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?