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Wednesday, February 3, 2010
The Way Out For Publishers, Part 1 of 2
by Jaffer Ali
The debate rages on between two content camps. In one
corner is "free content", the monetization of which
requires the development of ever more invasive advertising
methodologies. And when that fails? Why, simply add more
of what doesn't work, of course.
In the other corner is "paid content", led notoriously by
Steve Brill and Rupert Murdoch. This camp seeks to super-
impose a cable television model onto the Internet.
Both camps are locked in a psychological version of
Maslow's oft repeated slogan, "To the carpenter, all
problems can be solved with a hammer." And meanwhile, as
the two camps fiddle their own tunes, Rome is burning.
But before we get to a workable solution for what ails our
media ecosystem, let's briefly recap why neither camp's
solutions work.
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Traditional Advertising Subsidy of Content Camp
We are in an advertising free fall. Trust between
advertiser and audience has been broken. Advertisers do
not respect audiences, and in fact, only treat them as
customers. In a perverted rush to consummate sales right
now, they have alienated audiences as never before.
This spreadsheet-driven, transaction-obsessed mentality
has seen click rates plummet to an industry average of
less than .1%. That's fewer than one-per-thousand (other-
wise known as statistical zero.)
To counter the withering click rate, "clever" folks are
doing three things:
1) Redefining performance with the latest, greatest metric
du jour...
2) Adding more and more ads resulting in more and more
clutter and more and more of what doesn't work...
3) Violating the audience's privacy through desperate and
disingenuous attempts to target behavior.
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In my opinion, these three pseudo solutions can only ensure
a continued slide for online publishers.
The Paid Content Camp
When I started out in the home video business, music
distributors treated home videos like records. Book
distributors treated videos like books. And periodical
distributors treated home video cassettes like periodicals
(before DVDs there were these things called VHS and Beta
cassettes!).
They were all wrong of course. Home video had its own
personality and its own set of rules.
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And now Messrs. Brill, Murdoch et al want to treat the
online landscape like cable. But the Internet has different
rules than cable, and the paid content camp is ignoring
some fundamental economic issues. The consumer is tapped
out. Real unemployment is over 16%. One only need look at
the declining fortunes of premium cable channels to under-
stand that new economic realities require new thinking.
Shifting the economic burden directly to fatigued consumers
will not work. In fact, it will soon be a case of "much ado
about nothing", because the moment what now masquerades for
news goes behind a firewall, a new industry will emerge
that will rewrite news stories utilizing the facts. Facts
cannot be copyrighted and this information will be free to
the public.
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Questions? Comments? Email me at: quote (at) Quotes2u.com
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