Friday, September 21, 2007

Content, paid and otherwise

With the New York Times announcing that their idiotic TimesSelect subscription service is finally coming to a close, the web has been filled with the pronouncement that paid content has finally and absolutely been proven impossible to pull off. I think that's a false assessment of the situation, since TImesSelect--a service that essentially just put their opinion writers behind a toll booth--was a poor decision to begin with. In addition, it overlooks (as, let's face it, these things always do) the fact that niche journalism has been able to and continues to be able to pull off paid content (Josh Hooten's excellent being an example that springs immediately to mind).

All that said, Jeff Jarvis, who I often find to have drunk a little too much of the Kool-Aid, does raise a good point that's often overlooked in the whole print vs. digital debate when he says:
Don’t let anyone tell you that this is bad for the content business. It’s only good sense. Having worked in the magazine business, I saw this even at the dawn of the internet: As I said above, a magazine has to pay up to $30-40 in marketing costs to acquire subscribers; it can pay up to $5-7 to print and distribute a copy of a glossy magazine; it has high editorial costs. Add that up, and a magazine can find itself in the hole $60 or more per subscriber in the first year of a subscription. And they get as little as $1 per issue in subscription revenue. Yet clearly, a magazine can make money because that subscriber’s value to advertisers is much greater.

It’s the relationship that is valuable. It’s the relationship that is profitable, not the control of the content or the distribution.

Well said and exactly right: The amounts spent on acquiring readers for print publications is huge, and it's much simpler online where good content can act as your best marketing tool. Toss in the actual physical cost to print (not write) and distribute and you've got even more money on the table. Take all that out of the equation and you begin to make up the losses due to the lower cost of online advertising.