Newsletter #92 Publishing Online - Is There a Model?

Created on 26/10/04

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The last newsletter (16th September, 2004) was "Newsletter #91 Domain Name Strategies"

It's over four years since I wrote #32 Changing Publishing Forever and it's perhaps time for a review of where online publishing is in late 2004.

There are a number of methods that publishers are using to profit from their content:

Advertising

Eric Picard of Bluestreak puts it nicely: "There's always been a contract between advertiser, media company, and consumer. The consumer puts up with advertising that pays for free or inexpensive content so long as the advertiser and media company respect the fact their economy lives at the fickle whim of the consumer."

Paid-for advertising is the way that traditional media made money and of course when the Internet came along, it was assumed that the new media would follow in the same manner. There have been complications however. After a honeymoon period, Internet users learnt to subconsciously screen out banner and other advertisements, sending click through rates through the floor. There have been popups, popunders, skyscrapers and all manner of variations to attract users but it is only over the last year that advertising revenues have rebounded.

One of the big problems with advertising online is that works better for the highly trafficked sites. Less popular Websites struggle to make money from advertising as there is so much available real estate.

Yearly Subscription

Again from traditional media this method has been modified somewhat. Many sites offer only part of their content for free but allow only paying users to view the premium stuff. As AmericanGreetings.com Chairman Charlie Fink says "Free content is the river from which we draw our paying subscribers."

In an interesting recent announcement The Wall Street Journal Online, one of the bastions of the subscription model, has announced that on November 8th it will make all its content available for five days for free. With over 700,000 paid subscribers analysts think that WSJ.com may be testing to see if the site could be ad-supported.

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Micropayments

iTunes has given a boost to those who feel that micropayments are the future for Web commerce. The Apple site charges US$0.99 for a song and has recently hit 150 million downloads in just 18 months in operation.

However doubters like Clay Shirky say that people will pay for content they already know (songs) but that micropayments will never take off as even small payments create "mental transaction costs" (term from Nick Szabo), which is the energy required to work out whether something is worth paying for or not. These mental transaction costs create a minimum level of discomfort or inconvenience that are a barrier to this form of commerce.

For example if I said it would cost you US$0.50 to read this article (assuming it was a seamless process), would you do so or pass it by? Hey let me know!

Donations

One of the more intriguing options for online publishers is the donation model. Here, typically small publishers ask for donations rather than setting a fixed subscription level.

Vin Crosbie, managing partner of Digital Deliverance gives the example of Brian Livingston, author of Brian's Buzz. Brian decided to have a free and a paid version and thought that $9.95 per annum would be a reasonable price. However instead of making it a fixed sum he asked paid subscribers to donate what they thought it was worth. The average subscription value was $15.42.

The truth is that there is not a single model for making money online from content, but consider this:

• Highly popular sites would be best served by a combination of advertising and subscriptions for added value services.
• For smaller operators the donation model seems is more in tune with the way the Web works - customers decide.
• As for micropayments, I'll have to lean towards Clay Shirky's view - not in the foreseeable future.

Newbies

Power Users

If you often want to check that a new web site is working one way to do this is to ping the site. However, there are times when you can't access a new site using your current ISP's DNS. When this happens, you can try to ping with another DNS. Fifi.org is a site that you can use to ping Internet addresses and you can also run a trace.http://www.fifi.org/services/

For previous tips visit the Power Hot Tips page.

Google moves to your PC with Google Desktop available in a beta-test form at for Windows 2000 and XP. Once installed, it quickly builds a database of the non-system files on your computer's hard drive, then indexes the contents of many commonly used types of files. Webpages viewed in Internet Explorer, email read in Microsoft's Outlook and Outlook Express, America Online instant messages, Microsoft Word, Excel and PowerPoint files, and text files.http://desktop.google.com/

Build your own pulsejet or turbojet engine! Professional inventor and tinkerer Bruce Simpson tells how on this site that is full of information. http://aardvark.co.nz/pjet/

No new articles this month.

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Best wishes

Alex Garden

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