Content Is Still a Bad Business

Includes: AOL, GHC, MNI, NWS, NYT
by: Leigh Drogen

It’s great to see dying companies go back to the well with the idea that providing marginally good content is a decent business model. It only serves to highlight innovative companies with new business models like Groupon and all of its clones in the daily deal space. They took the one good business model content providers had, advertising, snatched it away from them, and dramatically transformed it.

The New York Times (NYSE:NYT) is getting ready to throw up yet another pay wall on its site. How many times have they failed at this before, yet they go back to the well and give it another shot. Note to the brass at the NYT, it ain’t gonna work. Why? Because your content just isn’t good enough, it’s just not specialized enough. Why can the WSJ charge? Why can the FT charge? Because their content is very specialized, and although it’s not all that valuable for a trader like me, for many out there in finance wold it’s a primary means of getting decent information.

The interesting line in the article released by the NYT this morning explaining the pay wall is this.

Readers who come to Times articles through links from search, blogs and social media like Facebook and Twitter will be able to read those articles, even if they have reached their monthly reading limit.

When more and more content is going to be found via social media, why would you exclude this from your pay wall count? If you’re going to try and enact some kind of ridiculous pay wall, at least capture where your traffic is growing from.

It’s all about owning one vertical, not trying to cover everything. When you try to cover everything, you really cover nothing. How much of the NYT content would you say is REALLY good, stuff you can’t get anywhere else, first hand investigative journalism that is really deep. 4%-5%? Maybe. Is that worth paying for the whole site? Is that worth a subscription? Hell no. The NYT tried to put a pay wall on its editorial section and that failed miserably, they thought that content was the most valuable, that you couldn’t get it elsewhere. They were wrong, and they are wrong again.

Hey Rupert, how is “The Daily” working out for you? Any closer to making money off that thing, let alone reinventing the newspaper for the 21st century? Right, didn’t think so.

How’s that acquisition party at AOL (NYSE:AOL) going guys? Having fun trying to sell ads on those pages. Look, I understand, AOL wasn’t just going to fold up shop and give back all of the shareholder money, because hey, companies don’t just admit defeat, they walk the earth like zombies until someone finally dismembers them a good 20 years later. But please, they could have come up with a better business model than becoming a content warehouse. Sad.

The only thing you need to look at to see how the market is treating the value of content are the charts of these companies. AOL is in free fall, NYT hasn’t gone anywhere, and NWS ain’t looking too good either. Don’t fall into some value trap with these things, take a hard look at their business models and ask yourself, is the price of content going up, or down every day that passes?

The answer to that question should be obvious.

A Letter To Our Readers About Digital Subscriptions (NYT)

NYT Paywall: Wishful Thinking Or Just Crazy? (BoingBoing)

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