Wednesday, May 11, 2005

LA Times Makes Subscriber-Only Content Open Again, but the Future of Paid Content is Not in Jeopardy

As noted in USC Annenberg OJR the LA Times has decided to re-open its entertainment online section to general access, after ad revenues failed to pick up for the section and the restriction failed to generate more subscriptions. This seems to have prompted the "paid content is dead" chorus to sing again, with postings at Poynter and at the New York Post spelling general doom and gloom. But the seeds of "doom" were sown long ago when publishers failed to recognize the long-term weakness of aggregating content in traditional print-branded, all-purpose packages based on business models in which distribution and aggregation was relatively rare and expensive. The poster child case in point is the Huffington Post, a weblog-based news and commentary portal fed by well-known figures in the media and thrown together with little more than inexpensive Movable Type software, links to news stories and some good PR. Its long-term value and viability will be grist for the media mill for months, but the bottom line is that when you can throw together a media property like this about as easily as kids go out to play ball, things are changing in content aggregation.

There is still lots of room to develop premium features for subscribers, but the layering generally cannot be "all or none" for text-only services in an era when content objects can travel so easily from one context to another. Online subscription content does very well where features are very robust and where communities provide valid and validated input into the content streams, but subscriptions based on segregating text content arbitrarily will tend to do rather poorly. In the short term this makes newspapers all the more reliant on licensing income from aggregation services such as Yahoo!, Factiva and LexisNexis, but in the long run newspapers and trade publishers are going to have to wake up to the need to make basic text content more profitable not by restricting its distribution via subscriptions or bulk licensing to aggregators but by maximizing distribution and monetizing the value of the context into which it flows with truly value-add premium subscription services and with context-aware features and ads. Content collections will thrive on the subscription model when their contents are very focused, high quality and well beyond text, but it will become harder to sustain a full range of aggregation services around those collections. Business content producers need to heed the lessons of The New Aggregation and treat our friends in the newspaper business as the canary in the coal mine that is warning publishers of all stripes to look at business models for text-based products from a fresh perspective.
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