What amazes me is why all the smart people in the publishing world think they have to give away all their information when they put it on the Internet.
In theory if you get enough “eyeballs” then you can sell more ads and the revenue from the ads will cover your costs and generate a profit. But, that theory is not working.
If online news sites like the
Huffington Post can’t generate a profit from digital advertising, there is something wrong with the business model. In 2014 the Huffington Post generated
$146 million in revenue -
and broke even.
Ads are less and less effective. So, there is constant pressure to deliver more ads, at an ever lower prices per click or view. We are rapidly reaching the point where it is impossible to find and read the content offered due to the distraction of the ads.
Advertisers started out with banner ads, but everyone stopped paying attention to them. According to the U.K.’s Internet Advertising Bureau on average a banner ad must be served 1,250 times before someone clicks on it. And a click doesn’t necessarily mean the consumer will engage in an economic transaction with the advertiser.
Then they started putting lots of ads on side panels next to the copy. Most consumers probably ignore those ads as well. Not to be dissuaded from getting your attention advertisers are now forcing you to watch 30-second ads before you’re allowed to read each story. (Sometimes they are only 15-seconds, and sometimes the reader can click out of the ad, but that is happening less and less.)
On top of that, as you get down in the story another video ad pops up that you have to sit through before you can continue reading. All these ads take time to load so it takes more and more time for consumer to get the information they want. And, in today’s society, time is our must valuable commodity. Is it any wonder almost
198 million web surfers are using
ad blocking software.
(According to eMarketer 63% of Millennials block ads when they view digital content. Apple new iOS9 makes ad blocking on the iPhone and in its Safari browser easy.)
Next to come --well to a certain degree it is already here -- is
in-image advertising. Advertisers know that people would rather look at images than read copy. Thus, whenever an image appears on a digital page they want to put an ad in that image. In theory this might be good for photographers if they can get a little piece of that ad revenue, but in all likelihood the revenue photographers receive won’t be significant. (If you want to know more about this check out
this story).
New Business Model Needed
Publishers need to reduce their focus on ad revenue and start charging for most of the information they are giving away.
Many publishers are pushing subscriptions, but making a long term commitment (even a month) is not what most customers want. Google search makes it easy to find stories of interest. But when readers must buy a subscription (and then remember to cancel it later if they are no longer reading material from that publication) often they just pass over the story and go looking somewhere else for the same information. Nevertheless, readers will pay a reasonable amount to read stories that interest them.
Instead of pushing subscriptions, publishers need to make it easy for readers to pay very small amounts for just the stories that interest them. Part of the problem with small payments of $1.00 or less is the transaction costs, but this can be overcome with a system of credits.
For a few dollars the customer could purchase a package of credits. Each credit would be worth $.25. Some stories would be worth 1 credit, some 4 credits, some heavily researched pieces might be worth 8 or 12 credits. Some stories, particularly breaking news might still be free, but a lot of the commentary and in depth analysis that is now being given away should be earning some revenue.
While major publications like NY Times, Wall Street Journal, Washington, Post, LA Times, Economist, London Times, London Telegraph, The Observer, Time, etc. could easily do this an even better system would be a central location where readers could easily access all the information available from a variety of publications.
Readers could purchase a package of credits from this organization. Then through the organization’s web site they could access a whole range of publications. When they find a story they want to read they simply click on the story and credits from their account are credited to the proper publication. The larger the package of credits they purchase the greater the discount per credit.
As readers begin to find that they are reading lots of stories from a single publication, they may realize that a subscription to that publication is a better overall value. But the system enables publishers to gain some revenue from those with a casual interest in what they have to offer, and to build a customer base. Information about subscription opportunities can be supplied at the bottom each story.
My newsletter (
www.selling-stock.com) many not be a good example because it has very targeted information, of interest to a small number of people in an industry that is in decline. But a breakdown of my customers provides some insights into the opportunity.
| Use credits to read one or two stories |
14% |
| Use credits to pay by the story, but buy larger credit packages |
26% |
| Subscription for one-quarter |
23% |
| Subscription for two or more quarters |
12% |
| Annual subscribers |
25% |
For a variety of reasons 40% of my readers prefer to pay by the story rather than purchasing a subscription. And they pay more per story than if they had a subscription. However, some of these readers find that there is enough valuable information on my site that it is worth purchasing a subscription. In some cases, readers have a particular short term interest and subscribe for only one-quarter, but often they renew when their subscription runs out. Some quarterly subscribers simply like to manage their cash flow by paying quarterly rather than annually. Only 25% of my subscriber pay annually.
I have been offering the credit system for a little over five years. The stock photo industry is clearly in decline. Many of my former readers have left the industry, and are no longer interested in reading what I have to offer. Nevertheless, readership has been increasing and my 2015 revenue is on track to be 30% higher than 2014.
Why Should Photographers Care?
Many of my readers may ask, “What’s this got to do with selling photography?” Photographers need healthy publications that require editorial content as well as images for advertising, if they are to continue to thrive. Publications need to be able to provide more in depth analysis than they currently have the space to cover. Advertising alone is not, and will not, pay for this. The business model needs some kind of change, if there is going to be much of a long range market for photography.
Advertising will not disappear from publications if the readers start paying a larger share of the overall cost. But, if publications were to focus more on providing useful information and making it easier find and read what they offer, rather than just sell advertising it would not only benefit the publications, but all content creators. On the other hand, if all creative material has to be free eventually the quality and depth of coverage will suffer, if it hasn’t suffered already.