A friend of mine, Sahar Sarid, posted an interesting assertion about the future of blog business models (Sahar has an elegant mind, and his new blog Conceptualist is sure to be a great read):
Newspapers – Free (or no business model) (pre 1704), Advertising (1704, The Boston News-Letter), Subscription (1893, Frank Munsey)
Radio – Free (or no business model), Advertising (1909, Charles Herrold)), Subscription (XM, Sirius)
Television – Free (or no business model), Advertising (1941), Subscription (Cable TV, HBO, DirecTV, Showtime)
Blogging – Free (or no business model), Advertising (Federated Media, Adsense), ……. ?It’s… inevitable.
Sahar’s historical analysis is certainly compelling. If other media ultimately adopted a paid content model, why not blogging? I agree that there is fairly strong case that some blogs may ultimately be able to adopt a paid model, but there is an equally strong case why most blogs will not.
The case for paid subscription blogs is the same as the case for any other paid content:
1) Must have
2) Not available elsewhere or better than what you can get for free
3) No ads (although not necessarily)
All you have to do is look at the top blogs to see examples of blogs that might be able to charge for their content, e.g., Engadget, Gizmodo, GigaOm, TechCrunch, Problogger, Seth Godin, TMZ, Ars Technica, PaidContent. (I am purposely not mentioning The Blog Herald to avoid a conflict of interest.)
What distinguishes these blogs is that they address either deep personal passions, e.g. Engadget, TMZ, or professional interests, e.g. TechCrunch, Ars Technica. What distinguishes Seth Godin’s blog is that he is a paid speaker and consultant, so paying to subscribe to his blog might be likely paying for a syndicated version of his consulting advice.
The issue of whether any paid content online is “better than what you can get for free” has been debated since the dawn of the Web. What arguably makes some of the top blogs better than other blogs is that, by dint of their success, they have become scoop magnets, e.g TechCrunch, Engadget. That doesn’t necessarily make their reporting or analysis better, but you can always get the information there first. Of course, if they were behind a pay wall, that advantage might disappear.
That’s why the Seth Godin consultant model might be more viable. Darren Rowse at Problogger, for example, offers advice to bloggers equivalent to what you might get from a paid consultant.
The argument against a paid content model for blogging begins of course with ideology — there are many blog purest who would refuse to call a paid blog a blog. Blogging, traditionally, has been about openness and inter-connectivity, which a paid subscriber wall certainly does not foster.
The more interesting argument I think begins with looking at the potential flaws in Sahar’s historical analysis. First, the Web has been around for more than a decade, with arguably an accelerated maturity timeline, and most content online is still free, paid for by advertising. Second, the long-term viability of paid radio is still untested. Lastly, and perhaps most important, the digital media revolution is poised to disrupt all existing paid media business models. Paid newspaper circulation, for example, is in free fall because the same news and information is available for free online.
Google is an important bellwether — if YouTube continues to pursue an advertising-based business model for online video, that will put pressure on paid video content business models.
That said, there was a study released a couple weeks ago that predicted that paid video would far outpace ad supported video:
Consumer spending on video downloads will rise to $4 billion a year in 2011 from the current $111 million spent annually, according to a study by Adams Media Research. Adams predicts that the growth will be fueled by increased broadband penetration and the introduction of devices such as Apple TV, which allows users to watch PC downloads on TV. The market researcher is already forecasting huge gains this year for video download sales. By the end of 2007, Adams Media is predicting sales totaling $472 million, then rising to $1.2 billion in 2008, $2 billion in 2009, $3.1 billion in 2010, then hit $4.1 billion in 2011. It also foresees advertiser spending on internet video streams to PCs and TVs approaching $1.7 billion by 2011.
The question of whether paid content is a viable business model for blogging is most likely intertwined with the future of paid content in a digital media world — and the question of business models is THE burning question for the future of media.
Scott Karp’s blog, Publishing 2.0, is free and open, with some advertising.