The Perils of Paid Content

Back in the late nineties and early 2000s, I worked in various capacities for This Magazine, a spunky little lefty magazine in Toronto. I wrote for it, helped edit the front of the book, and served for a while on the editorial board. The magazine’s slogan was “nobody owns us”, by which they meant two things. First, there was no corporate owner calling the shots, and second, there were no advertisers to speak of.

As declarations of independence go, it was as wrong as it was proud. Pretty much everywhere you go in life, there’s always an owner, there is always somebody to answer to, someone calling the shots. In the case of This Magazine, there were two such owners. First, the magazine has charitable status (it is technically an educational charity) and is hence highly constrained by the requirements of that status and the limitations it puts on the sorts of things it can publish. Staying onside of the CRA was always a problem.

But more importantly, the magazine relied quite heavily on its relatively few subscribers for its revenue, which means the subscriber base was uniquely positioned to call the shots with respect to the magazine’s content. We would never have really admitted it, but catering to subscribers was a constant concern. Subscribers wanted the magazine to have a certain kind of politics, and hence had the editors in a box. Stepping even gingerly out of that box risked a flurry of complaints or even cancellations. (True story: a subscriber to This Magazine once cancelled her subscription because she was angry about something I had written in the National Post. Chew on that one for a bit.)

I don’t say any of this to pick on This Magazine. It’s still a spunky little magazine, I wrote for it just last year, and I encourage everyone to give it a read. But from this example I think there are a few lessons to be gleaned for the future of journalism, in particular the future of paid content.

***

When I was a student journalist, it was axiomatic that advertising was the biggest threat to independent media. Putting your livelihood in the hands of capitalists meant, ipso facto, doing their bidding.

Experience is a great teacher though, and when I started working as an editor at a newspaper, I was pleasantly surprised to discover that you didn’t wake up every day to a swarm of calls from outraged advertisers threatening to pull their campaigns if we didn’t smarten up. Yes, of course, advertisers called to complain on occasion, usually for one of two reasons. One was to complain about the stories that happened to be placed next to their ads — unfortunate juxtapositions do happen, though it is hard to do much about it. Advertisers also sometimes called to complain about what they saw as unfair treatment. For example, say we did a Thanksgiving feature on the gourds available at local supermarkets. If we mentioned one supermarket without mentioning the competitor who carried the same suite of gourds and who also happened to spend a lot of money on ads in our paper, we’d hear about it. And truth be told, these sorts of complaints were almost always legitimate.

But on the whole, advertisers didn’t spend a lot of time trying to dictate what went into the news pages, presumably because they didn’t really care. What they wanted was our audience, not the content. Also, an ad-driven newspaper benefits from having their advertisers in a nice little collective action problem. Coke and Pepsi might both disapprove of the content of the Podunk Examiner, but if the audience is valuable enough to pay to reach, then each has an interest in continuing to advertise in it. If Pepsi pulls their ads, Coke gets unchallenged access to that audience, and vice versa.

But you know who does complain a lot? Subscribers do, endlessly. Sometimes with good reason, but many other times, with no justification at all. I lost count of the number of times I took calls from readers calling to complain about something they had read in The Globe and Mail or the Toronto Star or had heard on the CBC, but who swore it was in our pages. Sometimes you could tell these readers to take a hike (newsroom legend told of a managing editor who once screamed at a caller “you are too stupid to be reading our newspaper!” before hanging up), but as the business declined, as readers and advertisers fled, it became less advisable to treat readers as an annoyance.

Today, the great hope for mainstream news organizations is that subscribers will start doing something they’ve never done, which is pay for news. The New York Times seems well on its way to bending that revenue curve and replacing ad dollars with subscribers at a 1:1 ratio, and there’s similar hopes for the Washington Post, the FT, and maybe the Wall Street Journal. Smaller metropolitan or regional papers are hoping for the same thing, once the great shakeup is finally done.

But here’s the thing about paid content: One of our great cultural principles is the maxim, “the customer is always right.” This is not an empirical statement. Rather, it is part of the metaphysical foundations of the market economy. Maybe the steak was cooked badly, or maybe the customer just has bad taste. Doesn’t matter: When it comes to spending his or her money, the consumer is sovereign.

So what happens when you apply this to news? My suspicion is that it will lead to an increasingly polarized media environment, through more or less the same mechanism that leads to group polarization in social psychology. When a news organization relies almost entirely on its readership for its revenue, it will inevitably start to cater to what the owners perceive to be the political centre of gravity of that readership. And the readership will in turn make demands on the editors to shape the coverage in certain ways, which will tend to gradually shift that centre of gravity away from the middle, and towards the political extremes. The organization will end up in a content box the readership won’t let them out of.

You can already see this process at work in the social media space. Whenever, say, the NYT does a story that the Twittersphere decides is off base (as in the paper’s much-derided profile of a white nationalist) a consensus rapidly emerges and the reporters and/or editors get treated to the now-traditional social media pile on. At a slighter lower pitch, news organizations are also subject to more or less constant complaints over photo selection, headlines (“Here NBC I fixed your headline for you”), story subjects, you name it.

Sometimes these complaints are valid, and sometimes when they are not, the editors have the stomach to ignore the torrent of abuse. But in a world where readers are the ones paying the bills, they are ultimately the ones calling the shots. When the readers become the de facto owners, it can only lead in one direction, which is that paying for news will give us a media that is more partisan, not less.


Comments

The Perils of Paid Content — 14 Comments

  1. Yes to all that. For a while I was the subscriber of a small digital newspaper in Spain, eldiario.es. They were always very proud on the fact that the subscriber base (anyone can read all articles for free, but subscribers –5 euros a month– get early access and a bimonthly magazine) generates an income greater than any individual advertiser (for instance, see the latest yearly report here: http://www.eldiario.es/escolar/cuentas-eldiarioes-quinto-aniversario_6_703839612.html, in Spanish).

    I stopped being a subscriber precisely because I observed that effect: as time passed, and though there are still small pockets of resistance in certain sections, most articles were just pandering to the base.

    • That’s really interesting. I really think we media observers should spend more time looking at European experiments and examples. The focus on the NYT/WaPo beasts really distorts our views sometimes.

  2. The problem with ad-driven online outlets is that – at least in my experience – they pressure editorial to maximize page views and, in these days, want their stories to be shared on social media. That’s not always a recipe for good journalism either.

    I suppose that the closest parallel to that in the old print world was that the print papers were constantly trying to take more territory. So the massive city papers had appeal more to a national audience and smaller papers would try to encroach on the territory of the suburban papers or the next closest small town paper. Insofar as that caused them to shift resources from their core area and spread themselves too thin, that would piss off the people who liked the really in-depth in the weeds coverage of their local water board or high school baseball or whatever.

    It seems that the Times, Post, etc can survive and do ok purely on “brand.” It helps that Steven Spielberg just made a beautiful two hour advertisement for that brand. It will continue to appeal to centrist Democrat types and that’s a big enough audience, I guess. They’ll still bitch about the occasional David Brooks column while patting themselves on the back for being willing to listen to “both sides.”

    I don’t know how the small town and suburban papers will survive. I don’t know if there are enough people willing to pay for coverage of the water board and high school baseball. Alas.

    • Yeah — I don’t think that the ad-driven model was the be-all and end-all of funding models. Alex Taberrok makes a similar point on MR today, about the ad-model dumbing things down in similar ways as you suggest. What it did do was allow papers to sit in the middle and not worry too much about politics.

  3. What about a CBC-type model where funding is via some kind of 3rd party organization? At this point the only thing in CBC’s favour (well, I like CBC) is probably their size, as they’re the target of endless complaining that might sink a smaller organization.

    Or maybe we move to a Think Tank model, where everyone funds a think tank that reflects their views, and the think tank lobbies politicians and pumps out propaganda while claiming to be a charity. (I’m looking at you, The Fraser Institute.) That’s already where a big chunk of “public engagement” corporate funding in Canada goes, and we have dozens of special interest think tanks to show for it. Let’s institutionalize this model and let them duke it out on the big stage. Winner takes all!

  4. What happened to This Magazine really exposes Ontario’s social malaise. It just goes to show that Ontario’s is an almost pathologically alienated and low-trust society.

    • Max – How does it show anything about Ontario when it’s a general trend that equally affects papers and magazines outside Ontario? If you’re looking to get in a jab over that old Quebec controversy, at least find a case where your parody might conceivably apply.

  5. All good points, and a great article. I’d say this boils down to an argument not so much against a mostly subscribers-funded revenue model, but for a variety of models : the faults of one are counterbalanced by the strenghts of others, and vice-versa. Add to that the necessity to impose some minimal limits to what can be presented as “news” or “informations” (to reduce the chance of straight-up fake news propaganda machines), and we can foster a healthy media environment.

  6. Excellent article. As a former daily newspaper journalist I agree that the regional daily newspapers tend to veer towards the coverage favorable to the inclinations of those in their subcriber regions. Thus they veer toward the outer ends of the political spectrum respectfully. This is fine as there are two competing dailies in Greater Boston. Smaller regional dailies tend towards the middle and micro local news as it maintains the advertising and circulation advantages of a purely local news outlook.

  7. Fascinating read. Thank you for writing this.

    However, regardless of ad-revenue model or subscriber-revenue model a publisher is still are beholden to the reader. Ultimately if the reader is unhappy with your content they will complain and/or eventually leave. This impacts both revenue models.

    I don’t think subscription-heavy revenue models imply increasing polarization for a publisher. There are plenty of readers who find polarizing content uninteresting and are seeking middle ground (even if that’s still confirmation bias). The challenge is most publishers are not differentiated in their market position. If they are, and remain committed to it, then they’ll attract a relevant audience that is passionate. This will make for lucrative revenues – ads, subscription, or ideally both as a diversity in revenue streams means you are not hostage to any one source.

  8. Perhaps what’s lost in the current conversation is that newspapers and magazines relied on a hybrid subscriber/ advertiser model. The advertisers were subsidizing publication, bringing the cost of subscribing down to something that anyone could afford if they wanted to read the content. Anything that was purely advertiser driven and given away for free was generally junk with articles that were sensational or just disguised ads.

    Content had to be broad enough to draw a diverse subscriber base since the cost was low. The problem with pure subscription models is that readers own the content, wanting to pay full freight only for what they want to read and not pay for uninteresting or disagreeable content. When cost is low, a newspaper subscriber who didn’t follow sports did’t care about the sports section coming along as long as all their favorite comics were printed.

    Someday we may rediscover this subsidy model

  9. One issue with advertisers that is becoming increasingly more apparent is that they themselves are beholden to their own consumers. In these days of instant social outrage, it doesn’t take a whole hell of a lot for a company to find themselves a target, simply for being associated with something that enough people find disagreeable. Think of the retailers that dropped Ivanka Trump’s brand(s) after threats of boycotts. That may be a low-ball comparison, but the basic premise is the same.

    Considering that, generally speaking, individual advertisers hold far more leverage than any individual subscriber (based purely on the relative size of their contribution), if even one of them threatens to pull their ads it can have an out-sized impact on editorial decisions. If these advertisers are themselves being pressured to react to controversial content, you can find yourself in a position where you’re effectively forced to answer to people who aren’t otherwise interested in your content, much less interested in paying you for it. It may be discouraging to feel like you need to pander to your base, but there’s something to be said for limiting your exposure to the moralizing whims of pop-culture.

Leave a Reply

Your email address will not be published.