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I've heard this many times before, but it is largely irrelevant. Consumers believe they are paying for the content. They pay $30 a year and get 12 issues. It

by fnid2 17y ago

I've heard this many times before, but it is largely irrelevant. Consumers believe they are paying for the content. They pay $30 a year and get 12 issues. It's like saying the shopper doesn't pay for the lettuce, she's paying for the transportation of the lettuce. All the costs and all the revenue ultimately go on the same side of the line -- either you are profitable or you aren't. Which makes me wonder if the HuffPost is profitable. I think they aren't: "While traffic is surging at the HuffPo," Hippeau told an audience at the OMMA conference earlier this week that rates for CPM-based advertising are nearing "zero." http://www.beet.tv/2009/09/huffington-post-ceo-revenue-must-match-sites-traffic.html?no_prefetch=1 http://www.beet.tv/2009/09/huffington-post-ceo-revenue-must-... The HuffPo is not immune to the problems facing the industry and they don't also distribute via print. How are they going to survive. I wonder how all of a sudden, the HuffPost, which is living on a $25 Million investment is the expert on how to be a profitable online distributor and creator of content. They are struggling too and thumbing their nose at the traditional establishments. Before I take their side, I'd like to see some evidence that they know what they are talking about. I'm not sure they do and I'm not sure they will outlive the nytimes who trounces them in the online content space. The NYTimes gets online more than any other publication I have seen and they seem to understand the web as a delivery mechanism way more than the huffpost.

eli 17y ago
NYTimes has a fantastic website, but it doesn't make any money either.
- greyman 17y ago
  Why not? Just asking... For example, in Slovakia the top two online news websites are profitable. One has also a print daily, the other one is online-only.
  - eli 17y ago
    Well, it's free to read the website and they haven't quite figured out how to make much on the ads. It's extremely difficult to make enough money off ads to support a world-class team of reporters (or even just a world-class web team!) People have written many books on this stuff, but I personally don't think it's even possible to make as much off ads online as they used to make off print a few decades. On top of that, the NYTimes biggest advertisers used to be national retailers, auto retailers, real estate, and finance companies. Those also happen to be the sectors hardest hit by the current recession.
tcdent 17y ago
You haven't taken the analogy far enough. The shopper isn't paying for lettuce because it's lettuce, they're paying for it because of the nutrients it provides. Just as I don't pay $30 a year for the shipping costs of the subscription, I (at least I believe) pay for the information it contains. The disconnect here is the use of a traditionally free (as in beer) medium as a replacement for the use of a real, valuable commodity.
- qaexl 17y ago
  Others here might have heard this many times before, but this is first time I've heard of it. It clears up a lot of confusion I'd have in thinking about this. I think one of the commenters is right in that people believe they are paying for a content. I think what's going on is a sort of a leaky abstraction -- what consumers believe they are paying for (content) is different from what how they actually act. Or put in another way, the features (the content) differs from the benefits (the distribution). I don't think the follow-up conclusion -- that this represents an opportunity to get consumers to pay for content -- is the way to go forward. It sounds almost apologetic. Sunk cost fallacy. I'm mulling over extrapolations of this, applied to SAAS, cloud computing, and fremium web apps. I'm thinking of the telco's resistance to being relegated to what they actually are -- a dumb pipe -- and using lobbying pressure. I'm thinking of how much I'm sold on Steam (mainly because, I don't have to keep track of all those CDs/DVDs anymore). I'm thinking of Kevin Kelly's idea on the "Technium". Like many models, there are limits to this one, but right now, it seems the possibilities are wide open.

by fnid2 17y ago

eli 17y ago

NYTimes has a fantastic website, but it doesn't make any money either.

greyman 17y ago
Why not? Just asking... For example, in Slovakia the top two online news websites are profitable. One has also a print daily, the other one is online-only.
- eli 17y ago
  Well, it's free to read the website and they haven't quite figured out how to make much on the ads. It's extremely difficult to make enough money off ads to support a world-class team of reporters (or even just a world-class web team!) People have written many books on this stuff, but I personally don't think it's even possible to make as much off ads online as they used to make off print a few decades. On top of that, the NYTimes biggest advertisers used to be national retailers, auto retailers, real estate, and finance companies. Those also happen to be the sectors hardest hit by the current recession.

tcdent 17y ago

You haven't taken the analogy far enough. The shopper isn't paying for lettuce because it's lettuce, they're paying for it because of the nutrients it provides. Just as I don't pay $30 a year for the shipping costs of the subscription, I (at least I believe) pay for the information it contains. The disconnect here is the use of a traditionally free (as in beer) medium as a replacement for the use of a real, valuable commodity.

qaexl 17y ago
Others here might have heard this many times before, but this is first time I've heard of it. It clears up a lot of confusion I'd have in thinking about this. I think one of the commenters is right in that people believe they are paying for a content. I think what's going on is a sort of a leaky abstraction -- what consumers believe they are paying for (content) is different from what how they actually act. Or put in another way, the features (the content) differs from the benefits (the distribution). I don't think the follow-up conclusion -- that this represents an opportunity to get consumers to pay for content -- is the way to go forward. It sounds almost apologetic. Sunk cost fallacy. I'm mulling over extrapolations of this, applied to SAAS, cloud computing, and fremium web apps. I'm thinking of the telco's resistance to being relegated to what they actually are -- a dumb pipe -- and using lobbying pressure. I'm thinking of how much I'm sold on Steam (mainly because, I don't have to keep track of all those CDs/DVDs anymore). I'm thinking of Kevin Kelly's idea on the "Technium". Like many models, there are limits to this one, but right now, it seems the possibilities are wide open.