The argument between proponents of paywalls on news sites and those of us who are skeptical that news consumers will pay for anything but the most unique content rages on. But is there another path?
Reuters business journalist/blogger Felix Salmon thinks so. In a thought-provoking post, he wonders whether the real value to publishers and advertisers is not the pennies and registration data that might, maybe, be collected through online subscriptions—but the much deeper social data on readers that can be gleaned by analyzing their participation and connections in Twitter, Facebook, and the like.
I'm oversimplifying Salmon's argument. Let him make it:
[A]dvertisers, looking to reach a large audience online, are going to have to look past the simple question of whether or not people are paying for content. And they’re going to end up with a much more granular and useful way of working out who’s seeing their ads: social media.
The fact is that if I sign in to a free site using my Twitter login, I’m actually more valuable to advertisers than if I paid to enter that site. That’s because the list of people I follow on Twitter says a huge amount about me, and a smart media-buying organization can target ads at me which are much more narrowly focused than if all they knew about me was that I was paying to read the Times.
This is, of course, a variation of what proponents of online advertising have been arguing for years: That the trick to making money in online news (as it is in print, incidentally) is in selling advertisers highly targeted audiences at premium prices. Subscriptions sort of accomplish that by making it easier to identify audience members—but first you've got to get the audience to be willing to pay money to subscribe, and that's still a largely unproven (and largely unlikely, in my view) model. But by parsing a site visitor's social-network information, publishers can deliver all sorts of interesting targeting to advertisers.
There are privacy issues here, of course, as well as—as pointed out by one of Salmon's commenters—a question of just who ends up "owning" the reader. Is it the publisher? Or Facebook? Or does it matter?
But I think Salmon is onto something: a new model for monetizing audiences that breaks with simplistic old print paradigms (see audience; sell audience to advertisers; maybe try to charge audience) and takes advantage of the much more sophisticated data that social-networked site visitors are now carrying around with them.
As Salmon says:
We’re not quite there yet. But it seems to me that online publications are making a big mistake if they make subscribers go through a dedicated registration and login process, because the demographic information they can get from that will be less useful and less accurate than if they outsource the reader-identification procedure to Twitter or LinkedIn or Facebook. And people will definitely enjoy an automatically personalized reading experience, where they can see what their Facebook friends are reading and what the people they follow on Twitter are reading.
Interesting stuff. Worth reading and thinking about.