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Ok, education time. You may not like ads but they heavily subsidize great content. In fact, the price of a New York Times subscription would be close to $1,500

Ok, education time. You may not like ads but they heavily subsidize great content. In fact, the price of a New York Times subscription would be close to $1,500 per year if it weren't for advertisers keeping it closer to $300 (and that's if all their existing subscribers could even afford it). Alexander Hamilton (newspaper owner, secretary of the treasury, founder of the Bank of New York) said: "It is the advertiser who provides the paper for the subscriber. It is not to be disputed, that the publisher of a newspaper in this country, without a very exhaustive advertising support, would receive less reward for his labor than the humblest mechanic." The fact is people dramatically underestimate what it costs to produce high quality content and that as a rule you'd need to spend much more than you'd expect to have access to it. Advertising has essentially made information free or cheap for the user for a long time. Just because you think ads are ugly and annoying doesn't change this fundamental reality.

atmosx 13y ago
Yes I totally got that when Newsweek published an article called "In defense of Goldman Sachs" came out the day after their 2009 bonuses were made public. Of course there was nothing in the world to defend GS (or Newsweek for the matter who got sold for 1 USD a couple of weeks later IIRC). I killed my subscription the next day. I guess if GS wasn't sponsoring, the article would never have appeared or made frontpage, but it did. The current "advertising model" leaves most newspapers open to foreign interests which go against press freedom almost all the time. That's why WikiLeaks published more interesting content in 5 years and made more scoops than the entire western press in ~ 30 years or so. In this new Digital Age, the Press needs to find a new model - which mind you, I don't have a clue what exactly should be, since advertisement is what GENERALLY makes the world go round - or face extinction.
- mahranch 13y ago
  "In this new Digital Age, the Press needs to find a new model" It did. In this digital age, small time publishers and blogs can now have an audience thanks to advertisers. If they're popular and providing great content they will, at minimum, make enough to cover the cost of hosting. They have a potential viewership of 6 billion people. Without advertisers, this just wouldn't exist. The internet would be different at the fundamental level. Most people severely underestimate what advertisers bring to the table in terms of enabling content producers.
  - atmosx 13y ago
    That's nothing, that's like microwave heated food. In Greece you can buy newspapers (paper or digital). You'll see ads from banks, drinks and state-owned organizations (Lottery games, etc.). So basically they are financed from the very same people they should be exposing, that's why in 40 years of bank-state back-channeling and corruption no one has ever been seriously exposed. Not to mention that freedom press in Greece 84th between Togo and Kosovo. Note that USA is 32 and UK is 29, not exactly freedom champions. It's not because they kill journalists, they fire them :-) You see the problem? [1] http://en.wikipedia.org/wiki/Press_Freedom_Index http://en.wikipedia.org/wiki/Press_Freedom_Index
geminitojanus 13y ago
This fact is why newspapers are dead, and online content continues to blossom. In the information age, there's absolutely no excuse for the content they produce to cost $1500/year per subscription. In fact, that's where we hit the real problem: the kind of content that is covered with advertisements is usually not very good content to begin with. This is especially true of content aggregators and meta sites such as Reddit and to some extent, this website. The content isn't even theirs: they are simply hosting a discussion forum about the content. A new-agey one instead of the old BB sites, but it's nonetheless exactly the same. What content providers should be learning is that people are willing to pay for good content. Quality absolutely matters. The 90s and 00s were all about quantity, but now we're up to the rafters with disposable content. Look at the shows with the best ratings today: Game of Thrones, Mad Men, Breaking Bad. Exceptional content quality, heavily pirated because the content creators have failed to adapt to new media distribution. The fact that I can torrent GoT more easily than I can view it from HBO is tragic. So there's your dose of education for the day.
- tedsanders 13y ago
  I'm trying to learn more about this issue. Could you elaborate on the evidence for people willing to pay for good content? I know almost no one who pays for TV a la carte through iTunes or Amazon. I also don't understand why Game of Thrones supports your argument. Of course the shows that are pirated the most will be the ones that are (1) popular and (2) expensive or hard to access. And of course if those shows were cheaper they'd be pirated less. But I don't see how that relates to the idea that people are willing to pay for good content. My roommates pirate GoT, but I am skeptical they'd pay even if it was available for $4.99 an episode.
  - geminitojanus 13y ago
    > Could you elaborate on the evidence for people willing to pay for good content? I also don't understand why Game of Thrones supports your argument. http://bit.ly/1mLgOc3 http://bit.ly/1mLgOc3 > I know almost no one who pays for TV a la carte through iTunes or Amazon. You now know of me. I spend around $50/month downloading content from Amazon, be it music or tv. I would buy Game of Thrones as it came out if I could, but I can't. Absence of evidence isn't the evidence of absence. Especially if you've done no investigation. >I am skeptical they'd pay even if it was available for $4.99 an episode. $5 might be a bit steep for some, $2-3 is just about perfect. But honestly I'd still pay $5 for content created at this level, if not just to encourage the people creating this quality of content to keep doing it. Your skepticism is powered by your lack of knowledge and research. Do the work, then come back and comment.
rayiner 13y ago
Advertisers don't pay media companies out of the goodness of their hearts.
Alex3917 13y ago
"It is the advertiser who provides the paper for the subscriber. It is not to be disputed, that the publisher of a newspaper in this country, without a very exhaustive advertising support, would receive less reward for his labor than the humblest mechanic." This doesn't make sense. My understanding is that newspapers weren't primarily ad-supported until the 1920s, when new technologies enabled nationwide economies of scale for both newspapers and ad buyers. Is this not correct?
- jeremymims 13y ago
  Newspapers were largely ad driven since their "modern day" inception in the early 1700's. I'm going to need to write a blog post about this since I'm seeing so much confusion about how we got where we are and why we've ended up with ad models we have. It may take me a month or two to get to, but I think this community would benefit greatly from it.
emillon 13y ago
> the price of a New York Times subscription would be close to $1,500 per year if it weren't for advertisers keeping it closer to $300 The fact that this model works well on dead-tree newspapers, does not mean that it should be copied on the internet. We have tools to customize how sites are displayed, ads shouldn't be a sacred exception.
rimantas 13y ago
The thing is there are people who won't click on ads no matter what. So in case it is pay-per-click showing ads will accomplish nothing. In case of pay-per-view it is just a waste of you and advertisers money. Maybe they are ok with that, but I am not obliged to help.
tanzam75 13y ago
> You may not like ads but they heavily subsidize great content. In fact, the price of a New York Times subscription would be close to $1,500 per year if it weren't for advertisers keeping it closer to $300 (and that's if all their existing subscribers could even afford it). ??? You are off by a factor of 3, given that you're assuming no elasticity of demand. In the last quarter, the New York Times obtained 46.8% of revenues from circulation, 47.8% from advertising, and 5.4% from other. Once upon a time, newspapers had more advertising revenue. But today, they're already well on their way to a world of digital nickels, where they have to get their bulk of revenues from subscribers.
doesnt_know 13y ago
I seriously question the figures you've stated, but either way, it's not comparable to this situation. Reddit doesn't create content. Reddit is a content aggregation service just like HN. You could probably make the argument that some subreddits generate content, which I would not disagree with, but Reddit doesn't pay for that content creation. Also, plenty of blogs aren't ad supported, or aren't primarily ad supported. I can't remember the last time I visited a "popular" blog and they didn't have an ebook or some other form of merchandise for sale. It seems to me that those that are most reliant on advertisements are those that house communities or just regurgitate content from other sources. If those sites all died tomorrow, I probably wouldn't care. (That includes HN and Reddit).

atmosx 13y ago

Yes I totally got that when Newsweek published an article called "In defense of Goldman Sachs" came out the day after their 2009 bonuses were made public. Of course there was nothing in the world to defend GS (or Newsweek for the matter who got sold for 1 USD a couple of weeks later IIRC). I killed my subscription the next day. I guess if GS wasn't sponsoring, the article would never have appeared or made frontpage, but it did. The current "advertising model" leaves most newspapers open to foreign interests which go against press freedom almost all the time. That's why WikiLeaks published more interesting content in 5 years and made more scoops than the entire western press in ~ 30 years or so. In this new Digital Age, the Press needs to find a new model - which mind you, I don't have a clue what exactly should be, since advertisement is what GENERALLY makes the world go round - or face extinction.

mahranch 13y ago
"In this new Digital Age, the Press needs to find a new model" It did. In this digital age, small time publishers and blogs can now have an audience thanks to advertisers. If they're popular and providing great content they will, at minimum, make enough to cover the cost of hosting. They have a potential viewership of 6 billion people. Without advertisers, this just wouldn't exist. The internet would be different at the fundamental level. Most people severely underestimate what advertisers bring to the table in terms of enabling content producers.
- atmosx 13y ago
  That's nothing, that's like microwave heated food. In Greece you can buy newspapers (paper or digital). You'll see ads from banks, drinks and state-owned organizations (Lottery games, etc.). So basically they are financed from the very same people they should be exposing, that's why in 40 years of bank-state back-channeling and corruption no one has ever been seriously exposed. Not to mention that freedom press in Greece 84th between Togo and Kosovo. Note that USA is 32 and UK is 29, not exactly freedom champions. It's not because they kill journalists, they fire them :-) You see the problem? [1] http://en.wikipedia.org/wiki/Press_Freedom_Index http://en.wikipedia.org/wiki/Press_Freedom_Index

geminitojanus 13y ago

This fact is why newspapers are dead, and online content continues to blossom. In the information age, there's absolutely no excuse for the content they produce to cost $1500/year per subscription. In fact, that's where we hit the real problem: the kind of content that is covered with advertisements is usually not very good content to begin with. This is especially true of content aggregators and meta sites such as Reddit and to some extent, this website. The content isn't even theirs: they are simply hosting a discussion forum about the content. A new-agey one instead of the old BB sites, but it's nonetheless exactly the same. What content providers should be learning is that people are willing to pay for good content. Quality absolutely matters. The 90s and 00s were all about quantity, but now we're up to the rafters with disposable content. Look at the shows with the best ratings today: Game of Thrones, Mad Men, Breaking Bad. Exceptional content quality, heavily pirated because the content creators have failed to adapt to new media distribution. The fact that I can torrent GoT more easily than I can view it from HBO is tragic. So there's your dose of education for the day.

tedsanders 13y ago
I'm trying to learn more about this issue. Could you elaborate on the evidence for people willing to pay for good content? I know almost no one who pays for TV a la carte through iTunes or Amazon. I also don't understand why Game of Thrones supports your argument. Of course the shows that are pirated the most will be the ones that are (1) popular and (2) expensive or hard to access. And of course if those shows were cheaper they'd be pirated less. But I don't see how that relates to the idea that people are willing to pay for good content. My roommates pirate GoT, but I am skeptical they'd pay even if it was available for $4.99 an episode.
- geminitojanus 13y ago
  > Could you elaborate on the evidence for people willing to pay for good content? I also don't understand why Game of Thrones supports your argument. http://bit.ly/1mLgOc3 http://bit.ly/1mLgOc3 > I know almost no one who pays for TV a la carte through iTunes or Amazon. You now know of me. I spend around $50/month downloading content from Amazon, be it music or tv. I would buy Game of Thrones as it came out if I could, but I can't. Absence of evidence isn't the evidence of absence. Especially if you've done no investigation. >I am skeptical they'd pay even if it was available for $4.99 an episode. $5 might be a bit steep for some, $2-3 is just about perfect. But honestly I'd still pay $5 for content created at this level, if not just to encourage the people creating this quality of content to keep doing it. Your skepticism is powered by your lack of knowledge and research. Do the work, then come back and comment.

rayiner 13y ago

Advertisers don't pay media companies out of the goodness of their hearts.

Alex3917 13y ago

"It is the advertiser who provides the paper for the subscriber. It is not to be disputed, that the publisher of a newspaper in this country, without a very exhaustive advertising support, would receive less reward for his labor than the humblest mechanic." This doesn't make sense. My understanding is that newspapers weren't primarily ad-supported until the 1920s, when new technologies enabled nationwide economies of scale for both newspapers and ad buyers. Is this not correct?

jeremymims 13y ago
Newspapers were largely ad driven since their "modern day" inception in the early 1700's. I'm going to need to write a blog post about this since I'm seeing so much confusion about how we got where we are and why we've ended up with ad models we have. It may take me a month or two to get to, but I think this community would benefit greatly from it.

emillon 13y ago

> the price of a New York Times subscription would be close to $1,500 per year if it weren't for advertisers keeping it closer to $300 The fact that this model works well on dead-tree newspapers, does not mean that it should be copied on the internet. We have tools to customize how sites are displayed, ads shouldn't be a sacred exception.

rimantas 13y ago

The thing is there are people who won't click on ads no matter what. So in case it is pay-per-click showing ads will accomplish nothing. In case of pay-per-view it is just a waste of you and advertisers money. Maybe they are ok with that, but I am not obliged to help.

tanzam75 13y ago

> You may not like ads but they heavily subsidize great content. In fact, the price of a New York Times subscription would be close to $1,500 per year if it weren't for advertisers keeping it closer to $300 (and that's if all their existing subscribers could even afford it). ??? You are off by a factor of 3, given that you're assuming no elasticity of demand. In the last quarter, the New York Times obtained 46.8% of revenues from circulation, 47.8% from advertising, and 5.4% from other. Once upon a time, newspapers had more advertising revenue. But today, they're already well on their way to a world of digital nickels, where they have to get their bulk of revenues from subscribers.

doesnt_know 13y ago

I seriously question the figures you've stated, but either way, it's not comparable to this situation. Reddit doesn't create content. Reddit is a content aggregation service just like HN. You could probably make the argument that some subreddits generate content, which I would not disagree with, but Reddit doesn't pay for that content creation. Also, plenty of blogs aren't ad supported, or aren't primarily ad supported. I can't remember the last time I visited a "popular" blog and they didn't have an ebook or some other form of merchandise for sale. It seems to me that those that are most reliant on advertisements are those that house communities or just regurgitate content from other sources. If those sites all died tomorrow, I probably wouldn't care. (That includes HN and Reddit).