Seth Godin noticed eBooks recently and comments here.
Godin points out the fantastic economics for an eBook author who gets the offering right -- and he's right about the process, too: find a niche, build a mailing list, provide information of value, organize it into an eBook and sell it at a fair price.
It's another example of the many ways of making money from online content.
Here's another reason why the people banging the "content is free" drum are barking up the wrong tree: the coming recession.
As Henry Blodget notes, if a recession is on the horizon (and he's compiling the evidence for it) it's bound to hit online advertising. Yet just at the moment when storm clouds are gathering, the "content is free" chorus is clamoring ever more loudly for publishers to drop their subscription services and increase their dependence on advertising.
Erick Schonfeld of TechCrunch does some arithmetic on the advertising potential of the Wall Street Journal website should the subscription wall come down, and the results are singularly unimpressive. Based on 10 million website visitors (a number that soon-to-be-owner Rupert Murdoch is throwing around), Schonfeld calculates a potential $60 million in annual revenues for wsj.com. This assumes a fairly robust $25 CPM.
Given that wsj.com already generates an impressive $50 million in annual revenue from subscriptions, a 20 percent increase for throwing open the barn door does not seem fantastic. And if the recession comes, and advertising comes under serious pressure, there could be minimal if any gain. The "content is free" advocates, who think advertising alone will sustain publishers, may be mistaken.
In a recession it would be best if publishers were able to tap into multiple revenue streams -- giving them more than one leg to stand on. Subscription and advertising can work in tandem to strengthen a publisher's revenue base, especially in an adverse climate. So why is the "content is free" chorus singing only one off-key note?
Tags: paidcontent, subscription, wsj.com, content is free
What is it about Jeff Jarvis that makes him persist in his crusade to assert that "content is free," against the obvious interest of the publishing community he so clearly loves?
Jarvis frequently argues that publications should drop all charges for their online content and instead open up their websites to unfettered access. He claims that content already is free, and that big publishers need to catch up and accept this. To support his premise he often cites recent examples such as the dropping of the TimesSelect subscription service by The New York Times, and recent musings by Rupert Murdoch that wsj.com may go free as well. Of course, these examples prove the sweeping generalization that "content is free" about as much as the occurrence of an eclipse proves that a dragon lives in the sky and is devouring the sun.
In the case of the Wall Street Journal, there is nothing but speculation (although it may well prove true). In the case of TimesSelect, it was a good business move to go free, because the content was not sufficiently differentiated to justify a subscription fee.
Paid content works when it is unique, exclusive, highly targeted, of measurable value to its audience, and actionable. Opinion columns don't qualify and are indeed better off free. Financial information does qualify and is often charged for -- although financial news is somewhat more of a commodity.
The point is that there is plenty of content that people are willing to pay for because it's valuable to them. At my company, SubHub -- which is focused on providing content owners with multiple ways to monetize their content, including subscription, advertising and e-commerce -- we have put together a list of 250 highly successful paid content websites, and we could have kept going (e-mail me if you want a copy of the list).
Jarvis really seemed to go off the deep end yesterday when he belittled Michael Rooney, the chief revenue officer of The Wall Street Journal, for his reaction to Murdoch's musings. According to Jarvis, "Mr. Rooney" (as he condescendingly addressed him in his best schoolteacher style) lacks a "can-do attitude" for daring to suggest that it might be prudent to think carefully about how to best wean wsj.com away from a spectacularly successful subscription content service that generates $50 million in annual revenue.
Seemingly in Jarvis' view the right approach at wsj.com would be to simply turn subscriptions off and let the chips fall where they may. But let's be clear about one thing. Rupert Murdoch has never owned newspapers for the revenues; he's owned them for the influence. Murdoch's newspapers collectively are loss-making and are subsidized by News Corporation's other, more profitable activities. So if Murdoch does turn off the paid firewall at wsj.com that will probably be his motivation -- to wield the maximum possible influence over his audience.
This says a lot about Rupert Murdoch, but it says little about whether or not content needs to be free.
Considering how much Jarvis has done to encourage publishers to embrace new media, to adapt and survive or even thrive in this new climate, his continual "content is free" drumbeat is perplexing. In order to prosper, publishers should be developing multiple revenue streams, not eliminating them.
To promote the mantra of "content is free" is to recklessly encourage in publishers a greater dependence on advertising as their sole source of revenue. Yet the capabilities of new media make the implementation of multiple revenue streams even easier than ever.
And with the majority of advertising activity moving away from big publishers and into the hands of newer players, such as Google, "content is free" strengthens those who control the advertising and weakens those who are dependent upon it. Under "content is free," big publishers would continue to bear the costs of content production while depending increasingly on others for revenue generation. This is a losing proposition.
Finally, since we know that many content creators are doing very well under the paid content model, what does it say about Jarvis' view of big publishers if he believes they are not capable of creating products that are differentiated enough to tap into these revenue streams?
Of course they are. It takes creativity, innovation and a willingness to break out of old paradigms. If they don't do it, others will.
And Mr. Rooney, if your can-do attitude doesn't cut it at the Wall Street Journal, please give me a call -- we could use someone like you.
Tags: JeffJarvis, Rupert Murdoch, wsj.com, paid content, content is free
