Commercial Breakdown
June 30, 2009
When publishers and media companies first begain to experiment online the business model to follow seemed obvious – charge people to read content. It was worth a try, but experience showed that it didn’t work – with so much competing free content available the punters simply went elsewhere. So the pay-barriers came down, and publishers pinned their faith on ad revenue. As the economy boomed and broadband spread to every home the banner ad market matured, and some websites began to make actual money. Then the crunch hit. There are few more cyclical businesses than advertising, and as the economy dived so did online income. With traditional markets squeezed even more badly media companies are looking again at those expensive web presences and, at least in Rupert Murdoch’s case, concluding that the ad-funded model doesn’t work.
Which is as maybe. But that doesn’t mean that the failed pay content model will suddenly start to become viable. As the Guardian’s Michael Tomasky argues here, bankers may pay to read the Wall Street Journal but it’s relatively unlikely that builders will pay to read Dear Dierdre or the thoughts of Nikki, 19, from Essex. Even in specialised areas like law and medicine it is hard to expand subscriptions beyond the core, must-have professional material, as I can testify from my own career in publishing. Finding successful business models is one of the hardest problems facing the industry, but you still can’t make something pay just because you need it to.
