A More Elegant Question About Publishing And Money

Mitch JoelPosted by

How are publishers going to make money?

That is the question that everyone in the media wants an answer to. This is the million dollar question? Scratch that, this is the multi-billion dollar question. It’s not just traditional media outlets that are scrambling to digitize their content, increase advertising revenue on their existing products or – worse – attempting to stabilize the loss and shrinkage that is happening. The truth is that advertising shifted from a model of scarcity to a model of abundance (many more outlets, much better targeting and for a lot cheaper). With that, the definition of publishing expanded as well. Social media networks became part of the fold, and other publishing platforms that could have monetized with a revenue model that wasn’t advertising-based, flocked to advertising as brands, agencies and media companies do what they do best: attempt to find more people to buy their products/services in the different places that these consumers spend their time. Now, the publishing and advertising businesses are in a huge, heaping pile of mess. Billions of dollars are at stake, advertising continues to grow and disruption is everywhere. We’re in an ad-supported world, where consumers say that they hate seeing ads (you know all about ad blockers, right), but also won’t pay for content because it has been given to them for free for so long. Ugh.

The question: would consumers pay for content if the ads were removed? 

MediaPost published the article, If There Were No Ads, How Much Would You Pay? And here’s what happened: “Zigby Analytics asked that same question to 1,004 US adults and found that Americans assign a value of about $1,200 per year to the services provided them. 85% of respondents said that they prefer an ad-supported Internet model as opposed to paying for content… It may very well end up that after all the dust settles around how publishers will make money in the future without destroying their UX, ad-supported models will turn out to be the best option. No one likes having to pay for things, after all. 75% of respondents said that they would reduce their Internet usage a great deal on all devices if the Internet was on a paid model. 90% of them said that services like email, blogs, the news and weather were very important or somewhat important.”

What does this tell us?

Consumer respect and value content. They prefer ads over paying content (but they hate the ads). Ad-supported models may be a publisher’s only hope (this means more players, less attention to the ads and less value on the price of the ad). Consumers would prefer free content (they value content, but don’t want to pay for it?). If publisher’s charge for content, they will get less consumers. Consumers all agree, that they can’t live without this content and the services. What a headache. Smart people are trying to solve this problem. Few publishers have found a true, valuable and sustainable business model around this. It’s a complex problem as more advertising shifts to digital channels and segments beyond the traditional advertising channel.

Perhaps a more elegant question about publishing is this: Do consumers truly understand the implications of what happens when these publishers can no longer make enough money to keep the lights on, and what this means for democracy, access to information and how sustainable communities stay connected?