Content isn’t worth a cent. Audiences are

Content isn’t worth a cent. Audiences are

I only write this for love. Not money. This article will not make me one cent.

You see, the internet is filled with people who make content everyday for nothing. There’s people like me who love to write and publish for the fun of it. And people who probably hate writing but spend all their spare time unwittingly creating content all day long for platforms like Facebook, Instagram, Twitter and LinkedIn.

Go click anywhere on the internet and you can read plenty of things that might snatch your attention for a minute or so but be damned if you can remember who wrote it, who published it and whether you will ever visit that URL in your life again.

And there lies the rub.

The audience is the thing that is valuable. The publisher brand – or ‘masthead’ – is also critical. The article or content piece rarely is valuable.

Content articles or URLs have usually been pushed to some unwitting user from Facebook or Google or Outbrain or some other genius ‘traffic generator’ that I don’t yet know the name of, thus destroying the content creator’s direct relationship to the reader.

chart of the day

Alan Kohler always knows how to make me pay attention – I like his sensible analysis and pithy charts and I always stop cooking dinner to watch him when he’s on the telly. There’s something authoritative about him that makes me want to pay attention. I am what you would say is his audience.

Kohler just wrote a piece for The Australian on the latest media reforms and how meaningless they are in the wake of the business model of journalism collapsing.

Kohler eloquently argues that in the old days when publishers earned a $50 CPM (CPM is gobbledy gook ad speak to say it would cost an advertiser $50 to reach every 1000 people) it was easy enough for him to set up Business Spectator as a free website for financial news.

The Australian Financial Review’s print readership was about 500,000. We thought we should be able to get at least half that audience to click on at least 1.5 of our stories per day. At $50 per thousand clicks that would produce revenue of about $5 million,” Kohler wrote.

“We set a cost base of $4.5 million (about one-20th of the AFR’s costs), arranged funding to reach break-even in a year, and away we went.”  Kohler then went on to sell the business to News Corp and get out of the loss-making game.

Now that CPMs have collapsed to 0.10c to $5 (largely thanks to programmatic ads commoditising cookie-created audiences), Kohler says the wisdom of subscriber-led content is only now beginning to shine. Subscribers are more valuable than casual clickbaiters who come to read ephemeral content but can’t remember the name of your site or the person who wrote the piece. Subscribers, more importantly, will pay.

Mother Jones is a not-for-profit political print and online publisher in the US that has shown how the old publishing business model – especially for investigative journalism – had collapsed but can be resuscitated.

The site won plaudits for its 4-month-long investigation into prisons, which you can read here. It’s a 35,000 word opus.  It cost $350,000 to produce the story and the site earned just $5000 or $6000 for the digital advertising on that same story.

The real prize for Mother Jones came when it ran an impassioned plea to its readers to donate to help their investigative journalism continue.

Before the appeal, Mother Jones brought in about $20,000 per month in sustaining reader contributions. After the appeal, the magazine tripled that.

“They saw a 164 percent increase in monthly sustaining donors from January 2016 to January 2017, and a 341 percent increase in ‘average new, digital-sourced magazine subscribers each month.’ That’s on top of a 72 percent increase in web traffic for January compared to the year before,” according to Poynter. By the end of November 2016, Mother Jones was close to receiving $70,000 in monthly sustaining gifts, a number that has increased since.

The point is, people who value content will increasingly have to subscribe or pay in some way to keep supporting it. Alan Kohler is now charging people to read his new venture The Constant Investor, and I confess that I have not signed up to it. I haven’t yet seen the need to pay $25 a month, even though I am one of his true audience.

As Kohler said in The Australian: “It’s simply a matter of demand and supply. We are water distillers caught in a rainstorm, gold miners in the land of Midas, where everything is gold. It won’t change; we have to move up to platinum instead.”