General News is a Worthless Commodity

Aug 9th

I get cold called about twice a month pitching a newspaper subscription, but as we are able to subscribe to specific channels, generalist news lose relevancy, and loses profitability.

The NYT is rumored to be dropping its paid content wall. As generalist publishing moves toward free it still will not be enough to create strong sustainable profits:

"The New York Times is a strong and respected brand however the type of content they are writing about [in columns] is available everywhere," Borrell explains. "Their niche is strong writing and this is not a strong enough niche to charge readers for."

As long as news is just data, those profits are going to move to the aggregators who can cut deals with any publisher and dump any they dislike. Not surprising to see Google turning Google News into a destination, such that they can learn more about the news business and gain more leverage over anyone in that space.

What types of publishing business models will stay profitable?

  • Niche Industry Leaders Publishers in fields with few competitors, or content which is so good (good as in one or more of the following: evokes emotional response, overtly biased to match user bias, focused, consistent) that people chose to subscribe to that channel as a proxy for that entire industry. If you have your own distribution and a large following you don't need search engines to sell stuff or influence markets.

  • Honesty in Fraud Markets The AdSense business model is undermining the credibility of information. If you are serving customers making big purchases or customers who have been taken advantage of, many will want to pay a premium for peace of mind.
  • Conversion Experts If you can pay more for traffic than anyone else you can't lose. There will always be an arbitrage option available for you. Get enough leverage and get a fatter margin, which allows you to recruit and teach a pool of affiliates to make you money. If you can write content that converts you will get paid more per word. Google pushes CPA ads and today Yahoo! today just announced their traffic quality center.
Published: August 9, 2007

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Comments

michael
August 9, 2007 - 3:34pm

Great site Aaron!

Old school reporters are increasingly out of touch with the market. They are still in the control and push paradigm instead of the post and discuss.

I am trying to convince a client that having people pay to visit sections of their site is unwise. The more people visit and add content the more valuable the site becomes, so why put up barriers?

-Michael

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