Who benefits when publishers that charge for print media, give it away for free online?
Before you scream "consumers," consider this: paying for the privilege to read high quality content was often a competitive advantage for consumers. If you paid to read the New York Times and Wall Street Journal every day, you were more informed than the person who didn't -- and didn't that advantage feel both nice and well-earned? Those paying for content are better prepared to share a more educated opinion than someone who didn't put forth the monetary commitment to self-educate himself. Now that this content is available to everyone for free, that privileged advantage has all but vanished.
What types of companies have benefited the most from the decision all publishers have made to offer free access to their content online?
Try this list on (in no particular order): Ad servers, Ad Networks, Rich-Media Vendors, Behavioral Targeting Companies, Online Agencies, Data Mining Companies, Analytics and Research Companies, Malware, Search/Portals, Content Aggregators, Yield Optimizers.
When do publishers arrive on the guest list for the party they threw? This is not complicated. Free content means far greater page views and subsequent ad impressions for sale. This helps the companies listed far more than the very publishers producing the underlying "product" driving supply -- and worse, has resulted in self-inflicted harm to the publishing business.
How it hurts
Publishers must convince advertisers they deliver consumer engagementbefore anything positive can happen. In less poetic terms, a publisher's sales force must demonstrate the person consuming their content cares more because of where that content was produced.
So why are publishers struggling to define the consumer engagement they deliver online? It's because their content is not directly paid for. When content is purchased, engagement is a given. That's why print CPMs lived in a stratosphere north of other media. Without a solid engagement story online, a publisher's sales force works with a weakened pitch. This in turn backs them into narrowly focused conversations with buyers about campaign performance -- a battle they cannot win -- causing prices to slip, and negatively affecting a publisher's overall core value.
Great content should be purchased. Inferior content should be voted off the island. The difference between the two can be found by measuring the commitment consumers make to embrace it. By lowering the level of commitment required online, publishers have lowered their own value. That's the mistake Rupert is brave enough to own.
Implementing a pay-for-content strategy online today comes with relatively small issues in terms of execution. The question instead becomes: Do content publishers have the stomach to turn back, this far-gone in the wrong direction? Rupert does.
When that switch is flipped, he and any publishing brethren brave enough to follow will be left with far fewer impressions to sell than they have now. But in return, they will deliver the "right number of paying customers" they can deliver on this digital platform, not an inflated number driven by those just window shopping. As a result, Rupert's sales team will have an online engagement story that will drive higher value and prices while embarrassing much larger free sites. It will be like selling a paid-circulation magazine versus a freely distributed circular.
Those in the ecosystem of online media making money but not producing a lick of content will throw up on this concept. They'd get even sicker if publishers of all sizes came to their senses and pulled the plug on free access to their content online, rebuilding their digital businesses based on paid engagement.
Publishers mistakenly think they are part of a twenty-plus-billion-dollar online industry. The reality is they are being used like a trampoline to inflate the market with impressions others benefit from, while their own value gets trampled.
In the history of media, if all content started off free, where would we be now? Ride on, Rupert, ride on.