Study: 33 Percent of Digitalist Bloggers Would Pay Steven Brill to Just Go Away
Posted by Greg on June 26, 2009
I don’t want to keep blogging about paid content and micropayments; the concepts have been dumped on enough throughout the blogosphere, including right here. But when I read all the respectful MSM coverage still being given to Steven Brill’s Journalism Online, I start feeling like Will Ferrell’s character in Zoolander. I mean, why is anyone still listening to this guy? Am I taking crazy pills?
Brill had a couple business successes earlier in his career, including American Lawyer and CourtTV. But in the past two decades, he’s been far more famous for his flops: Brill’s Content, Contentville and, just this past week, airport-verification service Clear.
I don’t mean to suggest that people should ignore Brill because not all of his ventures have panned out; even the best entrepreneurs can’t be expected to bat 1.000. No, people should ignore Brill because, the more he talks about his plans for paid content, the more it becomes clear just how clueless he is.
When I first heard of Journalism Online, I was definitely intrigued. While I was skeptical of most of the existing plans for monetizing content, I figured that if enough smart people take a whack at the problem, they will eventually come up with some innovative solutions. So if Brill wanted to experiment and try to save journalism, more power to him.
That view lasted right up until the moment a few months ago when I read Brill’s “secret” memo on his plan to save the New York Times. Specifically, this:
There would be a five cent charge to forward an article to someone else … This would either produce revenue from the widespread current “copying” of copyrighted material or encourage people to get their friends to become paying customers. In other words, these pass-alongs would become viral marketing that produces sales.
It’s true that this idea hasn’t been mentioned in more recent iterations of Journalism Online’s model. Perhaps someone sat Brill down and explained that a “referral fee” is generally when a business pays a customer for marketing their product, not the other way around. Or perhaps they pointed out that the Copy and Paste functions would dismantle any referral paywall faster than a buch of East Berliners with sledgehammers. Still, this wasn’t a half-baked idea Brill threw out in the midst of a brainstorm and then quickly dismissed as impractical; he actually thought enough of it to publish it on Romenesko.
OK, so has he learned anything in the past few months? On the basis of this week’s story in the Washington Post, I’d say not much. First of all, Brill still thinks that the way to save journalism is by making people pay for reduced functionality: “[Brill] reasons people will have less reason to stop buying the print editions if they can’t get as much online news coverage for free.” (Yet another paid-content advocate who wants to give readers the finger.)
Second, his projected conversion rate of 10 percent of all online readers to paid is what the Post charitably terms “optimistic” (I would have gone with “delusional”). As the article notes, most industry studies put the rate at around 2 percent. Coincidentally, that’s about the rate at which my company has upgraded users to our premium membership, although I should point out that we serve a niche audience and that our membership includes a number of discounts on top of premium articles, whereas Brill is talking about content-only subscriptions across an entire industry. I’d be very curious to see how well Journalism Online’s profitability model holds up if you reduce that conversion rate by a factor of five, or even 10.
[Harmonic hack convergence update: Turns out that 10-percent figure comes from a study by Penn, Schoen & Berland. That's Penn as in Mark, erstwhile Hillary Clinton strategist and proponent of the theory that bloggers are taking over the world. Or was it snipers?]
Patrick Thornton said
Unfortunately, because Steve Brill has had past success and is kind of “one of them,” all these old media types will listen to them, instead of people with fresher, more logical ideas.
It doesn’t matter one bit how good of an idea I come up with or you do, because we’re not one of them. And that’s precisely why so many newspapers are failing. Brill obviously doesn’t understand the Internet, and yet media execs are giving him their time. That’s a serious issue.
His idea to charge people for providing free marketing for his clients is absurd. But it shows a lot about his thought process and understanding of the Internet.
Drew said
I still don’t get these bizarre ideas on pricing. I’ve heard prices as high as 10cents an article. That’s not micropayments. That’s still 100,000$ in total costs for a single article if, say, a million people read it. And there’s just no way any story is actually worth that much: not in a universe where freelancers can do basically the same job while living on Ramen noodles. There are just too many near substitutes.
Price something low enough, and make the purchase system seamless and universal, decoupled from any specific website/paper, and consumers won’t worry too much about a few pennies falling out of their pockets a day as they browse. It’s not the thing media empires are built on, but it’s better than nothing. But none of these giant subscription/payment systems seem built on the idea of slowly weaning web users onto the concept of paying for content: they all seem bent on making the desired transition as annoying and awkward as possible.
Greg said
Thanks for the comments. Patrick — the best parallel I can think of is Dick Morris in politics. He masterminded Clinton’s ’96 re-election and got a reputation as a genius, so we’re not allowed to point out that nearly every prediction he’s made since then has been wrong (he wrote a book predicting the 2008 election would be Condi vs. Hillary, for Pete’s sake!) If only there was some sort of market where investors could go short on surefire losers like Morris’ predictions or Brill’s latest ventures.
Drew — the problem with true micropayments is that, at a certain point, you’d just be better off selling advertising against it. Consider that charging $0.01 for an article is the same thing as a $10 CPM, which would be a decent, but not great, advertising rate. However, since any transaction greater than zero will drive people away, your audience would be much smaller, so it’s not at all clear that revenues would be higher. And remember, the reason we’re having this conversation in the first place is that the status quo is unsustainable. You are right that $100K for a single article is ridiculous; that’s why publications need to focus on selling the experience, not the individual articles.