We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
Our Recent Essays Behind the Front Page
Wednesday, August 29. 2012
There is a slow, deliberate change taking place on the internet. Not all that long ago, most digital publishers offered 'free' content, focusing on the sale of ads. This model is not a good revenue generator for the majority of websites. Several years ago, the Wall Street Journal switched to a paid model, and the New York Times also has a pay wall, one which is somewhat porous. Many of the digerati feel all content on the internet can, or should be, 'free'.
The Economist is a publishing outfit which has spent much time analyzing this market and how to approach it. I have read The Economist for years and I respect their views and analysis. They recently moved to the subscriber model, as well.
Technically, most publishers are not 'free', since they use advertising to cover their costs of business. But there's a cost to you, the reader, with advertising. It's a subtle cost, one which impacts the amount of readable material and sometimes even the editorial content. The alternative, a subscriber model, is something internet users rarely encounter. For some reason, people are comfortable subscribing to magazines, newspapers, and even cable TV. Radio remains one of the few 'free' media, and even that is changing as XM/Sirius slowly becomes popular (it was included as a 'free' trial for a year with our new car). However, on the internet, it's not uncommon to hear people ask for 'free' access.
Should news and information remain 'free', and, if not, why would anyone be upset if it isn't? Many of my friends who work in the media industry have lamented the move to subscriber models. I point out a simple fact. If they were willing to pay for the paper or magazine, why wouldn't they be willing to pay for the online version? Is there some difference in the delivery system that eliminated costs?
There are very few online sources which employ journalists, or any kind of massive infrastructure (such as Maggie's), and have the ability to survive simply on revenue from advertising. In fact, most subscriber based media leverage a subscriber base to 'qualify' their audience to advertisers, to create multiple revenue streams. Forbes magazine, for example, has a wildly different subscriber base than People. It is that very difference which allows Forbes to cultivate their advertisers. Information collected in the subscription process is utilized to improve the value of the advertising. Multiple revenue streams are a sign of healthy business.
Some forms of digital information or entertainment simply don't conform to a pure advertising model.
Examples would be children's programming (even though I work in media, I spent over 5 years in children's entertainment and the advertising model has become questionable with the 'social awareness' regarding kids' programming, as many companies have become wary of advertising to children), news, and opinion.
There are various reasons for this. First is scale. Scale is probably the biggest reason any website fails at advertising. Any site with fewer than 1.5 million unique visitors each month is unlikely to survive very long on a strict ad model. This tends to afflict opinion sites, primarily because unless you are a known entity (George Will for example), you aren't likely to have a large enough audience to provide advertisers reach into the broader audience they seek. Most opinion providers require distribution under a larger banner such as the New York Times or WSJ. Scale is one reason Arianna Huffington utilized 'free' journalists to build the Huffington Post. By keeping her costs down, she could leverage smaller scale and grow organically.
Another is editorial freedom. It's hard for any news or opinion to remain untouched by the hand of advertisers. If we expect some degree of fairness and honesty from our commentators and journalists, we have to hope they are not completely tied into their advertising revenue. In this sense, having the subscriber model makes for better content. It certainly would do nobody any good if the news buried the "Pink Slime" story because the firm which made it was their largest advertiser. Of course, there's the flip side, where news outlets deliberately attack their advertisers for no apparent reason. Airlines approach editorial management in a unique fashion. Usually, they request their ads be pulled down when crashes occur.
Finally, there is the issue of context. Some publishers have no scruples and will put whatever they can make money from up on the screen. Legitimate publishers will differentiate between real news reporting and paid stories, but some may not. If publishers were to rely only on paid stories, it wouldn't be long before every major news site's pages were full of PR pieces from providers of manufactured goods and services. This arrangement occurs more frequently than most people realize, though usually it is flagged somehow to inform readers the piece is a paid insertion.
I believe most of Maggie's readers support companies earning revenue in whatever fashion the market can support, whether it's via advertising, subscription, or both. Most of us probably have no problems subscribing to our favorite news outlets. But the early years of the internet only served to support and further develop a culture of information moochers which the industry is now dealing with. It's hard to convince people that they are not entitled to 'free stuff' once they've had it for so long. Information, despite claims that it should be 'free', is never free. There is a cost to collecting it, a cost to transmitting it, and a cost to you for receiving it (though sometimes that cost is only time).
Display comments as (Linear | Threaded)
Of course you're right. There is work effort going into the production of a set of information, opinion, or whatever. The creators of the work product deserve a return for their effort. Free ice cream is only free if the producers volunteer it. If they overcharge, we leave. Simple.
I am willing to pay for news but not for opinion and bias that masquerade as news, which is why I do not subscribe to any print newspaper these days. I am willing to pay a premium for good news writing but not one cent more for the crap that most journalism school graduates turn out these days. I subscribe to no journals or magazines. Junk is junk. I pay for cable TV only because my home owners association took a vote to require it (that's democracy in its purest form) and my wife insists on it since over the air reception is nonexistent where we live (Okay, how else would I get to watch Around the Horn on ESPN?). I do not listen to radio. There's nothing work listening to on the local stations. It's all junk, all the time. Life is short. I will not waste it on the electronic and print garbage that our society produces by the megaton.
Technically, all news is opinion of some form. The question is just whether you can parse the opinion and get to the main points.
Some journalists are better at providing opinion in a less biased fashion, or at least a balanced manner with offsetting viewpoints. Most are not.
I agree, most journalists today are not very good at what they do. When I was taking classes in journalism in the early '80's, we were taught to provide balance. This is no longer valued at any news organization.
I assume you like Maggie's because you're not paying for the opinion(s) we present?
By the way, I'm teaching a course in my company on the history of media. The reason cable exists is because over the air reception was unavailable in Mahanoy City, PA and John Walson viewed it as a good way to sell his TV sets. The subscribers loved it because they couldn't get reception. Its history is a classic case of Say's Law being borne out to its logical conclusion. Basically, supply creates its own demand.
Personally, my interest in the internet is to discover interesting articles and pass them on to my mates (kinda like Maggy's "Morning Links") or to include a "See also" link in my commentary to expand or explain what I wrote. I do not much bother with, nor link to, articles behind "walls" because I do not want to inconvenience the reader.
Agreed. Reading long pieces on a monitor is unpleasant (a cost). The trade-off is the ability to blockquote and link to supporting content (a benefit).
The problem you're faced with, in the long run, is whether or not your links move behind a wall, and well they might.
The "Morning Links" could, in all probability, become a series of links blocked by walls at some point.
Eventually, only sites which have opinions to share (such as Maggie's) may be free to any great extent. Larger publishing houses will continue to offer a portion of their content for 'free' as an incentive to inspire others to join and get premium content.
Once you get past the niche readers, enough to support a subscription basis, of a very few periodicals (Wall Street Journal, for example), virtualy no one will pay for other web subscriptions. The primary reason, after thriftiness, is that there are too many of them and the relatively rare quality is spread across too many of them to make any one worth the cost to subscribe and to subscribe to many would be prohibitively costly.
In other words, garbage out, don't expect money in.
Only a very few websites break even, not to mention make any money, as they have large dedicated readerships. All others exist for their sponsor's enjoyment and at his or her's expense.
Long story short, no one should expect, even in their dreams, that subscription web will flower.
newspapers in the past relied on paid advertising/messaging/notices for about 3/4 of their revenue, and subscriptions/purchases for about 1/4. The news organization was only to provide content and credibility to transmit the ads. The newspaper/magazine subscriber could ignore ads which were not of interest.
TV does not have the costs of newspaper/magazine printing and distribution, so advertising revenue was more than enough for TV to thrive. But the drive to extract revenue from subscribers is very strong, and we now have high, monopolistic cable fees and pay-per-view to the extent people tolerate it.
Much of the financial difficulty of the press is self-inflicted. Distribution costs are minimal (less than broadcast) on the net, so newspapers, with inertia, content and trained staff could have developed a Google/EBAY/Craigslist national model, which would be more than lucrative. But the press refused in order to protect their print distribution franchise. The extreme top-down collectivist bias of the press also contributes to its decline, by offending potential customers enough to cause large circulation reduction, and therefor further reduced ad revenue.
A major goal of the media is now propaganda. This purpose is defeated to the extent it becomes necessary to put the propaganda behind a paywall for those who are already mesmerized by and agree with the propaganda to pay for it. For example, if the NYT is entirely behind a steep paywall, accessible only to those willing to pay steep fees to read its version, it will lose relevance and influence.
Even major newspapers no longer have their own reporters outside DC and their hometowns. there is more raw data and information on utube and twitter than collected by professional news staff. There will be enough aspiring writers, interest groups, and talent to keep the free web thriving.
Particularly if we simply don't subscribe. just say "no".
Some of what you wrote is correct. But the costs of TV are actually extremely high and always have been. The costs, due to the need to get more premium content, are rising again dramatically. The very best stuff is getting harder to find, and more expensive to produce.
That's why 'reality TV' took off - it was an attempt to derive value from 'stuff'. Cheap to produce, and capable of driving interest for a period of time, generating high margins.
There are more than enough aspiring writers and interest groups to keep the free portion alive, but how will they make money? This is the very real problem media organizations are starting to face.
A great question was posed to a panel recently. "What is premium content?"
There were many answers. You can choose the one which suits you - or mix and match to whatever degree seems logical, but here are a few:
1. whatever large numbers of people look at is premium. The more they look, the more premium it is. (I would say that's only partially true. Youtube is full of stuff people look at that isn't 'premium'.)
2. high quality production of desirable material
3. specific material designed for a specific audience
4. anything you put on (the 'George Costanza' view)
I won't even pretend to define the concept, but truth is the best stuff wins every time. And usually the best stuff is expensive to get and provide.
I'll disagree with Bruce in that the subscription web won't flower. It already is flowering. The question is to what degree and who benefits from it?
Bulldog, TV costs are unnecessarily high - enormous payments to "stars", executives, etc. Very talented actors in other countries don't get such gigantic payments. Sport entertainers such as football, basketball and baseball are also "expensive", for similar reasons. Why is a baseball player worth hundreds of millions of dollars, when teachers and doctors and nurses are being crunched? It won't last. This entertainment money can support many more performers/entertainers/content providers on reasonable income.
The top-down "star" system started in Hollywood still permeates the entertainment distribution system, but is fortunately being weakened by technology. For every "star", there are hundreds of equally-or-more talented (but less lucky or less related or connected) people. For what the "stars" and their distributors take, these hundreds can make good-enough money.
Technology will increasingly fragment the "star" system, which for now still forces us masses to all be entertained by the same "star" talent we would not select ourselves if given choices. The book publishing oligopoly is breaking down. The "star" system is next.
High Quality" product is not the necessary result of high-priced "stars". There is a large amount of high quality content potentially available for distribution. Music performances, theater performances in national and regional centers, bands which can now cheaply produce their own performances without a record label, etc, etc. It can and will be collected and delivered at competitive cost, unless the content distributers can get laws passed to prevent it. Hollywood owns the best politicians money can buy, so this may be the outcome. but it may not....
Define "unnecessarily", and maybe it's a discussion worth having.
If you mean "high because they pay what the market will bear, and spending can support", then it's hard to agree with that term.
The "star" system may be under pressure, and it is because of technology, but it's only shifting the price pressure, not changing it. The utilization of more special effects and animation has caused the stars some distress about fair use of their images. However, voice overs are starting to command premiums, as are technologists in the fields of animation and special effects. The only thing that may change is the 'who' of who is getting the money, not the 'how much'.
Premium content or high quality may or may not have to do with stars. You'll have a hard time telling a sports team that a high-performing star isn't worth having in order to be competitive or fill the seats. And they are willing to pay for those stars. The same is true with entertainment.
I once spent several years in sales at a news organization, and there were no 'stars' in the anchor seats. The management proposed a 'star driven' approach to delivering the news. I had to do the ROI for it. It was abysmal, but it was a path which management followed. They got out of that business as soon as the contracts were up, mainly because I'm certain they learned through experience (rather than my ROI analysis) that some things can't be star-driven.
But many people still tune in to CBS for Charlie Rose in the morning, or ABC for George Stephanopolous. I don't know why - but at a very high level, there is a certain 'star quality' which attracts viewers. In the long run, it's the quality of the information they deliver which is important, but you can drive interest with 'star quality' in certain circumstances.
I disagree with the premise this will change any time soon. I don't think it will ever change at all, unless the politicians pass laws to plunder money from their friends in Hollywood (as they eventually will because it will be the only money-center left if Obama keeps going). It's always been the case that stars are overpaid. I don't see this ever changing.
And looking at other nations and saying 'they don't do it this way, so that's better' or even 'it can work, because they do it another way' is misguided. Those are different markets which value different things than we do. Very talented actors in France usually try to get a few films here in the US to make their money, or find out they don't have what it takes to really make it big. One of my recent favorites in this category is Javier Bardem, who did quite well for himself with "No Country for Old Men" and has started to write his own ticket. I'm sure there are many other talented actors getting by in Spain, but none were able to make the big step he did.
One of my favorite short stories about the star system was by Ayn Rand, who spent time doing screenwriting in Hollywood and had a particular disdain for stars and the mediocrity they present on the screen. "Her Second Career" details some of the problems of the star system, but the story details the reasons why it will continue for quite some time.
We subscribe to the WSJ because we want to read it constantly. There aren't any other sites I'm so determined to see that I'll pay an annual fee. If I hit a paywall, I just go read something else. A site has to offer something pretty special to warrant charging a fee.
Yeah, Texan99, I agree. I visit about 4 sites every day (including Maggie's) for which I would be willing to pay a small fee.
I enjoy all the places I visit, but very few are worth paying for in relation to the time spent there. The most interesting idea & maybe most practical is the "radio" model. I patronize Dunkin' Donuts 'cause I know they support Maggie's. (AND have the BEST coffee!!)
I am much with #4 Bruce Kesler
The news organisations should be paid. But I suspect what I would agree to, going through one subscription to access all sites, would be illegal.
I follow links often. I usually get to something in the NYTimes a couple of times a week, the WSJ about the same, a number of other US papers and TV sites, several UK sites, two Australian sites, occasionally German, Japanese, Korean, Indian... Subscribe to all of them? Or, to any single one excluding all others? Can't afford all, do not want to be limited to one.
I disagree that there are pay sites that are doing well. There are places like the NYT that have important web sites but they are living off the reporting/commentary of their paper which is going down the tubes. The web runs on basic economics and all web sites are on the margins of production. If you have someone manufacturing a car, they can make a good profit compared with the guy providing a replacement muffler. On the web there is no central, indispensable producer. The basic information is out there for free. All sites are marginal producers each adding only slightly to the overall product and therefore each providing only a negligible amount of added benefit to the consumer, which the consumer is therefore correct in wanting to pay very little, or nothing.
As an aggregator Maggies provides little original material and much of that is frankly fluff. I like it but I wouldn't pay much for it. As an exercise, take a month of Maggies and take out all the links to see if you have a magazines worth. Add up all the articles on boats, trips, food and gardening and decide what magazine that is most like. Now, did you ever subscribe to that magazine? You read it in the dentists office, but you didn't really buy it.
And as far as buying a magazine, that was a bit of a luxury item for me. I got half a dozen or more a month but adding a 7th usually involved dropping one of the originals. It got to be a routine to go to the library on Wednesday night to read the lighter mags, the ones I wasn't going to keep around for reference. And of course I don't have to do that any more, the internet keeps all the back issues for me forever. Imagine having to pay to use the library where there was a charge every time you looked at a new shelf.
I grant you that the economics of the internet doesn't seem sustainable and having the vast reporting system of the NYT to provide new and important content is not reproducible on a web site. But breaking basic economic principles to create a business model won't work either. Good luck, I hope Maggies is around for a long time. But let's be realistic, hope is the right word.
I could list all the publishers that have erected paywalls, and it would probably shock you - but all of them erected these walls because of a single reason. That reason is they are healthy, but not growing their internet revenues 'enough'.
You may say the NYTimes is not going down the tubes, and it is more certainly NOT living off its print operation. I think you'd be very shocked and surprised how well some portions of its internet division are doing (I have friends in the company). I don't like the NYTimes' reporting, but many people do are and are still willing to pay for it. Good for them (I ended my subscription about 10 years ago).
The problem you explain by saying basic economic principles apply, and they shouldn't be broken, is exactly WHY more firms are erecting paywalls, and more will. Over time, the only stuff which will remain free is stuff you can get anywhere, anyway. Immediate headlines, sports scores, opinion pieces by people trying to make a name for themselves, people who can afford to run a site without having to worry about making money, or have revenue coming in from elsewhere.
I subscribed to only 3 magazines at any particular time, 1 newspaper, and my wife had 3 magazines as well. But this is the great value of the subscriber model...you don't need many subscribers to make the economics work.
I posted this for a particular reason. That reason is, over time, the number of free links are going to diminish. The assumption that everything is 'free' is going to eventually lead to the failure of many sites people rely on for information. Media follows cycles, and those cycles tend to repeat over time. Sponsored TV? That's how it began. Then it broke down into competitive advertising. By the late 1990's, the sponsored TV model was becoming popular again in the cable market, and varieties of it still exist.
Pay for content? When the internet first started, it was one of the primary methods used by entrepreneurs to make money. That broke down, and is now being revived in a variety of ways.
Subscription isn't going to overwhelm the internet, but it is going to become more popular again. Some free stuff will continue to survive in order to attract people to the pay wall. But the pay wall is where the 'good stuff' will be dropped behind, and we're going to have to get used to it, eventually.
Pardon, I meant to write "you may say the NYTimes is going down the tubes"...