“Thanks to the Internet, people probably read more good journalism than before,” writes Andrew Rice in his May 16 New York Times piece on, Putting A Price On Words. “In fact,” he continues, that’s precisely the problem: the sheer volume of words overwhelmed a business model that was based on scarcity and limited choice.”
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Google’s chief economist, Hal Varian, sees the problem more as a consequence of “unbundling.” Quoted in an extensive article on Google by James Fallows in the June Atlantic Monthly, Varian says, “Newspapers never made money on news…What paid for newspapers were the automotive sections, real-estate, home-and-garden, travel, or technology, where advertisers could target their ads. The Internet has been one giant system for stripping away such cross-subsidies.”
In either case the solution offered is in monetizing the web. Rice describes a number of attempts to do so, most of them “content farms.” Instead of journalists deciding what their audiences should or might be interested in, they now respond to what their audience tells them to write about. Farm operations scour the Internet to find out what topics are hot and then assign writers to produce articles on those topics. Income comes from ads that are paid for on the basis of page clicks and the writer gets a percentage. So far, Rice indicates, it is not much, with a few exceptions. As the founder of one such operation, Choire Sicha is quoted by Rice, “I don’t think anybody has any idea of what anybody should be paid for a piece.” A danger in this approach, as some note, is catering to the lowest common denominator. For example, one serious start up’s most popular post was, “Megan Fox Has Wacky Hot Chick Syndrome.” Or, from the advertiser’s standpoint, the value of pages that generate clicks but no relevance to their marketing message.
Google, which has been accused of being a chief cause of newspapers’ economic distress, sees a more long-term solution, including pay walls, which it considers no longer a question. The paywalls will be justified by quality content.
According to Fallows, Google foresees that as more people go online for news and information, the value of online advertising will go up. And, precisely because they will be “unbundled” page views will become more valuable. Online readers will select the content that interests them and that, in turn, will enable online advertisers to better target their message.