Monday, July 26, 2010

Content for nothing

Online advertising is more popular than ever, and represents an ever-increasing slice of the media revenue pie. But as media properties grow their online audience, advertising revenues have seen their margins slashed.

Daniel Lyons at Newsweek points out that The Huffington Post, top dog of online media, will earn approximately $30 million in revenue this year. That's despite having five times the audience of The Washington Post.

As a comparison, the Washington Post recorded over $45 million in profit for Q1 of 2009. Their revenue? $1.17 billion. That's for the quarter, not the year.

Lyons reports that Michael Wolff, founder of Newser.com, has had his online advertising fall by 20% in terms of CPM value. Even as the overall audience grows, the value of each individual reader is falling.

Compounding the problem is that few readers seem to value online content. According to USC's Digital Future study, exactly zero percent of respondents showed any willingness to pay for online content. And doubly vexing, most were unhappy with online advertising too.

Jolie O'Dell at Mashable.com analyzes the results.


“Such an extreme finding that produced a zero response underscores the difficulty of getting Internet users to pay for anything that they already receive for free,” says Jeffrey I. Cole, the Annenberg School’s director of the Center for the Digital Future.


So what's the solution? Paywalls? As the source of online content shrinks with every reporter laid off or masthead shuttered, online purveyors like Yahoo! and AOL have attempted to fill the void with in-house content. But is Yahoo's acquisition of Associated Content really equal to professional journalism? Is an article written by "anyone" (so says AC's About Us page) which cost the company $5 and was written to capitalize on the latest Google Trend, really a substitute for in-depth coverage of current events?

What do you think?

2 comments:

Anonymous said...

Paywalls probably are not the answer, as the New York Times learned the hard way. Here's a related post...

http://techdirt.com/articles/20100723/17165010347.shtml

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