There has been a bit of liberal triumphalism on the blogs lately. (This is a band which gets what I’m about to write.)
It has to do with copyright. Copyright is an issue that has united both Left and Right Blogistan since the Web was spun. All those who work on the Web recognize that the absolutist position of the copyright industries is self-defeating. The only way you succeed with a market, or an audience, is by identifying with its needs, ahead of your own.
In journalism this is called credibility. In music it’s called keeping it real. In the real world of business it’s called the customer is always right.
Yet for a decade now the copyright industries have been fighting what their market obviously desires, the unfettered access to content which the Internet provides. The copyright industries have changed the law, they have tinkered with technology, they have forced ads onto viewers, they have editorialized. None of it has worked.
In a free market consumers have the ultimate power. If we keep our hands in our pockets you don’t make a sale. If we don’t like the terms and conditions we are likely to keep our hands in our pockets. End of story.
Two liberal blogs, Eschaton and Down with Tyranny, are in an especially feisty move this morning. Atrios notes the fall of the newspaper industry. Howie Klein notes the fall of the music business. While these are both political blogs, doing a bit of political gloating, fact is both are covering a business story.
And that’s my beat.
The great failure of the copyright industries in the last decade has been its inability to create compelling business models for the Internet which bring the same revenue, per viewer, that they had before. This is largely because both were dealing with overly-large numbers.
It’s not what the million-selling records or the hundreds of thousands of newspaper buyers think which is important. It’s not the customers you have despite your attitude that is important. What is important is what each individual consumer believes, both those who are buying your product and those who are not.
What matters is whether you can make money with one consumer, not 1 million. Do the first and the second will follow. Nothing else matters.
It is possible that video will lead the way here. Because video is discrete, because it is expensive to produce, and because good video will always be in short supply, there is promise.
The battle is now on between networks and Internet companies to monetize video. If you go to Comedy Central’s MotherLoad, for instance, you’ll be forced to watch a liquor ad for each two segments of programming. (I like the mute button.) And Google is not the only Web company now seeking video circulation. Netscape is in on it, and at the heart of the recent NBC Universal deal is the idea that AOL and Microsoft will be getting in on it too.
What matters here are metrics:
- Cost to deliver each video.
- Cost to advertise each video online.
- Value you receive per viewer.
(Picture from the Iron Maiden Pit.)
Most of the other questions here are technical ones. Can you track, and
monetize, each video view, regardless of where it originates? (For
instance, can you monetize what’s on this site?) What is the optimal
balance between advertising intrusiveness and each customer’s patience?
At what point, in other words, do you lose substantial numbers of
individual viewers as you ramp up the ads?
A cautionary note. A decade ago search engines like Excite, seeing how
they could get $20 per thousand for an ad on their page, and seeing
this was profitable, started loading their pages with all sorts of ads
— buttons, banners, skyscrapers, pull-downs, roll-overs, and the
dreaded pop-ups. People left in droves.
Balance must be maintained, in other words, or the advertising business model will fail.
When I worked in the newspaper business, it was editors who were in
charge of fighting for this balance. The ad department would have its
crazy schemes, and the editors had to argue on behalf of the readers.
It’s the loss of these people which is destroying journalism.
When Tim Russert says everything’s off the record, he becomes an
advocate for sources, not readers. When news editors hand over control
of their sites to managers who come out of advertising, they lose their
ability to advocate for readers. When newspapers fret about "losing control," ignoring the fact that control always lies with the reader, they’re lost.
Advocating for readers, advocating for listeners, advocating for your
audience — this is the key to building a successful editorial business
model. This is what Atrios does, what Howie Klein does, and what the most successful conservative blogs do as well.
This did not change with the advent of the Web. Google is
trusted because it has editorial credibility with its audience, and
business credibility — we know they’re not out to screw us. AOL became
distrusted when it lost this credibility. The record companies and the
newspaper companies suffer from the same disease.
The customer is always right. It’s a bit like 186,000 miles/second. It’s not just a good idea. It’s the law.
