Are Online News Sites Running On Flawed Revenue Models?
The Motherboard site from Vice Media ran a story today (Sunday, May 22, 2016) written by Joshua Kopstein: “News Sites Are Tracking Your Web Traffic More Than Porn Sites”. Mr. Kopstein based his story on the draft of a study titled “Online Tracking: A 1-million-site measurement and analysis” written by Steven Englehardt & Arvind Narayan of Princeton University.
Mr. Kopstein quotes Messrs Englehardt & Narayan: “’Sites on the high end of the spectrum are largely those which provide editorial content. Since many of these sites provide articles for free, and lack an external funding source, they are pressured to monetize page views with significantly more advertising’”
As a subscriber to a number of prominent online sites published by “leading” brick and mortar newspapers, I need to disagree. Even though I am paying one of these sites, the online New York Times, approx $20 per month, I am still experiencing the “significantly more advertising” problem.
So I must say “[providing] articles for free” is, for me, synonymous with providing paying subscribers with articles. Take this logic a step further and find a badly flawed business model: these publishers have decided they can’t compete with the “human brainless” likes of Google News/Bing News/Facebook News without pumping up an advertising business model with a little bit of paid subscription sauce.
The end result is a bad experience for subscribers, advertisers, and the web surfing public. I don’t think I am getting my monies worth from the subscription since I have to suffer through the interminable page loads, forced attention to meaningless full page ads, etc of online news in 2016. Sure I could add an ad blocker (actually I use Microsoft Edge, which has yet to release its extensions so an ad blocker is not, presently, an option) which, of course, would obliterate the publisher’s notion of juggling two contradictory rev models at the same time. But I am paying them ANYWAYS, so why should I have to take this step? Add another notch to the paid subscription “blues” item list.
The other unfortunate truth of this income plan is it doesn’t deliver the needed dough for the publisher. Just take a look at the most recent quarterly return for the NYT. You can’t escape a non-GAAP presentation of earnings which, for me, is a big warning flag of what may actually be a badly bleeding rev wound.
Funny, it was a Times writer, Ms. Gretchen Morgenson who got me thinking this way. She wrote a story titled “Fantasy Math Is Helping Companies Spin Losses Into Profits”, which NYT published onine on April 26th 2016. Here’s a quote from her on the topic of the danger investors meet with when presented with non-GAAP earnings presentations: “As a result, major public companies reporting results that are not based on generally accepted accounting principles, or GAAP, has grown from a modest problem into a mammoth one.”
My Pavlovian reaction: Show me Non GAAP & I am out of here.
Somebody will likely get this right. I would be willing to pay a BIT more each month to be ad free. Stop drooling news publisher!