The TimesSelect pay wall has officially been torn down. Does this mean newspapers should forget about paid content? Yes, if they want be part of the “conversation” and participate in the web’s link-based ecosystem and economy.

Mark Potts makes a strong argument for why newspapers shouldn’t give up on the paid content model, but it belies the principal reason why they should:

But the delight about the end of TimesSelect is misplaced. While the “content needs to be free” crowd hails it as a victory, the fact is that TimesSelect was the right idea, badly executed. Simply put, the Times put the wrong content behind its $49.95 pay wall. Columnists and opinion? At a time when the blogosphere is all about debating the very issues those columnists wrote about? Cutting Frank Rich and Maureen Dowd et al out of the conversation just wasn’t very smart. And the syndication of those columnists made the Times’ decision to restrict access even more ridiculous—the only place you couldn’t get them for free was the Times site itself. Oops!

TimesSelect could have been so much more. It could have been a high-end subscription service for in-depth coverage that wasn’t otherwise available, for supplemental reporting and blogs and Web-only content in specific vertical topics that would have been valuable to the Times’ core audience, and worth 50 bucks a year. As it was, the Times’ decision to include almost unlimited access to its archives in TimesSelect was a smart move all by itself. Surely a broader, deeper for-pay product could have been built around that core. Alas, we may never know.

Mark is right that cutting off Frank Rich and Maureen Dowd from the conversation didn’t make sense, but cutting off “in-depth coverage” and “supplemental reporting” from the web’s link ecosystem doesn’t make sense either.

When the New York Times publishes unique, high-quality content, and when that content is free and open, it typically gets many links from blogs and other sites that refer traffic via those links. So, being free, that content reaches beyond the more limited TimesSelect audience, not only to regular readers of the Times who weren’t TimesSelect subscribers, but also to a broader audiences that reads the Times “opportunistically,” i.e. only when referred.

Which gets to the other key benefit, which overshadows these traffic referrals in the short-term — search.

When Times content is free and open and LINKED, it gets A LOT of search traffic. But not just in the short-term — search is FOREVER — or rather as long as that content continues to rank for keywords with any search volume, which in many cases is a gift that keeps on giving.

Newspapers — and all original content producers — need to think about the “lifetime value” of their content when monetized through fees vs. when monetized through advertising. Only a finite number of paid subscribers will ever realize the value of content at the time it is published and in the archive. But through search, the potential audience for that content, to be monetized through advertising, is many (MANY) times greater.

The New York Times understands this, which contributed to the decision to tear down the pay. This is from the NYT press release:

Since TimesSelect was launched in 2005, changes in the way people find news and opinion on the Web have altered the online landscape. Because of online users’ growing reliance on search in order to navigate the Web, NYTimes.com expects to see a substantially increased number of unique users referred to and accessing the site once the pay wall is gone. Due to this anticipated growth in traffic, the TimesSelect subscription revenue model will be replaced by one that is based on advertising.

“TimesSelect brought new commentary and voices to the site, as well as an influx of subscription revenue. But the increasing dominance of search and other forms of referral have changed the equation. Allowing unfettered, free access to our opinion content and recent archives should enable us to drive readership and advertising.”

Here’s NYT CEO Janet Robinson from her presentation at the Newspaper Association of America 2007 Mid-Year Review:

Currently the Times Company is the 11th largest audience aggregator on the Web, with 43.8 million visitors in May, up 11 percent from May of 2006. We expect to grow this audience through continued application of search engine optimization to expose our world-class content to search engines and other forms of Internet distribution, as well as new products.

The TimesSelect experiment notwithstanding, the New York Times is one of the savviest newspapers — and one of the savviest content sites generally — when it comes to realizing the value of premium content by opening it up to the web’s link-based economy. They have come to the realization that the web has fundamentally changed the economics of content.

Other newspapers and content producers would be wise to follow their lead.