This trend has parallels with the games industry. Many publishers and developers decided long ago that monetization above all else was the goal, and it didn't matter if that meant pumping out title after title with terrible production values and sleazy monetization strategies.
Zynga pioneered this approach to such a degree that they were essentially the BuzzFeed of interactive entertainment. Later, many AAA games would follow suit embracing the Free-to-Play model. Higher production values with the same sleazy monetization strategies. The end result was games of all types selling their soul in the name of making a quick buck.
Web content has the same problem. In the face of content becoming a commodity, the reaction thus far has been to produce more content. More content means lower quality content. Lower quality content results in monetization becoming more difficult, and thus prevalent. More prevalent monetization leads to ads. Ads kill page performance, thus driving anyone away who doesn't have an ad blocker. That in turn leads to idiotic things such as paywalls and traditional media being turned into a glorified blogging platform (cough Forbes). It's a race to the bottom.
The solution to this of course, is to simply make a high quality product. Ensure the content is top-notch, kill anything that isn't. Make sure page performance is excellent. Hand-curate ads such that they're non-invasive, fast, and not killed by ad-blockers. Admittedly the last point is difficult, but it can be done. If the publication is sufficiently niche, a subscription model could actually be appropriate in lieu of ads; nautil.us is a fantastic example of this.
In the end, it boils down to the classic error of the suits screaming "monetize!", ruining their product and shooting themselves in the foot in the process. This same dynamic applies to games, print media, and even startups alike. There's a reason YC constantly reiterates that monetization efforts are foolish in the face of a product that isn't great.
"The solution to this of course, is to simply make a high quality product. Ensure the content is top-notch, kill anything that isn't. Make sure page performance is excellent. Hand-curate ads such that they're non-invasive, fast, and not killed by ad-blockers."
I agree with this strategic sentiment, but I'm not sure the solution is as simple as you think it is. Higher quality content generally requires much more expensive production costs, and it's far from clear that the revenue side of the equation will support these costs at anything more than hobby-level scale.
"Admittedly the last point is difficult, but it can be done. If the publication is sufficiently niche, a subscription model could actually be appropriate in lieu of ads; nautil.us is a fantastic example of this."
I love Nautilus, as I imagine a lot of HN readers do. But how is it doing as a business? Is it thriving? Is it crushing it? Is it barely scraping by? I'm not posing these questions Socratically; I'm genuinely curious to know the answer. Extremely curious, in fact, as someone who's spent a lifetime in the content business and desperate for any glimmer of hope along these lines.
My instincts lead me to a similar hypothesis as yours: find a niche, overservice it, and invest in quality as a differentiating factor. But historically, these sorts of publications have rarely been goldmines. Many of them, especially in the old days of print, were borderline nonprofits -- heavily subsidized by charitable publishers or donors.
I suspect there is a niche out there for the specialty publications of the world: your web equivalents of Road & Track, Field & Stream, Wine Spectator, Robb Report, Foreign Affairs, and so forth. I am not as sure there is a lucrative niche in general-interest categories, such as news. Even still, I'd love if any of the niche publications in today's brave new world -- Nautilus, for example -- would let us in on their business data. Even just a slice of it.
>Higher quality content generally requires much more expensive production costs, and it's far from clear that the revenue side of the equation will support these costs at anything more than hobby-level scale.
True, but high-quality content also serves to build reputation. Positive reputation can still drive revenue, even in this day and age. If major publications haven't failed on that front, then they've failed on others, such as presentation. Excellent products have to achieve and maintain excellence in all areas, and any chink in the armor is reason for people not to regularly use a product. I don't know of a single major publication that's checked all the boxes.
>I love Nautilus, as I imagine a lot of HN readers do. But how is it doing as a business?
That's a good question. I don't know, but I really hope it's doing well.
"Positive reputation can still drive revenue, even in this day and age."
Can it drive a business model, though? Again, let's turn to the case of Nautilus. We can probably assume it has a great reputation amongst an admittedly small group of readers. But is that reputation driving subscription revenue sufficient to keep the publication in the black? To keep it growing? To keep it securely in business?
Once again, I'm 100% aligned with you in my hopes and desires for the industry. But hope isn't a business model. I'd like to hope that Nautilus is a great example of how to run a content business; unfortunately, at the moment I have insufficient economic evidence to back up that claim.
I agree with you that excellent products can outcompete commodified trash under certain circumstances. I'm less sure that enough people want to pay for the product at all in this case, however, be it excellent or otherwise.
Whatever the case, thank you for a compelling take on this subject. I quite sincerely hope you're right.
>I'm less sure that enough people want to pay for the product at all in this case, however, be it excellent or otherwise.
In that case publications like Nautilus would probably have to be ad-supported. Hand-curated ads would go a long way towards preserving design, performance and even revenue since most ad blockers wouldn't block them.
However, there's still massive benefits to outsourcing ads—namely advanced analytics, targeting, and click fraud detection right out of the box. Implementing any of those in-house is certainly non-trivial.
That said, most publications—especially niche ones—are selling direct to their audience right now. There's nothing wrong with that, unless consumers prove adverse to paying for content in a subscription manner. I tend to strongly agree with you on that point.
While perceived value is one issue on that front, I think a lot of it has to do with the inconvenience of signing up, paying, and logging in. App stores don't have this issue, and they offer a lot of print media content these days, though I don't think they've really solved anything yet.
Film has Netflix. Music has Spotify. Print media doesn't really have an equivalent. So, it's possible that may be one angle. I know there's startups that have tried this, but none have approached the scale or success that Netflix or Spotify has.
Self-selecting for an affluent demo is an easy way out - and leads to more advertising income. AFAIK The Economist and the like are steadily growing paper subscription rates.
And isn't the fact that most publications doing "general-interest" news can't survive actually great - if there isn't enough demand on the market, then the market agrees with my (and most of HN's?) subjective assessment: most news is worthless.
Technically, yes. I realize I sort of contradicted myself there.
Paywalls vary in terms of aggression and the nature of the content they're protecting.
For example, WSJ's paywall is extremely aggressive and the content it protects can be found from other sources for free. Most of the time you can go over to the New York Times or some other publication and get the same story for free, because NYT's paywall is a lot less aggressive. Even so, if you subscribe to either, you're still going to get a bloated page filled with stories that can probably be found elsewhere.
Something like Natilus on the other hand, has a very non-aggressive paywall, it's devoid of ads and bloat, has a clean design, and the content is sufficiently niche that you'd feel like you're getting a real value for your money while supporting a unique publication to boot.
So, a paywall may be idiotic depending on why and how it's deployed I suppose.
Pando has an interesting paywall where paid subscribers to the magazine who share articles "unlock" the article temporarily for their social audience for 24hrs (through a unique link).
What may be more attractive is a one stop subscription to a number of worthwhile sites. Enough quality content that the reader then spent most of their online reading time there instead of in the slums.
Economics is way to provide compensation. But it also often doubles as an effective form of filtering.
That's unfortunately, the feature of market economy - it's the same force that gave us powerful computers on which we now read BuzzFeed. People for some reason forget that market does what market does - optimizes everything for profitability. It doesn't stop at "good enough". It pushes forward, destroying anything that is not helping the profit margin. Various organizational inefficiencies go first, but after that, the next thing to fly out of the window is product quality and working conditions.
In "Meditations on Moloch"[0], Scott Alexander did a pretty good work describing this mechanism, as well as various consequences it has. The general pattern is:
"In some competition optimizing for X, the opportunity arises to throw some other value under the bus for improved X. Those who take it prosper. Those who don’t take it die out. Eventually, everyone’s relative status is about the same as before, but everyone’s absolute status is worse than before. The process continues until all other values that can be traded off have been – in other words, until human ingenuity cannot possibly figure out a way to make things any worse."
Markets are fairly self-correcting. Excess content will kill lowest quality content producers (not enough ad revenue). Homogeneity of content will create ways to differentiate (niche publications). Globalization... well, some niches are somewhat global, and to that extent this will also lead to either consolidation or dying out of poorer quality publications.
The only way you can make a valid "everything will be shit, markets are bad" argument is if there is a mechanism through which you believe regression to the mean of [cultural values, intellectual endeavors] is "BAD", and PERMANENT for some reason (culture, psychology, neurobiology) leading us as a society to some kind of mental poverty. But then you're saying someone should somehow regulate this? Decide? Maybe even you?
"I am most certainly not fooled by the antirigorous arguments of the way above their pay grade academics who truly believe they could run the world the way Plato intended them to. Get thee behind me, Satan."
> Excess content will kill lowest quality content producers (not enough ad revenue).
I disagree with you here. It won't kill lowest quality content producers. On the contrary, it will kill the higher-quality content producers (as it in fact does), because quality content is more expensive to make than crap one. The optimized variable is profitability, which right now is strongly tied to view count - therefore you get more and more viral, easy to make content, made of every cheap mind hack we can think of.
I'm not sure about your second paragraph - you say "regression to the mean" and "permanent", as if regression to the mean wasn't by definition the default state of the system, and hence permanent (absent default-changing influences). My belief is though that the degeneration of mass media is a continuous process driven by the market, so as long as the market incentives are in place, no regression is going to happen. You'd have to destroy the current mass media industry for news to regress to the (arguably much better) mean.
> But then you're saying someone should somehow regulate this? Decide? Maybe even you?
Well, yeah. Not me, or not one person in general, but we'd better regulate it somehow, because right now it mostly runs without any kind of explicit control - i.e. it does whatever it wants, which is not what humans generally want it to.
I reckon the death of marginally medium-to-highbrow low-profitability journalism and the emergence of clickbait only appear to be connected.
Clickbait will appeal to population, spring up new clickbait ventures, and descend down a spiral you describe. Best clickbaiters will emerge victorious, worse clickbaiters will crawl back with their tails between their legs. The first will be profitable, but not excessively so. The latter will have been hopefully funded by rational venture capitalists, not taken on any unreasonable personal risk and carry on with their careers. Nobody will have lost anything, except all the people reading their content.
Medium-to-highbrow journalism is struggling to get by - but that is mostly because it's readership doesn't care enough - or enough of it's readership doesn't care - which is to say their quality wasn't great. It may have cared before, but now there are better options. Some of them are better in the sense that people are lazy and passive entertainment has gained their favour. Others are better options, because they are of even better quality. It's unfortunate, but the thriving high-brow media sector shows that there is a market for quality publications.
Maybe I'm in a delusional bubble, since I live in a country where the average person gets 3-4 long form periodical publications (weeklies/ monthlies) and 20-30% of the population gets their daily newspaper delivered every morning before sunrise.
> which is not what humans generally want it to.
"Which is not what you think humans generally want it to." is softer form of the same statement :)
Without aspirational media & news (by which I mean media that is intellectually targeted above the optimal profit point), intellectual discourse lessens in greater society. This lessening of discourse leads to lessening of intellect in greater society. Repeat ad nauseum until we've optimized our culture's stupidity.
In reality, there are obviously multitudinous different streams of media one can partake in. But I would say that the existence of any mass/popular/mainstream vein still makes the above a concern.
This is pretty much exactly what Marx called the "tendency for the rate of profit to fall ", with the quirk that cheap content requires almost no capital investment to be replicated infinitely.
I worry that quality may not be the route back. After all, how exactly do we define quality?
Quantifying quality is a complex domain-specific topic with patterns that can be boiled down to, but requires one to be knowledgeable of the expectations of assigned value and image to a given product.
What is more vexing in my opinion is when an organization creates works that are widely agreed upon as high quality, whilst still abusing monetization efforts to various degrees.
In the games industry, Team Fortress 2, Counter-Strike: Global Offensive, and Dota 2 would be interesting case studies, since, in order of wildly unrelated user generated content from greatest to least, these are probably Valve Corporation's highest revenue churning titles at the moment. Though, this is still an example of quality not eliminating the issue at hand.
Team Fortress 2 in particular is very interesting. The game started its life as an exemplification of product purity and exellence—only later did Valve decide to turn it into a test bed for microtransactions.
Obviously that experiment has been very successful, but we also don't know how it would have fared had Valve stayed the course and stuck to a more traditional strategy, continually updating the game while selling it for a reasonable price.
>What is more vexing in my opinion is when an organization creates works that are widely agreed upon as high quality, whilst still abusing monetization efforts to various degrees.
The production values might be high quality, but the product as a whole isn't, because monetization efforts detract from the overall quality of the product.
>Zynga pioneered this approach to such a degree that they were essentially the BuzzFeed of interactive entertainment. Later, many AAA games would follow suit embracing the Free-to-Play model.
Just wanted to point out one thing -- the pioneers of the F2P model was not Zynga. It was South Korean gaming companies. (didn't know about this myself until I heard about it from Jon Van Caneghem)
That was meant to be taken in context of the paragraph above it. That said, I worded it poorly. It should read "follow suit by embracing". Sorry about that.
I tend to think of this as the Money Ball-ization of the process.
In the book Money Ball (yet to see the movie), the Oakland A's realized - despite the hype - the big names aren't cost effective. That instead by going for people who would consistently get on base and score runs, they could build a roster that would win regularly without spending stupid amounts of money. You don't finish 1st but 2nd or 3rd might work.
In terms of content, it may be too expensive to for that 1M views post but if you can get 10 that get 100k views each, the advertising numbers work out the same and probably for a fraction of the cost. And betting everything on that single post is risky anyway because what if it doesn't catch?
There's also a marketing aspect as that BIG post has to have broader appeal. The smaller posts can hit individual niches.
Zynga pioneered this approach to such a degree that they were essentially the BuzzFeed of interactive entertainment. Later, many AAA games would follow suit embracing the Free-to-Play model. Higher production values with the same sleazy monetization strategies. The end result was games of all types selling their soul in the name of making a quick buck.
Web content has the same problem. In the face of content becoming a commodity, the reaction thus far has been to produce more content. More content means lower quality content. Lower quality content results in monetization becoming more difficult, and thus prevalent. More prevalent monetization leads to ads. Ads kill page performance, thus driving anyone away who doesn't have an ad blocker. That in turn leads to idiotic things such as paywalls and traditional media being turned into a glorified blogging platform (cough Forbes). It's a race to the bottom.
The solution to this of course, is to simply make a high quality product. Ensure the content is top-notch, kill anything that isn't. Make sure page performance is excellent. Hand-curate ads such that they're non-invasive, fast, and not killed by ad-blockers. Admittedly the last point is difficult, but it can be done. If the publication is sufficiently niche, a subscription model could actually be appropriate in lieu of ads; nautil.us is a fantastic example of this.
In the end, it boils down to the classic error of the suits screaming "monetize!", ruining their product and shooting themselves in the foot in the process. This same dynamic applies to games, print media, and even startups alike. There's a reason YC constantly reiterates that monetization efforts are foolish in the face of a product that isn't great.