It is well known that publishers of newspapers and magazines are suffering. New media, including the internet, is killing the magazine and newspaper business. The number of advertising pages in magazines from Vogue to Playboy is shrinking. Magazines and newspapers are getting thinner as the number of paid subscribers dwindles.
The problem of course is “free”. Free classifieds on craigslist are eating the lunch of local newspapers. Free news websites are allowing people to cancel their Sunday Times and get all their news from the web. And free pictures means that the lads no longer have to buy a copy of Playboy or Maxim.
The old business model for publishers was to provide interesting, useful or insightful editorial content (articles and pictorials) that subscribers would be willing to pay money for. Major publications had circulations numbering in the many millions. Based on the circulation publishers sold display ads and classifieds to their advertisers–companies with products to sell to the consumers. Normally the subscription would defray the cost of distribution. The bulk of the publisher’s revenue came from advertisers.
And the people that created the editorial content–writers, photographers and graphic designers–were paid by the publication for their work, either as direct employees or by the piece.
In the old business model there were a few talented content creators and many subscribers.
But the internet turned everything upside down. Now there are many content creators and few subscribers. Nobody is willing to pay for a subscription anymore because everything is available on the internet for free. And everybody fancies themselves a content creator–photographer, blogger, writer, graphic designer.
Here is our proposal for a new business model. Instead of publications charging subscribers and paying content creators, publication should pay subscribers and charge the content creatures. Here is how it would work.
Publications need readers or viewers in order to get advertisers to buy ads. The more readers, the more you can charge advertisers. But to compete with all the free services, publishers will have to start paying for readers. Maybe they will pay 1 cent for reading an article. This is not without precedent. It was tried during the internet boom in the late 1990s when dotcom startups with no sales were valued based on pageviews. Every industry already has many trade magazines with free subscriptions. This is really just a further in evolution of that idea.
Now at the same time, there are now millions of creative people who need an outlet for their creative work. Many have the tools and skills to produce outstanding work. Publishers can hold an eBay-style auction for coveted spots in their publications–cover photos, lead articles, etc. Who knows, a cover photo for a magazine like Vogue might be worth $10,000 to a fashion photographer. For a photographer, it is a marketing expense that will get lucrative advertising work.
So there you have our proposal. We even have a cool name for it: The New Media Business Model. Nifty, eh? Maybe someday they will be teaching at Harvard Business School. Obviously there are lots of little details to work out, like how to make sure someone actually reads an article, but that is the basic idea.
In summary, publishers will charge writers, photographers and graphics artists for spots in their magazine. Subscribers will be paid for each article or story they read. Advertisers will continue to buy ads based on circulation.
