Why Online Content (Publishing) is A Shitty Business Model

Earlier, I read an article that talked about how Medium will do a pretty big layoff and close a few offices around the country. Medium describes itself as a publishing platform and allows people to “have their voices heard.” Yet from a superficial viewpoint, I can’t see what their platform does that a simple WordPress blog cannot do. Nonetheless, the company has (had?) roughly 150 people to support this system. I don’t know what roles existed that required 150 people for a content based system (beyond writers and maybe sales people) but it baffles me. That said, even with 50 people gone, the remaining 100 still seems like a huge number to me for the type of business they support. With that in mind, why are content businesses more or less doomed?

The raw truth (at least from my perspective) is that content is easily duplicated and most articles end up being garbage anyway. If you’re into news, for instance, you just have to look towards Reuters, AP or Twitter then put a spin on the topic. If you’re trying to write articles that have a unique appeal, it’s even tougher since you’re competing at the SEO level to get your audience to discover you. Same with attempting to create a hook to engage your audience.

Another problem is that content has devolved into utter crap because of how headlines are designed to create a sort of bait-n-switch tactic with the whole clickbait methodology. There’s too many sites out there that produce horrible garbage but are promoted through partnerships with high visibility like Yahoo. Yet over time people as a collective conscious begin to become aware of these low life tactics that yield little to no useful information. Thus, these sites will eventually crumble on poor and unethical marketing tactics.

But the real core problem from a monetization viewpoint is that the internet has been perceived as being a free commodity from day one. Although online advertisement has helped mitigate some of the pain of cost, publishing isn’t great in terms of scale. What that means is that in order to grow, you need to pay for servers, bandwidth cost, developers/support, community managers and writers (LOTS of writers) to generate enough content and provide infrastructure to be sustainable. Most of this just isn’t cost efficient with the current online advertisement system.

Now, you can say that things like AdBlock has probably caused advertisers a great deal of pain for losing out on revenue. But my belief is that the amount of revenue lost due to adblockers really is the result of the ad publishers themselves showing unethical practices such as notorious browser takeovers, infamous pop unders, obnoxiously loud auto playing videos and just overall bad UI practices that have driven people into despising the online advertisement system as a whole. The actual content publishers themselves cannot easily control what ads may get served but most end up trying a ton of systems out of desperation just because their marketing department might be friends with someone at an ad network or something along those lines.

But even if adblockers weren’t around and the ads weren’t obnoxious, I still believe that online publishing’s dependence upon ad revenue for sustainability is just an overall poor business model. I think it works for small to midsized sites because they probably don’t require as much to operate. But most people who go to websites for content aren’t looking for advertisements. It works on TV and magazines because advertisements are impossible to avoid. Yet people are just looking for information or to be entertained in the online world. If they really want a product, they search for it rather than go to an irrelevant content site to find it. That’s your dilemma right there.

If a publication site did reviews then they could partner with say Amazon using their affiliate program since the content directly connects to a sale. In that scenario, online publishing works really well. But just raw content that isn’t connected to a product is far harder to monetize. Like if you read about a gorilla at a zoo because the headline was part of a wider publishing network such as Yahoo, you’re most likely not searching for a product. So online publishing will fail miserably in terms of getting any ad revenue.

Also, you can’t really beg your audience to support you. I’ve seen websites put up obnoxious warnings as a pathetic attempt to gain sympathy. The problem is that you’ve already lost at that point. No one likes a beggar. In fact, I’m more inclined to get mad and just run something like noscript to kill all Javascript on a site like that (whereby the warning will disappear because it requires Javascript to invoke). People will just view the site not as a site but a company. If the site was run by an individual, I can see the PayPal Tip Jar being used. But as a larger site, no one gives a shit. It’s easier just to find another website and move on that doesn’t annoy the user.

When I examine Medium’s situation in particular, I feel that it looks like a bad situation from top-to-bottom. First, they operate out of San Francisco. SF pretty much has become unaffordable and running a site that depends upon ad revenue exclusively is a sure sign for doom. Second, they have offices around the country for something that could handled remotely. I don’t know if their writers work in that office but for that type of business, there’s almost no position that I can think of which requires someone to physically show up. It’s really a self-destructive situation.

Now, here’s the killer: WordPress does all the basics without needing a huge development staff! I used to have my own blog that I maintained by hand. Eventually, one of the tables got corrupted and I ended up ditching the whole thing for WordPress. Zero. Regrets. If you really need more people to do the writing, just open WordPress up to people you trust. Most WordPress issues boil down to customizing the themes which can be contracted out or purchased. There’s really no sane reason to hire a huge staff for that type of scenario if your goal is to push out lots and lots of articles.

Of course, Medium’s platform (which does not appear to be WordPress) could be a legacy one. In that situation, they’re maintaining a code base that is slowly being outdated. I’m not saying that WordPress’ code base is great but that for the same purpose, it’s far easier and cheaper to implement since there’s ton of plugins and support. They might have the advantage of custom code, which generally is better, but there’s nothing really special about publishing these days unless there’s tools that another publishing/CMS platform cannot provide.

For myself, I know that I pretty much have been refusing a lot of content/publishing related jobs on the basis that most end up being some variant of customizing WordPress or Drupal. There’s really nothing special about that outside of dealing with spectacularly crappy code bases. Usually, I’ve heard a lot of these “jobs” for developers are customizing themes and doing nonsensical A/B testing with layouts to get people to register or click on ads. So again, it’s just a shitty scenario all around.

But that does point out to another problem of online publishing which is that the platform itself as a problem has mostly been solved. It’s so simple that a lot of tutorials for MVC systems use a simple blog as a teaching example. What these online publishing sites lack is a bigger tool or unique application piece within itself that has a symbiotic relationship between the content, the community, the advertisers and the data provided by the community in the usage of the tool.

Back when I worked on livestrong.com, I approached one of the executives for product and received interesting insight into the success of systems like livestrong. He talked about the three C’s (Content, Community, Contribution). The principals work like this:

  • Content: Builds interest in a niche topic and creates a core community
  • Community: Tools that keep the community engaged and support one another as well as the site
  • Contribution: The community uses the tools to provide back to the site (data) which enables the site to recycle in other means back to the community (analytics/advertisement, understanding of the community to improve upon the tools)

A lot of content sites have the first two but lack the third. The community aspect typically is nothing more than forums and/or comments. The comments though tend to be a useless farce in the scheme of things for many of these publishing sites because of unethical practices in employing tactics like clickbait titles to drive traffic to the site. In turn, the community ends up turning against the site by either providing troll-ish feedback, spam or other things which creates a toxic environment. In short, you, as the publisher, do not want a backlash of comments that end up driving away traffic because you’ve asked your writers to hold very low standards and maintain practices for tricking your audience into clicking the article. So already, many of these sites will just evaporate over time.

The third aspect is far harder but more noble. It does require very creative people and a solid development team because it involves creating custom tools that go beyond a banal commenting system. For instance, Livestrong implemented The Daily Plate, a reasonably sophisticated calorie tracker. Those people who were highly active found it helped them (even though these days I don’t believe in calorie trackers). But the point here is that it’s a very specific problem that hasn’t been easily solved through an out-of-the-box system like WordPress. Also, the data and content can relate back to the advertisements and/or partnerships with an affiliate program (examples would be weight loss products, health foods, etc.)

I think what a lot of these online publishing companies see is a very low barriers to entry type of business. I mean, it takes roughly 5 minutes to install WordPress, maybe a little more depending on how much of a customized environment you want (e.g. caching, themes, plugins, etc.) So the assumption might be that with enough writers anyone can easily start an online publishing company and start tossing out articles to generate easy income.

But again if they depend upon online advertisement revenue exclusively and don’t have a heavy hitter working for them as a writer, then it’s not going to be sustainable nor scalable. And you can’t simply force an audience to be docile, dumb and have them continuously click on ads so you can prop your feet up at home while collecting an easy paycheck. It simply does not work this way.

I think these businesses that go into publishing need to figure out whom their core audience is then build tools to re-engage them. The tools themselves need to solve a problem specific to their core audience where the content compliments or drives the audience towards using the tool(s). And it can’t be easy like the standard social media buffet buttons, comments or even polls. You need far higher barriers to entry in what you’re doing to be in this type of business. You need to start helping people solving existing problems and provide a useful service. Anyone can get content from anywhere; it’s too easy and unless the writer is something really special (and most aren’t) then there’s no reason for you to expect your publishing business to thrive over time.



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