Ever since around the time I began blogging (May 2008), a dominating part of the conversation has been whether or not online content providers can make enough money to make their endeavor worthwhile.
Early in that time period, there were hopeful prognosticators—mainly younger bloggers themselves, and a handful of would-be consultants who hoped to make money advising them about the ins and outs of social media—who believed, earnestly, that sources of income would open up to online content providers, even if it wasn’t entirely clear how that would happen.
This was a kind of magical thinking, of course, but it could be forgiven in light of the immense difficulties print journalism was then undergoing. Newspapers and magazines were facing the severest financial crunch of their lifetimes, as revenue from advertising—always a print publication’s biggest source of income—fell off the cliff. The promoters of online content argued that this was because print publishing had reached the end of its useful lifetime: peering into a cloudy future, they claimed that print would go the way of gaslight lamps, horse-drawn buggies and slide rulers. And because print was about to go extinct, they said, all that advertising money, added to by additional revenues brought in by subscriptions, would flow to online content providers.
I replied, in this blog and elsewhere, that this was unlikely to be the case. Print journalism was indeed suffering, but it wasn’t because of the rise of blogging, it was because of the Great Recession. Advertisers pulled back, not because they were casting an adoring gaze upon online publishers, but because they were struggling to stay alive: they had first to cover the basics, like salaries and rent, before they could lavish money on page ads.
Well, print is coming back, isn’t it? But what remains a conundrum for online content providers is how to make money. Consumers have proven over and over that they do not want to pay to see things online. They feel that they’re already paying enough to get online in the first place, and besides, there’s such an infinitude of websites that, if one of them gets greedy and starts charging a per-view fee, there are always a billion others that remain free.
In the world of wine, there admittedly are a few sites that get away with charging money, Wine Advocate, Wine Spectator and Vinous among them. But these are outliers—peculiarities of the wine industry, which has enough ardent consumers and trade members who are willing to pay $100 a year for access. As for the rest of the bloggers, theirs remains a labor of love, not one of potential profit.
Some bloggers as a result have turned to accepting ads on their sites. Ads don’t bring in a lot of money, but they bring in some, and if the blogger can increase his numbers, the amount of money might go up. But the same consumers who refuse to pay money for access to online content also don’t like advertisements on the sites they go to. This is the reason behind Tivo, which “eats commercials” (in their own words), and it is also the rationale behind services such as Adblock, which allows users to “surf the web without annoying ads.” This is great news for web surfers, but it’s a disaster for content creators: they finally figured out how to make a little money, and along comes this company that prevents their ads from being seen. It’s also a disaster for the companies that advertise; a honcho from the Interactive Advertising Bureau called ad-blocking sites “an unethical, immoral, mendacious coven,” extreme but, under the circumstances, understandable language.
Ad-busting companies such as Adblock certainly don’t want to kill the goose that lays the golden egg. That would not be helpful to their own bottom lines. What to do? In a really interesting development, Adblock just announced they will integrate Flattr, a Swedish company that calls itself “a social microdonations service” by which content consumers can make voluntary “donations” to websites they like. This eliminates the need of the provider to accept advertising (which most providers don’t like to do anyway), and also increases the depth and complexity of the relationship between provider and consumer. Users would set up a “PayPal-like account,” put money into it, and from those funds providers would be paid, using a special Flattr algorithm based on things like the duration of the user’s stay on the site.
Will the Adblock-Flattr model work? Flattr co-founder Peter Sunde said, on Fast Company, that the new model promises “to help artists, creators, journalists, everyone, to earn a fair living from their work. Not to be abused.” That sounds pretty good to me.