As much as I like the views of Jeff Jarvis, I do not like his views on monetization. He basically says that content has to operated at a loss.
Jeff Jarvis recently wrote (in relation to Conde Nast monetization plans):
[Conde Nast] They're not wrong that they need to get money from consumers but they're not going to get it for content. Sorry guys.
Instead, I suggest they have to get new revenue through commerce through selling the things they once advertised now that advertisers are deserting them to sell direct.
We hear the same from many other sources. Chris Brogan recently wrote about blogs being operated as at loss. And he compared it to how store creates special discounts, to get people into the stores:
Stores use loss leaders all the time. Sell nylons to ladies at cost and get them to buy the high markup stuff, too. That's how Sam Walton (Wal-Mart fame) made all his money, by the way.
This is where it all starts to go wrong.
Wal-Mart does not operate a certain category of products at a loss. Sure they have promotions. "Buy a Maybelline box, and get a pair of Nylons for free." but that is a limited offer for a limited time. Next week, they do the same thing with other products, but they never operate an entire product category at a loss.
You don't expect nylons to be free forever. You don't expect that all nylons, from any manufacturer should be free. Nor do you go to other department stores and demand to get their nylons for nothing.
If we did, the result would be disastrous. If everyone suddenly expected nylons to be free, the nylon industry would practically go out of business. The quality disintegrates into the cheapest nylons China can make
No industry can survive on being run at a loss.
But this is what is happening to content. We are now close to a point where it is impossible to operate as a content industry.
If content merely becomes a freebie attached to other things, the content industry is reduced to companies like Demand Media, which produces a massive amount of content, at very low quality, and at a very low price.
What's next? TV Shows? Should TV networks operate TV shows at a loss, and instead make their money of online web shops selling products featured in the shows? No. If they did, TV would turn into the Demand Media model too. Low quality crappy TV, but good enough to be used to sell products in associated web shops.
What about books? Should authors write books at a loss too?
Where does it stop?
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I have no issues with Chris Brogan running his blog at a loss, because it helps him secure clients for his media business. That's the freemium model, and works great.
But, I have an issue with people demanding that all content should be run at a loss. That's not healthy. It's not even logical.
If you ask people if they think nylons, milk, gas, broadband etc. should be free, many would say yes. That doesn't mean they are right.
Stop giving your away content for free, and start making money. No matter how you look at it, content must have a positive ROI.
There are many ways you can do that:
There are also a number of monetization options not linked directly to the content
And, there are a number of models that are doomed to fail
The bottom line: If you do not have a positive ROI, your content strategy is just a hobby!
The traditional media industry is in the middle of its biggest crisis, but the content industry isn't. The money is still there; people pay more than ever for content. You just need to make the right product.
On the internet, supply is infinite. Once an article is posted, everyone can read it. The traditional model of duplicating and republishing content provides "N times infinite" supply online. That's just waste.
It's like being one person and having a thousand bathrooms in your house. You just need one.
The media industry, as a whole, has to come to terms with that. If you are not unique, you don't have a business. Some newspapers do seem to understand this. The Guardian (which Jeff Jarvis writes for) is one of them, The New York Times is another.
But most doesn't seem to get it-and continue to produce a package of copied news.
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