Content is Expensive

One of the ideas that kept pecking at my brain while I was prepping for our SXSW publishing panel was this: Content isn’t free. If it’s good, it’s very expensive to make. We can subsidize its production and maintenance in any number of ways, but we have to start being honest—with ourselves, our clients, and sometimes our readers—about its true cost. And when I said something to that effect on the panel, a nearly audible roar of agreement popped up in my Twitter feed.

This is something we need to talk about.

Why Content Isn’t Cheap

Round about the time Amazon freaked out and ostracized Macmillan, a lot of people—many of them Kindle owners—started asking why they should have to pay more than a couple of bucks for their ebooks. After all, there are no printing, storage, or distribution costs for ebooks, so aren’t publishers just being greedy?

A bunch of authors and small publishers—many of them suffering sales losses from Amazon’s tantrum—stepped up and explained why books cost money.

These posts are worth your time, so pop those suckers open in a tab, but here’s the upshot: it takes a village to make a book. Authors, agents, editors, copyeditors, proofreaders, book designers, production leads, compositors, cover designers, project managers, sales teams, marketing departments, and so on. I won’t even get started on the resources required to publish a daily newspaper.

Online publishing also requires resources: planning, big doses of both creativity and disciplined analysis, writing, editing, design, project management, production, ad sales, and so on. It doesn’t usually require a separate person for each of those tasks, but it still tends to be a lot of work—more than most readers and clients tend to imagine.

Paying for It

Many organizations are beginning to realize that they need to include content planning, production, and maintenance in their budgets as well as in their project schedules. (Well…production, at least. And sometimes planning. We’re still working on it.)

But this is really a core part of the argument that people like Kristina and Jeffrey have been making: you have to plan for content, and you have to figure out to pay for it—not just immediately, but over the long term.

Most of us have worked for clients who loved the idea of “fresh” content, but had no idea what it would cost; many of us are also connected with publishing and media outfits that need to find a way to keep the lights on. We need to help our clients figure out how to pay for the content they need, and how to match their content plans with the realities of their budgets.

The right content strategy is the one that meets organizational communication needs, supports good relationships, and fits into the organization’s business model. Some clients may be able to change their business model or organizational structure to suit their communication needs, but many won’t. Some will need to find ways to publish more content; others will realize they should be doing much less. Either way, cost matters, and as content people, we should be able to talk about it.

Luckily for those of us who didn’t go to business school, there are really only a few ways to subsidize online content. Standing around waiting for an electronic media messiah hasn’t worked out very well for most print periodicals, so let’s consider the world we actually live in.

How to Make Money on the Internets

Most of the content on the web as we know it is subsidized by:

  • Ads. Both reader-friendly ads, like the Deck network and less objectionable text ads, and hostile ads, like the tasteless diet aid/crappy video game/teeth whitening visual spam that even major newspapers have begun to run. Ad-supported content isn’t really free, even to the reader. If it were, web users wouldn’t be installing ad blockers. More on that in the next segment.
  • Subscription/Paid Access. Paywalls, usually ringing only part of a site’s content, force readers to pay for content in actual currency or to gain access through institutions who buy group licenses. The Wall Street Journal uses the individual subscription model, while the Oxford English Dictionary and databases like JSTOR and Lexis-Nexis rely on the group-license model. Some sites will try micropayments, though I’m not especially sanguine about that, myself.
  • Marketing. A lot of “free” content is subsidized by its function as a marketing tool for the content producers or the people who pay them. Many, many blogs work this way. A List Apart now runs small ads, but long before it did, it worked as a marketing channel, establishing the expertise and credibility of its publishers and writers. Most non-fiction books are also subsidized by their value as marketing tools: they don’t pay well enough to be worth the effort for royalties alone. Most commercial content strategy work deals with this kind of content.
  • Paid Delivery Channels (The New Hotness). The paid iPhone app is a way of getting people to cough up money for content that they normally wouldn’t dream of paying for so they can receive it in a convenient way. Kinda like how we used to pay for newspaper delivery instead of going to the library to read the paper for free. (Spoiler: there is nothing new under the publishing sun.) We’re going to see a lot more of this in the nearish future as publishers realize that the race to free has resulted in a pileup of bleeding, sad people with no income.

That leaves a single category—content created out of love—that isn’t subsidized by anything but the individual’s desire to create, communicate, and be part of a community. For a couple of years, this is how most blogs and personal sites worked. It’s still the force behind most of the content on Flickr, Tumblr, YouTube, Facebook, Twitter, and all the other companies that have figured out how to make money by acting as content hosts and facilitators.

It’s also my favorite part of the internet, but unless your client is a content facilitator or aggregator, it’s not going to help pay the bills.

Part two: Let’s think about each of these methods of subsidizing content and how they relate to our work as content and editorial strategists.

Further Reading

27 thoughts on “Content is Expensive

  1. Another cost element to consider is the various situations where the audience of a web site is prompted to contribute content. Often that content requires a moderator/curator. Added workload for internal staff or the need to hire someone to manage and deploy visitor submitted content is an expense that must be budgeted for.

    Great post!

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  3. None of these funding methods addresses one key flaw: funding the creation of new “long-form” content, ie content whose initial investment cost is high. New magazines, individual pieces that require extensive research or travel, or anything else that takes a long period of time (or a large amount of funding) to create an initial product – that initial hump is tough to overcome, and I don’t think “bootstrapping” is a solution that works for every situation. I frequently wonder what could be done to fund New York Times style foreign correspondent pieces, if the Times were to disappear tomorrow.

    One potential solution to this problem are apps like Kickstarter, which allow for public funding / investment in content BEFORE it’s created. Sort of like a CSA for original content. I’d be curious to see how this funding model develops.

  4. @Erin Kurtz: Yes, absolutely. Moderators and curators and other content shepherds need to be paid, too.

    @Justin Reidy: It sounds like you’re talking about raising initial capital for business projects that happen to be content-related. I do like the Kickstarter model for this, which is a revival of the very old “subscription” model for funding small print runs of books.

    Another thing to be optimistic about, I think, is that in the US at least, we get a lot of wonderful publicly funded content from NPR, PBS, PRI, and so on. These endeavors don’t make people rich, but they fund great investigative work and analysis.

  5. Social Media is a hungry beast and content has never been more important — always has been just now it’s in front of marketers as “must tweet more, get a facebook fan page, BLOG!” It’s always underestimated the time it takes, even with short form, and certain personalities have a nack for it. The problem is now we’re awash in content and only some bubbles up. In the days of the “gatekeepers” our content was filtered by newspapers and the nightly news. So what to do now? Be interesting is one tactic and learn how to curate your own content and create it.

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  7. Ultimately the biggest barrier is that credit card transactions are expensive. In real life, we have the penny. In the online world, you really need to keep transactions above 50 cents. I believe the rock bottom transaction cost is 32 cents.

    How is the internet going to thrive with such expensive transactions? Not to mention what a pain in the ass it is to embark on yet another credit card transaction. That’s a pretty steep barrier to overcome.

    This is why the publishing industry is at a loss. The monetary system isn’t up to snuff.

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