Saturday, March 27, 2010

Publishers should abandon both paid content AND advertising to survive

I'm glad that some Murdoch publications are going back to the failed experiment of paywalls - if only because it will reveal once and for all how far from right they've got their strategy for the networked world.

I understand completely why they are doing it - they've done the math (I've been through it with similar orgs). With only small audiences who pay they can make more money than with vast audiences who don't.

That's because those who advertise online don't pay as much as those who advertise in more traditional mediums. There has been a race to the bottom on advertising pricing which made certain of that.

Mass media publishers have learned that they can't make as much money in the networked world (where everyone is publisher, distributor and creator of their own user journey/experience) as they did in the world of control. So, they are attempting to go back to the world of control (when that genie is well and truly out of the bottle and showing no signs of wanting to return to it).

Information is free. But the way it is packaged - the experience of it - you can add a price to. Music, for example is commoditised. People don't pay Apple for music at iTunes. They pay for the packaging, the user experience, ease of usefulness. If this is what the TimesOnline etc will deliver for news content, they may have a business case. I struggle to imagine the parallel myself.

And if all they are going to do is offer access to information in the way they have done until now - but behind a paywall - then they will lose. They can only ever offer access to limited information with limited sources and processes of verification (and trust creation). The rest of the open web is unlimited in both these key respects. Open wins.

But I think through all this publishers are avoiding the key questions. Why do people pay less to advertise online than they did in traditional media? Online the Times et al can acquire greater audiences, more eyeballs. Why isn't that of higher value than print to those taking the broadcast approach to advertising? More eyeballs = pay me more - surely? Why is an online 'eyeball' worth less than an offline one?

Is it that the many digital innovations in advertising that the internet has enabled has lifted the wool from many eyes? It has shown that an eyeball doesn't equal a sale. Never did. But when you are able to measure the lack of transaction, the lack of interest, the scale of your interruptive spam - as the internet has enabled like no other medium - then the wastage of 'Advertising' becomes ever more clear.

Yet publishers persist with pay-for-my-content/pay-for-adverts-on-my-content as their only experiment - as if the solution can only be one or other, or both. Perhaps it's time for them to try a new experiment rather than repeat a failed one? Perhaps it's time to try not one, or other, or both... but neither.

How can publishers create value if they do not charge for content and do not take adverts?

Micro-contributions? Nah - that's just paying for content by novel means (as was Radiohead's pay what you like for our album) Sponsorship? Nah - that's just placing adverts on my content, by another name. Affiliate deals - just another digital ad innovation.

What can they do? Start with the Because Effect. Don't try to make money with content, try to make it because of it.

Content can be the social object around which communities of purpose form - co-creating communities ready and willing to wikifix solutions with brands and organisations - instead of having them imposed on them and fed to them through advertising.

Publishers can become platform organisations: platforms for creating outcomes with genuine ROI rather than platforms for pumping out things people may find useful attached to ads for things they rarely do.

Pay for content/Place ads on content, worked in a world of mass production and distribution - of mass media. But a new 'neither' model is required in a world of niche, of communities of purpose, of active rather than passive consumers - in a networked world.

Platform could be it.

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The rate of change is so rapid it's difficult for one person to keep up to speed. Let's pool our thoughts, share our reactions and, who knows, even reach some shared conclusions worth arriving at?