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Let's not let Time Warner off the hook too easily on its semi-paid content experiment. Some of what EVP John Squires announced to the press last week made a lot of sense, some of it was purposefully vague, and some of it needs translation.
Let's get to the translation first. Squires said TW will start to experiment with paid content because there "was too much ad inventory online." Translation: "Yes, we have an ad network in-house (Platform A) but it is not able to provide the CPMs we're looking for. We're having a hard time finding advertisers who will pay a reasonable amount of money beyond the home pages and story starts for most of our brands."
The next Squires comment that needs to be translated is this: “There is nothing specific to point to now but you can expect some experiments within six to eight months. We’re also looking closely at devices and applications and pricing and business models associated with those.” Translation: "We will give Amazon an exclusive on several titles if they will guarantee promotion of those titles and ensure that they're subscription-based. And we will not share ad revenue."
Left purposefully vague was the actual business model that TW will tinker with. Its competitors have mixed paid content with free content, with varying degrees of success. Let's not forget The New York Times ended its partially-paid experiment by allowing American Express to present the paid content as free. American Express got to be an advertiser and a hero. So imagine if Time.com presented the week's news for free and made users pay for Mark Halprin, and other columnists. Would it work? Would it be a sponsorship opportunity?
Also left purposefully vague was the publishing platform. More than a few TW magazines have been rumored to be headed for online only. If Squires can pull off a deal with Amazon to publish titles on Kindle like Entertainment Weekly, Fortune, and some of the luxury titles like Southern Living, he's a hero. He will have found a strategy to get readers to pay for content. Every publishing company will have to reckon with this by the end of this year. Note that Squires said "six to eight months." That's when the books on 2009 will become painfully bleak.