What killed publishers – may kill commercial blogger too

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As sad as it is, industrial media killed itself. It is NOT the Internet that killed publishers it is the change of their business model from independent content to advertising.

A publisher used to make money by providing a given audience latest news, well researched and easy to consume. Readers paid for the news and publishers made a profit by balancing cost of news gathering and distribution with newspaper revenue. Rather simple model.

In the 70s a new business model entered the publishing industry. Advertising. While the New York Times once stated that they will never have adds… 20 years later the revenue model for the entire industry was advertising. Charging for the newspaper had nothing to do with revenue but exclusively with the fact that the papers had to report the number of sold circulation to the advertisers.

Then the Internet came to life publishers had a gigantic opportunity: a) The news could reach the subscriber even faster and b) the cost of distribution could go way down at the same time. So if news gathering, journalistic preparation and distribution would be the purpose of a publisher, The Internet would have been a blessing. But at that time publishing wasn’t about news distribution anymore but about advertising distribution. And the new advertising model wasn’t too clear to the printing industry.

And as publishers didn’t really know what their business model is, advertisers went directly to the Internet – not needing print anymore and the chewed out news world is going out of business. Well – almost.

But now the next wave is already coming. User reported news, independent blogger, instant news distribution via Twitter. And the new publishers come to live like “Customer Think”, “Social Media Today”, Twitter as a media in itself and many others.

Our world is more than ever thirsty for news, information and updates. All the publishing industry has to do, is to understand that new world, it’s dynamics and its most likely development in the future.

And 50 Million blogger have the same problem today. They hope to make money from advertising. They never will. 50 Million blogger didn’t even reach the $100 level to get paid by Google. Google has $1Billion deferred revenue in their books – money that isn’t paid out because the $100 level wasn’t reached. Advertising revenue is just not a business model – not in the long run – not for publishers – not for bloggers – and not for software publishers.

@AxelS
For all who have trouble with my spelling and grammar

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. XeeMe.com/AxelS

4 COMMENTS

  1. Axel,
    You are absolutely correct. Blogging (or any other business for that matter) cannont thrive if its’ basis for existence is to generate advertising revenue. The basis for existence must a passion for what you do. The potential for income from that business, if it ever comes, comes from the value delivered, not on how much advertising revenue can be squeezed out of the venue.

    If the 50 million bloggers number is correct, that’s staggering. That is almost one out of every 100 people on earth. No wonder most people don’t make money blogging, there simply isn’t enough customer base to support it.

    Having said that, the key to financial success is not in selling advertising, but in providing solid value and a product or service people need or want. When newspapers struggle and go under, it isn’t because of advertising, it’s because the manner in which people get their news has evolved and the papers have not. They were still using a format first utilized in(and largely unchanged since)the 18th century.

    The arrival of the internet as a source of news, and it’s evolution to the entity it is today, enables people to selectively retrieve the news they desire and leave the rest un-read. That kind of selectivity brings about the demise of print news because with any paper, you have to wade through a lot of extraneous content to find what interests you. Through RSS feeds and other sources, the internet provides a customized news source tailored (from multiple sources) to each persons specific desires. A print news venue simply cannot compete with that and so the old school news sources must adapt or die.

    Ultimately it is the end user who benefits from such an evolution and in a capitalist society, that is a great thing.

    For the blogger, the situation is the same, adapt or die. There is no sure thing and nothing will last long in this technologically evolving world. You have to diversify, keep an eye on emerging technology and adapt to the changes as they come along, hopefully keeping one step ahead of the wave.

    Nice article and well put.

    TimTipper
    http://www.blogonsc.com

  2. Publishers are in business to make money from, er, publishing. Which these days usually mean through advertising. Although the print business is dying, I think there will continue to be a market for ad-supported online publishers, if they can build a sizable audience with the right characteristics.

    The high cost of print coupled with difficulty measuring marketing ROI will force painful changes. The Seattle newspaper just went all digital. I know of one niche publisher that would like to get rid of a magazine and focus online. Another is selling few if any ads–in a reversal of sorts, print ads may become “value add” to more effective online media. The problem is, the costs of print media are too high. I predict the magazine will disappear in the next year.

    As for bloggers, I question the sanity of anyone doing blogging in the hopes of making money on advertising. Certainly nobody can make a living on what Google pays. But there are plenty of good reasons to blog, otherwise why would any online community exist? Making money directly from blogging should be the last thing people think about, not the first. You’ll be lucky to clear enough to buy a latte once a week.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  3. “The arrival of the internet as a source of news, and it’s evolution to the entity it is today, enables people to selectively retrieve the news they desire and leave the rest un-read. That kind of selectivity brings about the demise of print news because with any paper, you have to wade through a lot of extraneous content to find what interests you.”

    Well, yes, except over the years print journalism found many ways to guide readers to the bits that interested them – headlines, decks, standfirsts, pictures, graphics, captions.

    How many newspapers were ever read in their entirety?

  4. And as publishers didn’t really know what their business model is, advertisers went directly to the Internet – not needing print anymore and the chewed out news world is going out of business. Well – almost.

    3freester

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