We Never Sold Journalism

I have a confession: the news paywall debate irritates me. It irritates me, because this discussion was had years ago, and discussed with a great deal of depth and intelligence across the emergent publishing and journalism blogosphere. And then it was promptly ignored by the majority of the publishing industry because they didn’t think that print was in any danger.


And now everyone is piling back into the discussion as panic begins to set in throughout organisations that never looked for revenue models beyond the “sales and ads” combo. And I was reminded of this by a throwaway comment in a blog post about a totally unrelated discussion (the old Apple versus PC discussion):

Google isn’t a tech company, it just gives the appearance
of being one (as I’ve said many times before, it’s really in the
business of ad sales, like any publisher – it doesn’t sell technology).

This, my friends, is the elephant in the room: we never sold journalism. Sure, we charged people for a package that included journalism. But, with some honourable exceptions, what we actually did was charge people for an advertising delivery vehicle. Often, in fact, we gave away the delivery vehicle. We call it controlled circulation in the B2B publishing world.

And then, somebody built a better mousetrap. Google isn’t a threat to the publishing industry because it “steals” its content for Google News. It’s a threat because it destroyed our advertising models.

And that’s the issue I see too many people skating around in the call for a shift back to paywalls. We have never charged truly charged what news cost to produce, and there’s no way we can suddenly ask people to start doing so, just because our advertising model went bust.

  • https://me.yahoo.com/a/H1qR1Bc9xvZCStFfsw7HGYmqT17.OroIQhgqEpBIko27q8N.zm4kyF23#f56d7

    I’m not sure there were ever any online advertising models that actually monetised journalism effectively. Especially in B2B. There was just a hope that traffic could be magically transformed into revenue – as soon as print revenue declined dramatically online was left to stand alone, and exposed for what it was. There are monetisation options in B2B online- jobs, classifeds, leadgen etc, but they still rely on someone giving handing over money for access to an audience, and if that audience isnt attractive, or those people dont have money the model falls down.

    So what DO publishers do? They can’t monetise via advertising, the can’t put the content back in the bottle…

  • There are a number of solutions, most of which have been batted around the blogosphere over the last few days:

    Reduce cost overheads (particularly around costs to publish or support costs)
    Focus your efforts on building niche audiences where there is a clear advertising-related spend that can be more valuable than Google’s commodity model
    Build related data and analysis services that people will pay for

    I’m not saying that there is anything wrong with facilitating people paying to access audiences – just that the old ways don’t work like they used to…

  • Robbo

    Yes Adam,Journalism has been the fig leaf that has allowed publishers to extract money from advertisers. Working at one b2b publisher many years ago it dawned on me that I was the cost that had to be paid to stop the ads bumping into each other. It was a model that worked economically and gave me the space to write about subjects that interested me.
    The world has changed and unless you’ve got something that people will pay for you’re already finding it hard as publishers. It ain’t going to get easier.

    Hint: to save your business look for information that is hard to gather and can drive business decisons.

    General news organisations have lost control of their monopolies of news so thier chances of charging meaningful sums for stuff that isn’t life-or-death to people, even if they’re owned by the Big Beasts or are high value brands look fag-paper thin.

  • Ian Betteridge

    Being a bit more charitable than Robbo, I’d say that what publishers were selling to advertisers was largely relevance – and the more relevant their ad would be to your audience, the higher the price you could extract from them and the better their returns would be.

    A case in point is my old magazine, MacUser. MU had a relatively tiny audience – at its peak, a circulation of around 35,000 (and lower than that during its most profitable phase). But those 35,000 readers were people who spent a lot of money on Mac-related equipment every year. I think the average spend was in the region of £10,000, and the response rates to ads was very high.

    The key was that the audience was small, high-spending, and clearly differentiated. The problem for mass-market circulation titles like newspapers is that they really aren’t. You end up racing to lowest-common-denominator ads, with low CPMs.

    And sadly, the race to build up audience in terms of absolute numbers – page views and unique users – has made this worse, not better. Publishers appear to have been persuaded by journalists (always eager to have their work distributed as widely as possible) that this was the only way to make money on the Internet, rather than focusing on profitable niches with low-cost, high-value content. Cue wailing, gnashing of teeth, and no trebles all round.

  • Even though I often say the same thing, I think the picture is slightly more complicated for some newspapers (particularly nationals) that get the majority of their revenue from cover price.

    That said, it’s been the growth of advertising that has both made and broken publishing – lying behind the incredible growth in publishing in recent decades, the merger and acquisition behaviour that put many publications into the hands of shareholders who saw gold in them there 20-30% margins, who then squeezed the operations for more profit, and didn’t prepare for a shift like this which has seen them lose the control of the supply chain that they had in print. For all the talk of a ‘dotcom bubble’, we’re just emerging from a ‘print advertising bubble’ of over-borrowing on inflated valuations.

  • Indeed – that’s why I mentioned some “honourable exceptions” in the post.

    And, yes, the news publishing industry is facing a perfect storm of structural change, cyclical change, business model disruption and over-indebtedness, with the influence of each of those factors varying quite significantly from market sector to market sector.

  • I think another nuance you could put on this is what publishers actually sold is audiences. It used to be impossible for anyone but huge corporations to amass a big audience in any media, but the loss of distribution monopolies thanks to the internet has drastically lowered the barriers to gaining an audience, such that your 14 year old cousin can reach millions through youtube etc. Mass audiences are no longer a scarce commodity and the value of reaching them has plummeted. The audience hasn’t gone from papers to online by any means, its been duplicated. Google hasn’t stolen an audience, it just radically undercuts the cost of reaching them through newspapers or any other media, thanks to an ingenious business model that has none of the overheads of content production. This has affected the mass audience providers like national press and TV, but there’s absolutely no reason why it won’t affect niche and B2B publications just as much. The example used above was MacUser … I have absolutely no doubt you can reach those same high-spending Mac people extremely effectively through niche Mac-oriented websites or through Mac-centric search keywords…