A New Revenue Model for Journalism and Other Online Content

August 13, 2009

As a former journalist, and as an admirer of the craft and of its dedicated practitioners, the current revenue struggles of newspapers, magazines and even web sites that publish their work is a source of great despair to me. And as a voracious but exclusively online reader of all of this great (and even not-so-great) work, I’m in no hurry to see it disappear as publishing companies lay journalists off, eschew freelancers or, worse, go out of business altogether.

Having said that, I’m not going to pay for online content. I’ve been getting it for free since the mid-1990s and I’m not about to start paying now for every article or site I devour. Same applies for music and movies: I watch and listen to whatever’s legally free, and that’s more than enough for me.

And like most humans, I don’t pay much attention to online advertising. Content publishers are well aware of this. They’re not happy about it, but they know.

So what is a possible source for the money to pay all of these journalists, and content generators in general?

Lars Bastholm, the recently installed chief digital creative officer for advertising/marketing/PR behemoth Ogilvy North America, just wrote a column for BusinessWeek that is possibly the most cogent and sensible analysis of what he calls the pervasive “content crisis” that I have yet seen.

Will online advertising ever save the day? “The idea that advertising can support the entire content industry is a fallacy,” he says, and I agree.

With online advertising a permanent non-starter, Bastholm says content companies remain unfortunately transfixed by the concept of micropayments, which he rightly debunks as pure, fantastical, wishful thinking.

He considers a federal tax or fee for TV and internet usage that would be distributed to content providers, much like what has been levied in European nations for years, but rightly concludes that such a scheme could never, ever, EVER work in America. Consider the vitriol currently being spewed about something as sensible as nationalized health care. Now extrapolate that to, “These socialists ain’t gonna make me pay for my teevee and my interwebs!” Like I said, no American politician would ever advocate such a plan.

Essentially, he then asks: Why not do the truly American thing and let private corporations subtly tax you to death? The thing is, this de facto tax would be something I would gladly pay in order to provide livelihoods for creative Americans.

Bastholm suggests the mobile web and broadband providers add another charge to their already complex bills: say, $10 per month to support the delivery of internet content. The content would still be free; your access to it would be further charged.

Now, no one wants to pay MORE for their cable or phone bills, especially these days, but some PR and advertising for these programs that explains what will happen if no one can make a living any more producing the content you enjoy would be effective.

So where do these fees, which he estimates could be north of a billion dollars a month, go? How would they be distributed? Bastholm proposes a meritocracy of sorts that focuses both on the popularity and the type of content (movies cost more to make than text-based news stories, for example, so the distribution would be weighted to reflect that disparity). Such payments, he says, would be “based on a metric that people better at math than I am will figure out. But the principle is simple: You get paid based on how many people like your stuff.”

In the process, the whole business of advertising, he says, will be blown up and reassembled to better suit this new paradigm. Instead of being a “necessity,” it becomes an “elective” source of revenue. As a result, he expects advertising to become much more interactive, compelling and (gasp) hopefully even enjoyable for the user.

This article raises more questions than it answers, but I really like the general idea Bastholm proposes. Especially if it keeps journalists, filmmakers, musicians and others fed, clothed and sheltered. Maybe they’d even have healthcare. But that’s an argument for another day…

Posted by Joe Paone