Thursday, December 27, 2012

Some new digital media start-ups test out exploitation as their business model, while a few try cooperation

If there was a major trend this year in digital media, one most tech and media websites would rather not talk about (besides declining advertising) it has to be the number of new media businesses that have been launched that use exploitation, or in some cases, cooperation with content creators to build their businesses.

Not a week goes by that I don't get solicited by a new, or even existing, new web property to contribute the content I create here at TNM to the new entity. In return, I am told, I will get added traffic back to my website. Actually getting paid for my work, of course, is out of the question.

As one person told me when I declined the offer to give away my content, "exploitation" is a strong word, their new launch, they assured me, was "revolutionary".

But there is nothing revolutionary about trying to get free content. Many of today's biggest web properties are build on that very notion. Ask newspaper publishers about Google and they will tell you that the search giant's very existence is dependent on their content (and so Google should pay). The issue is whether what the content providers get in return in worth the price of submitting their content to the other party for free. In the case of Google, where Google has said they would be happy to leave out the newspaper's content, most have decided that the bargain is not worth passing up – there is too much to lose and very little to gain by opting out.

Other businesses are built on the same concept. Facebook is a great example. Facebook, like MySpace before it, provides the platform and users join in. Users are not charged for the privilege, but their Facebook pages become the content Facebook can sell. Brands, in general, have found it worth their trouble to join in, but media entities are taking a second look at the concept, and some have decided to back out.
More recently, Flipboard, Zite and even Google Currents have launched new tablet "magazines" where either the reader builds their own digital magazines and newspapers based on the content contributed by media properties. In some cases, the media outlet is presented with a carrot: drive enough traffic and you'll end up seeing a check.

The promise of pay is, of course, what can differentiate the offer from others. If a major tech property wants me to contribute my writing to their website or digital magazine what is in it for me? Added traffic? What about a share of the added revenue that site generates from online advertising?

Sadly, our industry, print and digital publishing, has jumped onto the exploitation bandwagon. Recently a long time publishing veteran, was honored after years of taking the full stories of other media outlets and repackaging them into his own newsletter. Apparently the business model does not bother other publishers who, most likely, would love to be able to rid themselves of the cost of creating original content themselves. What is honored in the publishing business is a cause for lawsuits in other industries.

But the business model has many variations, and exploitation can quickly morph into cooperation with a few tweaks here or there.

Cooperation, sadly, has gotten a bad rap through the years, as if the communists invented the term and now everyone needs to run as far away from the concept as possible. Cooperation is often seen as creating an inferior product to the efforts of the individual – take the wine cooperatives of southern France, as an example.

Nomad Editions, which recently shuttered its titles, was founded on the idea that individuals would edit their "own" magazines" using the Nomad publishing solution. In exchange, the editors would get a share of the subscription revenue. The concept had merit: the editor creates something new using tools provided for free and, in the end, gets paid for their efforts; the new media outlet creates the tools, absorbs the programming, design and server costs, but gets the content for free.

Nomad Editions did not succeed, however, because the new title were too obscure and the project was of too small a scale to succeed in the still growing tablet publishing market. If the writers had been more well known, say publishers of their own blogs, and had Nomad launched dozens of these new magazines, the effort might have worked. Conversely, if those same writers were contributing to the same titles then the quality would have gone up, the issues would have been thicker, and multiple blogs would have been promoting the new title.

One of the reasons we are seeing more of these exploitative (or sometimes cooperative) new digital media outlets is that developers are entering the field, equipped with the ability to launch a new website, mobile or tablet app, but not to create the content.

Meanwhile, far too many writers, reporters and editors are out of work and seeking a new home. One wonders who in their right mind would take a job at Demand Media or before that start-up, But the answer is that quite a number of people will sign up. At least there is a paycheck, no matter how small, at the other end of the bargain. The "revolutionary" idea now, though, is that even that small check can be eliminated, these new entities believe, if a vague promise of fame and a few more clicks are promised.

But morph the idea into a more cooperative venture and I think there is promise in the concept. At the very least, one might find that talented people are more willing to take the plunge and help out the new start-up if the effort is to be expended creating something really new and something that with a little profit sharing as part of its business model.