Back to Free Press – Zero Advertising Business Model


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I had the honor to give a keynote today to the American Business Media association. The audience was publishers (print and electronic), media people, agencies, sponsor representatives and everything in between. The topic? Of course survival of the publishing industry.

I asked the question how the people in the audience select products when they buy a new TV, or cell phone or car or computer or a new CMS system for their business etc. The feedback was “check the Internet, read blogs, maybe part of a online group, talk to friends, peers, and other people they trust”. I asked” “Who of you are influenced by advertising?” The answer: ZERO. Here is a conference that discussed only one topic all day long: “How can we survive and make more money from advertising, lead generation and other sponsorship opportunities. At the same time confirm that advertising has zero impact to their purchase decisions. Isn’t that interesting? There was no word about “reader interest”, “reader behavior” or what readers concern.

Why the news and publishing industry is dying?
The publishing business at its core is news and information aggregation and distribution. The old technology and the old tools to do research, interviews, travel… is very time consuming and very expensive. The old way of printing and distributing the news papers and magazines is even more expensive as well as challenging to get the news out right after the news were happening.

The inception of the Internet must have been a blessing as news could be aggregated much faster and distributed even faster than that. On top of the advantage of speed aggregating news is much less expensive and the production and distribution only cost a fraction.

B U T – The publishing industry changed their business model in the 70’s and 80’s. It wasn’t about news aggregation and distribution but ADVERTISING. The whole business model revolved around the idea to get money from advertisers. The publisher became advertising distributors. And today’s conference was just another proof point. All topics, presentations and panels circled around advertising, ways to get more adds into the media online and offline and better ways to get more eyeballs and more sponsors – to survive.

What is wrong with you people?
The world population is growing and the hunger for more, better, faster information is growing too. The need for well prepared and easy accessible news and information is growing exponentially – yet nobody seems to grab the opportunity.

The publishers’ new business model
The first publisher who eradicates advertising and focuses all the available energy and business creativity to information aggregation and distribution as well as reader interests (because those are their real customers) will become a winner in many ways. But a staff of 100 Journalists, editors, copy editors, designers… is just not affordable and not necessary in the new world. The new publisher need to focus on four core aspects:

1) Citizen content
News and information is provided by all of us. Social media is the new infrastructure, the world population is the news staff. The new publisher – very much like Social Media Today – will build their information aggregation mechanism around the greater public, people who blog, tweet and communicate in many other ways. News is aggregated in an ongoing manner – no release cycle, no news issue number or date, just a time stamp.

2) Structure and review
The new publisher need to find ways to quickly aggregate, structure and review the content. Once journalistically prepared it can be released. Some of the news may still hit Twitter first. That’s fine – no competition to the new model. The value-add is the journalistically prepared and verified content. That content is redistributed to all readers of that new publisher.

3) Distribution
The well prepared and well structured content is now released to the readership. All contributors may actually help promote the content through their networks, tweets and other mechanisms. Side note: [when I blog here, I tweet about it announce it in our online communities and even blog about it elsewhere – becoming part of the news distribution mechanism]

4) Monetization
The new publisher has only one focus: the best content, perfectly prepared for their reader. As a consequence of zero external influence, that publisher needs to charge for the content. Let’s assume $2.50/month or $30/year.

For the first time in 30 years we may have free press again. With no commercial influence, no paid story, no sponsored content, no annoying advertising, but only professionally prepared content readers would quickly support the new concept. At 5 Million readers that publisher would earn $150 Million a year – enough to make a profitable business leading the publishing industry out of their fatal model. Yes it’s bold, requires a risk taker and requires a lot of detail work to make it happen – but is there another alternative? I’m consulting businesses to make that happen.

Wouldn’t that model be the best for the reader? I’d sign up immediately; would you?


Social Media Academy

Axel Schultze
CEO of Society3. Our S3 Buzz technology is empowering business teams to create buzz campaigns and increase mentions and reach. S3 Buzz provides specific solutions for event buzz, products and brand buzz, partner buzz and talent acquisition buzz campaigns. We helped creating campaigns with up to 100 Million in reach. Silicon Valley entrepreneur, published author, frequent speaker, and winner of the 2008 SF Entrepreneur award. Former CEO of BlueRoads, Infinigate, Computer2000.


  1. Axel:

    How I would have loved to be in that room and watch the faces of the people in the audience! I too would be shaking in my boots if my business model was encapsulated around advertising and since no one raised their hand to say they were influenced by advertising in their own purchases — WOW what an exclamation point @ the heart of their issue.

    This digital conversion of the publishing industry will happen over time I’m sure, but when I think of the multitudes that love to read the paper while having their morning coffee — this is a behavior / preference I believe may endure (the tactical experience) — as this ritual long standing in many households.

    It would be a great improvement if I paid to receive the morning news from an unbiased credible source of journalistically prepared and verified content, free of advertising, (not to read online) but to enjoy during my Cheerios! … even if I had to pay more for the experience of holding hard copy in my hand — that’s a choice the publisher could give the customer.

  2. Axel, a provocative post as usual.

    However, I’m not convinced that a pure “new publisher” model (no advertising) will work for mainstream media. It’s mainly an issue of supply and demand.

    In the pre-Internet where traditional print publishers flourished, they controlled the supply of content because they created it with journalists and distributed the content too. The barriers to entry were high.

    Now, of course, there is a limitless supply of content and distribution channels via the Internet. And plenty of people seemingly willing to work for free because blogging is fun or part of their marketing agenda. Bloggers (like you and me) compete with professional journalists for “eyeballs.”

    So, why would someone pay for content when it’s available for free? Answer: when it’s of significantly higher perceived quality available only via a controlled channel of distribution. Like Cable TV. Sure regular TV is free, but with cable you get better reception, more channels and access to premium programming. But, you still see advertising because it does actually work to influence people.

    Or, consider open source software. A community creates the core software for free, but companies create value by adding additional function or services. In the CRM world, SugarCRM is a good example. You can get a very nice CRM solution for nada, and that might work fine for an individual user or small business. But to support larger work teams and get professional support, SugarCRM has unique packages and service options you can buy, including hosting.

    Another example is Drupal, the software that runs the CustomerThink community. Again, the core software is free, but there are lots of companies that do custom programming, design, etc. to put the software to work. Prominent sites running on Drupal include InfoWorld, The New York Observer and Popular Science, just to name a few.

    A second key question: why would a publisher want to invest in a paid-only business? To make money, of course. Unless a very large audience can be convinced to pay your hypothetical $2.50 per month, big publishers won’t take the gamble.

    I believe that the “new publisher” will develop free/paid hybrid models to ensure they have the reach that only free content can provide (along with advertising revenue) plus premium content for those willing to pay.

    The bottom line: newspapers and other print media can serve a valuable role in our world, but they will need to provide highly differentiated content to acquire (or keep) paying subscribers. If bloggers can provide similar content for free, then journalists will need to work on something else.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  3. A NY Times article does a good job discussing the pros and cons of free and paid models for websites: Ad Revenue on the Web? No Sure Bet.

    Pandora’s new model, which is often called “freemium” — a mix of free and premium — is becoming the most popular among Web start-ups.

    The down economy has put a spotlight on ventures supported only by advertising, but it still seems that a free/ad-supported option is part of the mix in most cases.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  4. Bob, I see you point. However, I’m not convinced.

    1) Advertising changes the publishers mindset – it is like heroin. You can’t just do a bid – it will quickly consume you. I can’t see a “disciplined way” of managing a bid advertising – like a bid pregnant 😉

    2) The readers are typically annoyed about the ads. And if they are so subtle that nobody sees them, you won’t find the advertisers. Again to make it work you need to spend a lot of time and energy to find the perfect doses…

    Profit maximization by compromising the base business model has never lead to the ultimate success. See Intel (never build computers), Apple (held their course), Computer 2000 / TechData (never bypassed their reseller sales channel)…

    Independent content and advertising sponsorship is a “Channel Conflict”. And like 80+% of indirect selling companies also sell direct because they believe a hybrid is better – even so the indirect or direct only companies including Microsoft, Cisco, Symantec, Dell prove them wrong, they still argue about their model.

    I see the publishing business the same way. Independent content is in conflict with payed content (name it how ever you like). If I would have any experience and no other business, I’d start a pure play publisher and bet that I will bypass the old model in less than 24 month.

    But again – right now it’s just an opinion and we have no prove, other than the hybrid is not successful so far 😉

  5. Axel,

    There are plenty of success stories in high-tech for hybrid models, where some accounts are handled direct (e.g. so-called “corporate accounts”) and others through partners. They can work well provided all the parties understand the rules of engagement. Dell does not prove the point that a single channel is the best way to go for all.

    Regarding ads, there are numerous options beyond the easily ignored banners. Google seems to be doing quite nicely with pay-per-click, by the way. Advertisers wouldn’t continue to use PPC if it didn’t work, and readers wouldn’t click if they ignored all advertising. The problem is that publishers can’t live on a cut from Google.

    That said, managing advertising/sponsorship is a lot of work. It might be easier to manage a simple business model with only paying subscribers. The one problem with that: all of us readers are also addicts and our drug of choice is free content.

    My point is not that readers won’t pay, just that with the huge volume already available for free, the new-age publisher that you advocate would have to provide a substantially better product, or much more interesting experience, to get people to open their wallets. Starbucks succeeded with an experience strategy, but wasn’t competing with free coffee.

    More newspapers and other publications will need to fail for two things to happen.
    1. Publishers will have to rebuild from the ashes business models that are sized and resourced correctly for the new world. And I think they’ll increasing turn to using contributed content managed by a core staff of professional journalists.
    2. Us consumers will realize that when their favorite newspaper disappears, that opinionated bloggers don’t actually fulfill all our needs. Facts and professional reporting do matter, and we have to pay for it.

    There are some interesting crowd-news experiments going on, such as and, but not something I’d pay for any more than I’d pay to watch YouTube videos.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  6. There’s an interesting AP story in the SF Chronicle today, about newspaper industry executives meeting in Chicago to discuss how to solve the industry’s problems. Newspapers have lost about 40% of revenues or $7 billion of classified ad revenue since 2006, and overall revenues are down $12 billion or 25%.

    Solutions discussed included better protection of Internet content, potentially charging for content and an industrywide approach to classified advertising.

    Good article here:
    Shhhh. Newspaper Publishers Are Quietly Holding a Very, Very Important Conclave Today. Will You Soon Be Paying for Online Content?

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom


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