Popping the publisher bubble
Ben Thompson does excellent analysis. In his latest post he talks about the big problems facing journalism and publishing online. Here’s my favorite part:
It is easy to feel sorry for publishers: before the Internet most were swimming in money, and for the first few years online it looked like online publications with lower costs of production would be profitable as well. The problem, though, was the assumption that advertising money would always be there, resulting in a “build it and they will come” mentality that focused almost exclusively on content product and far too little on sustainable business models.
In fact, publishers going forward need to have the exact opposite attitude from publishers in the past: instead of focusing on journalism and getting the business model for free, publishers need to start with a sustainable business model and focus on journalism that works hand-in-hand with the business model they have chosen. First and foremost that means publishers need to answer the most fundamental question required of any enterprise: are they a niche or scale business?
- Niche businesses make money by maximizing revenue per user on a (relatively) small user base
- Scale businesses make money by maximizing the number of users they reach
The truth is most publications are trying to do a little bit of everything: gain more revenue per user here, reach more users over there. However, unless you’re the New York Times (and even then it’s questionable), trying to do everything is a recipe for failing at everything; these two strategies require different revenue models, different journalistic focuses, and even different presentation styles
A lot of publishers will need to rethink a lot of what they do. Today’s iOS9 and the included content blocking feature (that will allow folks to block ads in Safari) is living proof. It’ll be uncomfortable for a lot of publishers to figure out how to do business in a changing landscape, and they’ll need tools to help…