The rationalization of publishing

Now that the ad-only experiment has decidedly failed, quality information providers will be able to build strong businesses, and consumers will be better served than ever

It was not a dumb idea. It may have even been the right idea at the time.

That is: With no printing costs and the ability to reach a much larger audience, publishing — the kind that had been traditionally supported by a combination of direct consumer dollars and advertising — could be supported by advertising alone. If so, it would be a huge win/win: Free information for the world and strong businesses with global reach.

It wasn’t obvious 20 years ago that by going down that road, publishers — who traditionally differentiated on brand, quality, and audience — were entering a commodity business that would be dominated by software and scale. And, even if it was, was there a better option? Getting money from consumers over the internet wasn’t easy back then. Entering a credit card was a lot of friction, and no one trusted it. Besides, publishers were getting paid. Advertisers still cared about brand and context. And, really, how bad was a little banner ad? It’s not like they were taking over your screen and tracking you across the web. And certainly they weren’t influencing what was getting published. It was an okay trade-off for access to great content (most of which was paid for by print ad money anyway).

The only thing that went wrong was the inevitable. Business always optimizes for where the money comes from, and advertisers weren’t in it for the public good. Which means they eventually got the better end of the deal, with the rest of us suffering through an experience that was necessarily compromised.

That story has played out. It will continue to play out for years — free, cheaply produced content isn’t disappearing. It will just get worse. But there will also be an abundance of non-free, non-cheaply produced content that an increasingly large and discerning audience is hungry for.

Look at the renaissance in television — it was driven by a better (non-advertising) business model. Even though there’s still plenty of free, ad-supported TV. A hundred million households pay Netflix alone for delicious, differentiated, ad-free fare. Look at music. At one point, the sky was falling in that industry because everyone was…