Trying and trying again.

Half-formed Thoughts: Thinking about Premium Publishers

The last few years have seen massive investment in the advertising side of the content equation, and our firm has been right there with the crowd. Meanwhile, the consensus seems to be that the world is moving inevitably towards the Huffington Post model, where authors publish for free in exchange for a portal-provided audience. I surely agree that a new form of journalism is emerging (and is likely here to stay), but I disagree deeply with the notion that the emergence of commodity content will ever kill premium content. In fact, I think premium publishers are due for a resurgence. Over the weekend, a colleague asked me to lay out why I believed news organizations (and some form of premium content) will survive. You can find my bulleted (and admittedly scattershot) response below.

• The notion that premium content will be killed is simply too extreme. There has always been a balance between different forms of content, be it short- or long-form, high- or low-quality, opinion, reporting, or interpretation. The audience’s desire for certain content forms evolves, but it doesn’t die.
• Good writers are people, and people like to organize for security. The notion that newspapers will disappear ignores the motivation of their current workforce. sure, many will go freelance and enjoy it, but many more will seek the security and predictability of a larger organization. these organizations will look far different from the current organizations—smaller, more technical, and without a printing or delivery workforce—but they will exist and thrive nonetheless.
• Front pages (and the brands required to drive traffic to them) will remain the premier entry point for news long after we’re dead. Social is great for particular people, but it’s too fine-grained and overwhelming for many. Simple is just easier, and front pages are simple. They’re also the dominant segment of society. By a long shot. A long, long shot.
• It became obvious 10 years ago that the internet was the future of journalism, but it will only be in the next 5 years that the grads of that era will dominate senior roles at premium organizations. Smart young people are reaching positions of power, and they’re very interested in keeping this industry going. They also recognize that they need every tool in the bag to build a new state of affairs.
• After years of trying, the publishing industry is finally hitting on models that work, however modestly. For instance, the Times’ porous paywall is promising. Viewed in conjunction with the evolution of buying behavior in music (physical goods —> Napster —> “no one’s going to buy songs again!” —> iTunes), I figure some significant portion of society will pay legally for a product they value provided it’s delivered with less friction than theft (this goes for all products, btw, not just digital goods). By monetizing that smaller but more valuable segment of the reader base, a publisher can earn many times more revenue than they could achieve through advertising alone. Porous paywalls represent new revenue line that operates at extremely high margins that make up for the smaller population it draws on. Optimized remnant ads are great, but they’re only one revenue line to be had in a very, very large industry.
• The flip side of the over-investment in adtech is the underinvestment in publishing. Ads need content to survive. I’ve heard the arguments that content will commoditize to supply the appetite of remnant ad buyers. I don’t buy it. It reminds me of the notion that the printing press would kill good writing. Adtech hasn’t destroyed writing, it’s fractured writing (again). Adtech has made commodity writing profitable to a degree not previously seen, but that doesn’t kill quality writing, it just overwhelms it for a little while. There are lots of smart people with lots of money thrashing about for answers, and for the first time in a long time, they’re seeing daylight. I think they’re going to run toward it with wallets wide open.