The New York Post reports that the New York Times will finally unplug TimesSelect, its online paid subscription service. As we noted last month, we believe this is the right move: We think the paper can recoup the $11 million in lost subscription revenue through advertising and improved visibility, and after subscription growth stalled around 220,000, it was clear TimesSelect would never become a major business.
This move confirms just how hard it is for news organisations to generate subscription revenue online: If the Times can’t do it, almost no one can (the one modest success story, the Wall Street Journal, will presumably be next to throw in the towel). The failure of TimesSelect is also yet more proof that newspapers will have to fundamentally restructure their businesses as the world migrates online. The revenue-per-reader the companies can generate online is only a fraction of what they can generate in print, and the online businesses simply won’t support the same cost structure.