New Media Conference at UC Berkeley

by David Sims


Last Saturday I attended a New Media conference at Cal Berkeley's School of Journalism. One of the most striking qualities of the conference was a sense that not only publishers but also editors, entrepreneurs, and even reporters are just about out of patience with the current (lack of) revenue model. Publishers who a year ago would have tred lightly on issues such as paid subscriptions, big ads, and micropayments were unapologetic about their
need to make their nut. (I have to confess, after six years in online
publishing, that feeling isn't foreign to me.)


Michael Cieply of Inside.com was on a panel discussing business models
for online publications. Earlier that week, Brill Media and Primedia had
bought Inside's parent company, and they had annouced that Brill's Media
would merge with Inside.com to create a paper publication, Brill's
Inside Content. As a result, both magazines laid off close to half their
news staffs in the week that followed. Cieply said he had met with Brill
last week, who is now saying that in the near future, "Everyone will pay
for everything." Later, an audience member asked Cieply if he thought
consumers would put up with the paid subscription model (as put forward
by, for example, Salon) any better now than they did in the past, when
it failed Slate magazine. Cieply's reply was that "a hard-headed
decision is being made that consumer attitudes might not change, but the
people who work on these publications don't care. We're after the
largest number of consumers who _will_ pay."

Travis Smith of Daily Variety echoed that sentiment. In March, Variety
abandoned what Smith described as a confusing scheme that put some
content in front of a paid wall (the day's front-page features, news on
student films) with other content behind it (archives) and simplified
the scheme: everything is behind the paid wall "with the exception of
classifieds and the staff page -- so readers can email us to complain."
Smith said that over the past six years online publishing has relied on
a single revenue stream, "and I'm not talking about banner advertising.
I'm talking about venture capital."


It had been a while since I had heard anyone bringing up micropayments
as a valid model for online content, but Nick Denton, a former reporter
with the Financial Times and The Economist who is founder and CEO of
Moreover.com, spoke up in favor of them. "I don't actually believe that
the subscription model works ... Micropayments is the future." He likes
Paypal, the system that Ebay aficianados use to pay for auction items,
and sees it more in line with the way people browse the web -- likely to
pay a small amount for some odd piece of content at a site they may only
visit once a month or so.

The news wasn't all glum. Charlie Buchalter, vp of media research for
AdRelevance, said that while online ad revenues have suffered, the
number of web users and the time they spend online are at all time
highs, up from a post-holiday dip. "Show me a time over the past 100
years when advertisers haven't found a way to appeal to a group like
this." He said average CPMs (cost per thousand, the way advertisers have
paid for banner ad impressions) have dropped from about $35 last spring
to more like $22 now, and he expects them to continue to fall, then
stabilize in the third or fourth quarter of this year. (Note: those are
the published rates, and advertisers usually pay less than that in
practice.)

A parting thought for the day comes from something Inside's Michael
Cieply attributed to Steven Brill -- which is similar to something I've
heard several times from Madeline Schnapp, who works in Research here at O'Reilly: If it's worth knowing, it's
worth paying for. Looks like we're going to see a lot of experimention
this year, and a lot of formerly free stuff slipping behind subscription
walls.