My friend and colleague Jarvis Coffin, CEO of Burst Media, has a great post this morning that I recommend reading. Paywalls, he writes, don’t and won’t determine what is or isn’t “good” media. Many believe that the future of the newspaper industry rides on whether pay walls “work” or not, and Jarvis believes this is overstated, especially as it relates to the distribution of quality content. Threats from proponents of paywalls that we face a future of “bad” media if paywalls don’t turn things around, therefore, are just demagoguery.

But he also makes a really important point about paywalls that most people miss.

My understanding of the whole paywall issue isn’t that it’s so much about making subscription money as it is about reasserting the value of proprietary content to advertisers.

This is a very provocative observation, because, if true, then I can safely declare the paywall experiment a failure already. Here’s the problem: the creation of content that will be supported by ads is a business model in decay. Abundance isn’t the problem; it’s that the advertisers are now in the content business themselves, and this is a rapidly-growing sector of the advertising world. Advertising is in a full-blown revolution, as company after company discovers they don’t need media the way they used to, because they’ve become media companies themselves.

This is why I tell media clients — to their disbelief and dismay — that we are not in the content business, because there is no content business anymore. We’ve always been in the advertising business, although it sure looked and felt like we were in the content business. Our bottom lines were/are determined by advertising, and that’s the real business we’re in. Media companies need to accept that and move on to finding creative ways to enable commerce in our markets, because that’s exactly what our real competitors (the pureplays) are doing. The more we talk about and debate content solutions, the more we’re playing right into their hands.

I’m reminded of that great quote by Bob Papper that “television didn’t hurt magazines by taking away their readers; television hurt magazines by taking away their advertising.”

So if paywalls are a strategy to reassert the value of ads adjacent to proprietary content and not a subscription play, then they’re dead already.

Move along.

This entry was posted on Saturday, May 29th, 2010 at 8:02 am and is filed under Advertising, Reinventing Local Media. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.