MGP2006 alum Jon Garfunkel has completed an eight-part, 21,000-word study about charging for content on the web. Garfunkel, a Boston-based software engineer and Princeton University grad, studied available public audience-traffic data for the New York Times website during the period when access to its columnists and archives were behind a "TimesSelect" paywall.
His report is dense and its difficult to draw hard conclusions from it. But in an interview, Garfunkel makes one key assertion: He says the influence of Times columnists, as measured by they amount they were referenced in blogs, dropped only about 20% during the period their material was "behind the wall."
In general, Garfunkel believes news organizations may be making a mistake by relying solely on advertising. But he nuances that. "The answer is not in charging for content, it is in charging for service," he says. "It seems there should be options in service or avoiding advertisements."
He goes on in an interview: "I found it disheartening that so many commentators like Jeff Jarvis were willing to go to 100% advertising supported. But if you read Neal Postman and any other media commentator going back decades, you wouldn't find anyone seriously trusting the credibility of 100 percent ad supported content." Garfunkel's self-published study is on his website:
"There is a solution for newspapers to charge money to readers who want to pay money for a premium service of news," Garfunkel concludes. "I don't know if it's a viable market, but I have discussed in some more depth in this series and feel it should considered as well."
Garfunkel says The Times reported it pulled in about $10 million from subscriptions to TimesSelect. By comparison, he says, Fox News channel realizes $850 million a year in carriage fees from cable systems. "I think the economics of this bears further consideration by people who care about the future of news," says Garfunkel in an email report of his findings.
Garfunkel notes he did not have access to NYT's internal data. "The only person I spoke to at the Times was Marshall Simmonds, mostly to clarify some public facts," he says.
His key findings, he says:
-- During his study period (with TimesSelect in place) tThe seven regular Times Op-Ed saw their references in the blogs go up 8 times. A non-representative sampleset of pundits saw increases of 10 times -- a 20% drop-off.
-- Nielsen/NetRatings data for the period TimesSelect was in place, posted by Jon Dube at cyberjournalist.net, show an aggregate 27% increase in NYT traffic. Garfunkel says this traffic growth exceeds the growth during the same period at comparable, competing websites.
-- The paywall was not the reason that the Times archives did not show up in a Google Web search over the last two years. It was already indexed by Google News. Why it did not show up in the web search, was an application of Google's unofficial policy (as reported by Danny Sullivan) to favor non-subscription content.
FULL DISCLOSURE: The author of this post is a shareholder in Clickshare Service Corp., which has developed a patented system for charging for content on the web.