Moving web ops up the priority chain

Mark Glaser asks the musical question “Is there a bubble brewing?” in an interesting Online Journalism Review piece today. The article features the thoughtful views of investment banker (and PaidContent columnist) Tolman Geffs:

I think the idea of everything a newspaper writes being available online for free will be regarded as a thing of the past. AP rip-and-read will continue to be free, but value-added, local, feature reporting, columnists — those will move behind a pay wall…You just can’t support the cost of that newsroom and maintain that journalistic quality without subscription revenue.

That’s a broader issue as well that the major media companies are facing. They are reshaping their business models around the Web. Their previous models involved moving their offline content online, so that is 90 percent New York Times content. The same is true at the IBS sites I used to run. The content comes from WNBC. That’s a good business, but not a profitable enough business [to counteract] the profit squeeze at the parent company. I think these folks will be moving even more aggressively online, and that’s what they’re doing to lift their online revenue growth above the trend line and it will help offset the profit pressure on the core business.

…I think the more profound thing you’re going to see is them looking to either buy or create original content online, because ultimately content is king, and the audience and advertising follows original content. I think a lot of these companies are going to be focusing much more resources on creating original content and original programming online.

It won’t be long before newsrooms of all kinds begin the day thinking about serving their online, unbundled components BEFORE creating their bundled products. We just can’t expect to build a scalable business model with afterthought content.

I agree with Mr. Geffs that simple repurposing of content will never feed the corporate beast, and I think he’s right that newspapers will drift to a subscriber model. It won’t work, however, because the economics just don’t make sense. You simply cannot scale Web subscriptions to the point where it will feed the operation of a newspaper. The demand simply isn’t there.

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