When Consumers Are Not Clients

Michael Wagner made some interesting points about the true cost of “free media” on the web. The basic reminder that “There Ain’t No Such Thing As A Free Lunch” (TANSTAAFL) is important on the web, since we’re always giving something up, from our attention (on ad-supported sites) to our private demographic information (eg. with “free” Facebook quiz applications).

It’s an especially good point that there’s a difference between the consumers of these media products and the clients of the media companies. This isn’t really new, though. What’s really happened is that as each new medium has become mainstream, it’s become a medium for sales as well as communicating news. Originally it was all verbal–town criers screaming out news, peddlers shouting out to persuade buyers. Then much later it was print media, which only caught on when enough people learned to read. Newspapers have been funded by advertising for many years. The small fee we pay to buy a newspaper is largely a token to prove to advertisers that we’re actually reading the paper. It’s the advertisements that pay for bulk of the paper itself–the journalists, the editors, the photographers, the physical location, the printing itself, and the distribution costs.

The same goes for TV programming, and now the model has moved online. The only major difference is that with newspapers and TV, we were a captive audience. Now the fight for consumers’ attention has intensified, in part because of media saturation, but also because we have so many options to fight back. The fact that we can install ad blockers is part of that fight, just as is the ability to fast forward through commercials.

But the other problem is that it’s still a young medium, and the harder advertisers fight for our attention with pop-ups and messages flying across windows, the more desensitized we become. The ads have become more obnoxious but click-through rates have continued to drop steadily. This is in part because, with sites deriving all of their revenue from ads, they have a continual incentive to encourage their users to be distracted by them.

And that’s not infinitely sustainable. However, I disagree with Michael’s assertion that paid models are the right way to go. What really makes sense is what has become increasingly standard across the web: the freemium model, where the basic essential service of a web site is offered for free, but users can sign up for premium services. Often those services are more business-oriented, or simply give the user an ad-free experience.

It’s essential on the web because we’ve gone beyond channel surfing: it’s not just cheap to switch web pages like TV channels, it’s actually hard for users to stay focused on a single web page for any length of time because there are a practically infinite number of other web pages that can waste our time.

Finally, Wagner makes a good point about how news media are driven by what will attract more viewership for their advertising, rather than what is truly newsworthy. Michael Jackson’s passing is arguably an example of this, with stories about the (admittedly highly influential) pop icon bumping out important political news. But this has also always been true to some degree: newspapers publish stories that sell papers. And just as before, some of us choose to buy papers and magazines that cover stories of real merit. It’s a kind of addendum to the freemium model, that rare sites such as the Wall Street Journal offer such perceived value to a wealthier audience, that they’ve succeeded while requiring a paid subscription from the beginning.

In the meantime, the unlettered masses watch stories about Britney Spears, and enter private data into “fun quizzes” as red blinking airplanes fly across the screen urging them to “click now!’

4 comments for “When Consumers Are Not Clients

  1. August 24, 2009 at 1:59 am

    I’m not sure I was voting for a classical “paid model” for news. Certainly not all costs paid. I don’t recall any time in recent history that any reasonable sized news outlet had an all costs paid model.

    Even when I used to subscribe to the print edition of Time Magazine, say, or Scientific American, I can’t imagine my $50 or so a year covered more than about 10% of their costs. But … it meant that the editors had to acknowledge two customer groups. Most reputable news outlets published a statement of editorial independence from the advertisers. Seeming violations of that independence would be cause for a letter to the editor, something that was taken seriously.

    Now, with only one customer group (and it isn’t us), there’s no reason for editorial independence (and we’re seeing that there really is none for a lot of media).

    Perhaps freemium is a solution. I sort of doubt it, though. It seems to work well for certain sections of coverage (the stock market, perhaps, or expensive cars, or real estate) and not others. So perhaps those areas will exert some editorial independence. If freemium income is under 1% of total income, there’s no reason for the editors to even feign independence from advertisers. And so it won’t work, at least not in the sense I want it to.

    I don’t know what the solution is. I just know this isn’t working for me.

  2. August 24, 2009 at 4:48 am

    Good points. But I think there’s one point you made in particular that I’d expand on. You said that the $50 that you paid to Scientific American, small though it was, was enough to keep you “on the radar” as a consumer of the magazine.

    But I’d say that it was your eyeballs that kept you on the radar. Since these media are paid for by advertisers, they need readers (or viewers) in order to attract enough advertising revenue.

    I think that the missing link here is that this is often not enough. We can talk about users “voting with their feet” to use their influence as potential eyeballs for ads, but they have to be aware that they’re missing something in the first place. But again, I think that this is improving overall with the web because of all the independent bloggers. One of the easiest ways for bloggers to get noticed is by creating controversy or disagreeing with influential people.

  3. August 27, 2009 at 2:37 pm

    I’d like to believe that bloggers could make a difference. I guess mostly because I am one. Maybe I’m biased.

    I think some stuff coming out of the blogosphere makes an impact. HuffPo for one. Although sometimes they seem sensationalized too. I guess it’s too early to tell if they find their sea legs or are swept away.

    But much of the blogosphere is merely new-tech low-price vanity press. While it may be cheaper than therapy, it’s not really reporting or journalism or even particularly unbiased. Whether it can “grow up” and become a real replacement for current news outlets is unclear

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