The internet and social technology has turned the publishing industry upside down and inside out. We’ve seen 24 of the top 25 newspapers go out of business. Magazine subscription rates are down and the leaders within the industry are struggling to find a strategy to stay alive.
The Wall Street Journal is forging a war against the internet. Rupert Murdock wants to block its content from Google and has taken a stand with its readers by charging a subscription for the paper. No more free in the Murdock world.
Other publications are trying to combine free with subscriptions and advertisements. However even that model won’t generate what these organizations have been used to and need to generate to cover overhead.
The Internet Forces Publishers to Innovate
Clay Shirky writes in an article on McKinsey Quarterly “ People will pay for content if it is necessary, irreplaceable, and unshareable. Businesses excited about the first five words of that sentence don’t understand how constraining the next seven are.”
“First, most content isn’t necessary. It’s optional. Traffic to the New York Times’s editorials fell precipitously during the days of their subscription service, TimesSelect. People wanted to read Paul Krugman and David Brooks, but they didn’t need to. Second, replaceability is in the eye of the beholder. Your coverage of the bailout may have different words than the competition’s does, but for the average reader, their reporting can be substituted for yours, and vice versa. Third, people like sharing—and dislike not sharing—but getting people to pay for content requires forbidding us from forwarding things we care about to family and friends.”
“In an analog world, per-copy pricing is a strategy for increasing the number of available copies. In a digital world, per-copy pricing is a strategy for decreasing the number of available copies. Pay wall revenues thus reduce audiences and ad revenues, while creating a competitive advantage for (and an audience exodus to) subsidized outlets—whether the subsidy comes from advertisers or users.”
Trying to manage old models when the market has shifted is like driving a Model T in a Nascar race, you won’t have a chance.
Content is only as valuable as the audience who consumes it. Some audiences, and they are getting smaller, will pay for what they consider as “premium information from talented writers”. Then there is a larger audience that finds valuable content for free and the authors pull audiences to their content based on style and substance, whether professional journalist of not.
There are several dynamic forces that are changing old models and forcing development of new models. On-line and off-line advertising methods are proving ineffective. Content is as free on-line as is having conversations off-line. The issue becomes what innovation will create revenue from content?
If the premise of content is to gain attention, attraction, affinity and an audience then the only way to monetize content is to create some form of transaction. Transactions come in different forms but the publishing business has relied on subscriptions and advertising as the primary form of economic transactions for their work.
Since content is an influence over an audience maybe a new model could be designed which monetizes information, influence, ideas, talent and conversations. The actions taken by an audience as a result of content that is in context to their wants and needs creates value for a marketplace of consumption. The value of content consumption has yet been quantified, qualified or defined. Instead of wasting time, energy and brain cells trying to create a “bridge” from the old to the new why don’t leaders spend their “social capital” on innovation that creates a new model of consumption.
I don’t yet know what it would look like but I am sure there are creative people in the audience who could create it. Get it?