[Continuing the debate on Rick Jamison’s Listening Post blog:]
I don’t think any of us are predicting the death of print, just its decline, which means an old business model needs to be retooled. What we’re witnessing is the acendancy of digital communications, for which a new business model needs to be created.
Print pubs have always been supported by advertising, which is exploding online–and shortly on portable devices, where Google, Microsoft and others are placing multi-billion dollar bets. Part of the problem print is having is ad dollars moving online. But to Lou’s point the old push ad model–paid, one-way promotional communication–is dying in the world of Web 2.0.
Online the interrupt-driven model–basically passive consumption of packaged content–is being replaced by conversation, connections and shared perceptions. Vendors have lost control of their corporate images to the blogosphere, not to mention Google. To Karen’s point, it’s no wonder that companies are spending a lot less now on branding and hiring “community managers” like Brian.
Ads will continue to work in the B:C space, where demand creation is the order of the day–buy Snuggies, ZhuZhu Pets or some other junk that you didn’t know you needed. In the B:B space–electronics at least–you can spend $5K on a full page print ad telling engineers about your low-power CPLD, but unless they’re in the market for one in the near future, your money is largely wasted.
When they are in the market, engineers will Google what they need and your product will show up along with those of all your competitors. Then they’ll read articles about it in tech trade magazines or sites, check blog conversations, download the datasheet and finally make a decision, on which your expensive ad six months earlier had little impact. Better to spread your ad spend over several months on well targeted, relatively inexpensive online ads and manage the resulting online discussions as best you can.
The Music Industry Model
I don’t think the music industry model works in our space, Yvette. The music industry moguls saw their physical media sales being killed off by online sales and piracy. First they turned their lawyers loose to try to stanch the piracy. Then they had to find a way to sell online. Apple supplied the outlet with iTunes.
iTunes isn’t a publisher but a distributor, and a dominant one. People are willing to pay their prices because (1) they’re reasonably cheap and (2) to date they haven’t really had an alternative. iTunes will have serious competition shortly, and their nice little monopoly profits will take a serious hit.
Apple has a great scam going with iTunes, whose downloads only work on Apple products. iTunes is a great way to sell iPods and provide the content they needed to hit critical mass, which in turn sells more iPods. Vendors may see a bright idea here for themselves, but I don’t see any lessons for bloggers or online journalists.
Since ads won’t pay the bills, many of us look to corporate sponsors to help do so–in the case of Low-Power Design, Mentor Graphics and Silicon Labs have stepped up to the bat, just as Synopsys, ARM, Mentor and others support John Blyler’s and Ed Sperling’s sites. Lou refers to such companies as “patrons of journalism,” which is how I think of them, too.
Ry Schwark at Mentor was clear that Mentor recognizes that tech journalism is going through a turbulent change and Mentor would like to help support tech journalists who have something to contribute. Hopefully they’ll generate active communities with which Mentor would like to be associated. I think this is quite forward looking and makes them a good corporate citizen.
Does that mean that I’ll always give Mentor a glowing write up? Absolutely not. If they come out with a product that’s not ready for prime time, I’ll say so–though perhaps nicely. I’ll leave it to John Cooley to slap ‘em around.
The Wall Street Journal can get away with this, since most of their subscribers expense it anyway. The New York Times tried it and quickly backed off. There’s no way I can see that most blogs and online mags can charge for content, though some do charge monthly subscription fees. We’re not producing songs that people will pay to download. We’re writing up events and packaging them with opinions that readers are very unlikely to pay to read. Sorry about that.
Instead of a pay wall, the Financial Times has launched metered access, where you can read so much before having to pay. According to Journalism Online, “more than 1,300 publishers have partnered with the company, and the first tests of the paid content network will start in coming weeks. In almost all cases, publishers will start by giving visitors access to 10 or 15 articles for free before asking them to pay. The idea is that frequent visitors to a site are demonstrating they value a brand’s content and are the ones most likely to pay a fee for unfettered use of the site.”
It’s hard to see how any but the big dogs can get away with this, but I could be wrong. It looks to be a viable model if you have sufficiently compelling content.
Content Aggregators and Evil Publishers
Personally I think the HuffPost is the future of journalism. It started as a blog with only aggregated content (photo, teaser paragraph and a link). Now they have a legion of unpaid bloggers who write some excellent stuff–including secretaries of state, ex-presidents and foreign heads of state. They’re a combination of fresh and aggregated editorial. According to Forbes, the HuffPost is profitable–from ads–and making so much money that they’re thinking of an IPO. If you get enough eyeballs, the money will follow. But try to do it without the sleazy photos, please.
Charging to link is Rupert Murdoch’s latest brainstorm. If you want to link to a story in one of his outlets, it’s going to cost you. If this flies bloggers will obviously stop linking to stories in Murdoch papers; it it catches on widely, we’re all going to be in trouble.
Charging to link is a dagger aimed at the heart of the Internet, which is all about the free exchange of information and opinions, which in turn is made possible by links. Murdoch sees this strategy as aimed a content aggregators, whom he considers thieves. Personally I think the whole idea is evil, but it may make business sense if it doesn’t generate huge blowback, which I clearly hope it does. Just don’t try this at home, kids.
Still, the days of free content are numbered. If you have compelling content, you may be able to charge for it, and conversely. I predict that a limited number of outstanding sites will make money from content, while the rest will make do with ads and pray for enlightened sponsors.