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The never-ending argument between content originators and aggregators flared anew this week when Josh Marshall, editor and publisher of the political blog network Talking Points Memo put up a short post explaining why TPM was no longer making its content available through Flipboard, Google Currents or similar reading applications in which he referred to those services as “basically scams against the publisher.”
That drew a retort from Flipboard CEO Mike McCue, who stressed to VentureBeat that figuring out how to pay for and support news content in the digital world “is a work in progress.”
Marshall later posted a longer item, fleshing out his complaints with Flipboard and related services:
I do think these services, as they currently exist are bad for publishers. We give them the entirety of our product – news stories, updates, posts, what-have-you – in exchange for a notional thing called exposure, brand awareness, blah blah blah and in theory or at some point in the future a cut of the ad revenues these services bring in for selling ads on their platforms. The problem is there are no ad revenues that go to the publishers. Where they exist they are literally trivial. The real payoff is supposed to be reach, letting new potential readers know we’re out there. In theory, that’s particularly important for small publishers like TPM who don’t have big budgets for promotional campaigns. You’re not going to see a big TPM ad on a bus you see drive by [snip].
You can’t eat ‘reach’ and we can’t pay salaries with ‘brand awareness’. I don’t pretend to know other people’s business models or strategies. But successful business practices are always about having a close understanding of the costs of what you produce and the origins and mechanics of your revenues and more than anything else the interaction between the two.
Marshall is correct, as far as it goes. But it’s ultimately a losing argument. Content is going to get aggregated and repurposed online, if not by third-party services like Flipboard then by readers themselves. Ultimately, any successful digital publishing model is going to have to accommodate aggregation. The problem, as Om noted in his comment on Matthew Ingram’s writeup of the latest flap over at GigaOM, is that right now the tools and business models that would allow publishers to participate more fully in the aggregation economy are missing.
The reasons those mechanisms don’t exist are as much historical and conceptual as intentional. While print publishers long derived revenue from subscriptions and paid circulation, their main business was advertising. That is, they primarily monetized their audience, rather than their content.
When publishing moved online, as Marshall notes, it became all about monetizing the audience. Any intermediary that gets between the publisher and the audience, therefore, will inevitably be viewed warily by the publisher. Flipboard can claim it helps publishers build their own audience, but that effect is very hard to measure, and as with any advertising-supporting business model, an unmeasured audience is a worthless audience.
The conceptual problem arises from thinking about Flipboard in publishing terms (an error Flipboard itself encourages), when its actual role in the value chain is much closer to that of a traditional re-seller of goods, in this case news content. Flipboard doesn’t build an audience for the publisher, except incidentally, it repackages and re-sells content to its own customers. What’s missing in that value chain is the layer of wholesale commerce that would ordinarily go on between the manufacturer (i.e. the publisher) and the re-seller.
Some publishers have recently begun to focus more on that layer of commerce. The New York Times, for instance, makes its content available through Flipboard, but only to authenticated Times subscribers. Talking Points Memo itself potentially has a similar capability in place with its recently launched TPM Prime Service (although it may not have the mechanism and resources in place to manage the authentication process).
Individual authentication is only temporary and patchwork solution, however. What’s needed is a more general, open marketplace that would allow commerce between originators and re-sellers to evolve. It would be nice, for instance, if Flipboard used some of the $50 million in just raised in new financing to focus on innovating around a revenue model for its publisher partners.
A functioning market with robust commerce between content originators and re-sellers would allow publishers to worry less about how aggregators are monetizing their own audiences because they would be part of the value chain, it would allow innovation to occur around packaging and providing content, and it would ultimately serve readers.