subscription service to more people like them.

Marketing the service outside the U.S. has not yet begun, which explains the low number of international subscribers, Donaghy says. He plans to begin marketing the Web site soon, by working with Internet service providers in other countries and placing ads in the International Herald Tribune.

In the U.S., the Times Web site is supported by advertising (with some premium surcharged services, like a personal news clipping agent and searchable archives, coming soon). So far, all of the site's advertisers have targeted only the U.S. domestic market. Donaghy says he's unlikely to go after advertising overseas and probably will stick to the subscription model.

Pricing is the real issue as to whether the Times can get substantial numbers of people outside the U.S. to sign up for the Web service. thirty-five dollars a month is more than "pretty peppy," and I suspect that the Times will reduce the price to a more reasonable figure before long. (Even the temporary discount to $17.50 US per month is much too high, in my view). Such a high price is particularly objectionable to international computer users when they know that U.S. Web viewers can log on to the site for free. If Americans had to pay a fee, even if considerably less, the Times' demand might be at least a little more palatable.

Frank Daniels III is movin' on

Frank Daniels III, a newspaper new media pioneer and CEO of NandO.net, the new media arm of McClatchy Newspapers, is leaving the company to pursue other interests. He will be chairman and CEO of a company he helped found, Koz Inc., a Greensboro, North Carolina, developer of Internet publishing tools (primarily database applications designed for publishers and community groups); he will teach a class at Duke University called "Communications Frontiers"; he is pursuing a consulting project; and he expects to write a book.

Daniels took over the helm of NandO.net when the Daniels-family-owned News & Observer in Raleigh, North Carolina, was sold to McClatchy last August and the NandO operation became the principal new media unit of the Sacramento-based newspaper chain. Daniels had been executive editor of the News & Observer and was the driving force behind integrating the Internet into the newsroom and launching one of the industry's first and most ambitious online operations.

"It has been a wonderful last six years of my life," Daniels said yesterday. "I cannot overstate how much fun I've had in both changing a newsroom and in helping launching NandO and the NandO Times."

Contact: Frank Daniels III, frank3@nando.net

Editor & Publisher buys Interactive Newspaper conference

Editor & Publisher (host to this column and publisher of the newspaper industry's premier trade magazine) has purchased the Interactive Newspapers business of The Kelsey Group of New Jersey. The most significant part of the deal is the Interactive Newspapers annual conference on interactive publishing. The most recent conference, in San Francisco last February, attracted around 625 attendees. Interactive Newspapers '97 will be held in Houston, Texas, on February 12-15.

Other assets of the deal, details of which were not disclosed, include annual research published by E&P and The Kelsey Group, various research reports, niche conferences, and certain relevant software.

Kelsey Group vice president Marsha Stoltman will join Editor & Publisher as a vice president and will run E&P's new conference division, according to E&P co-publisher Colin Phillips. The company is likely to host additional conferences in the future, under the leadership of Stoltman.

Previously, E&P had co-sponsored the Interactive Newspapers conferences with The Kelsey Group -- Kelsey running the conference sessions and E&P managing the exhibitions. E&P also is the primary co-sponsor of two international interactive media conferences, Interactive Publishing in Zurich, Switzerland, and Medio Interactivo in Santiago, Chile. The Chile conference will be in October 1996, followed in November by the Zurich conference.

"Our acquisition of the Interactive Newspapers conference and our launching of E&P Interactive will support newspapers to succeed in this competitive (interactive publishing) marketplace," Phillips said. "We think this is a big opportunity for us." The Members Network was also announced recently with the stated mission of pooling the best industry-specific resources and people into a single convenient cyberspace meeting ground.

Kelsey Group president John Kelsey says he sold the rights to the >Interactive Newspapers business in order to devote more of his company's resources to its directory and Yellow Pages consulting, conference and publishing business.

Contacts: Colin Phillips, colinp@mediainfo.com
Marsha Stoltman, MStoltman@aol.com

New media jobs outnumber traditional media positions in N.Y.

Here's a surprising statistic, reported by the New York Times earlier this week: There are more than 4,200 new media companies operating in metropolitan New York, employing in sum more workers in the city than traditional media industries like television, book publishing, or newspapers. This indication of the rapid growth of new media was contained in a study by the accounting firm of Coopers & Lybrand conducted on behalf of a New York state government agency.

NAA's best online newspaper awards

The Newspaper Association of America's (NAA) New Media Federation is soliciting nominations for its newly announced "Digital Edge Awards," which will honor the best online newspaper services. Results will be announced at the Connections '96 newspaper new media conference in Las Vegas on June 14-15, 1996.

The contest will feature awards in five categories: Best online newspaper (two awards, above 50,000 print circulation and below 50,000 circulation); best interactive feature (two awards); public service; new media pioneer; and outstanding achievement. Entrants do not have to be American newspapers.

Deadline for submissions is May 1. Nominations should be submitted to Melinda Gipson at mmgipson@aol.com, who requests that entries be very brief and include the category, URL/keyword/electronic address, and name/phone/fax/email/address of person(s) designated to accept an award.

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This column is written by Steve Outing and underwritten by Editor & Publisher magazine. Tips, letters and feedback can be sent to Steve at outings@netcom.com