TPOI and Advertising
I was recently advised to return to the mainstream media. I've been doing some reading and some thinking. When I complain about The Media doing a bad job, I should complain more clearly: the mainstream media are very, very good at serving their customers and creating content relevant to their customers' interests. However, their readers, listeners, and watchers are not their customers: readers, listeners, and watchers are their product. Let me show you! I am also, of course, showing you that I read a lot of the excellent Jonathan Schwarz.
From the New York Times Media Group's annual report: 64.7% of revenue comes from advertising. From the Tribune Group annual report (Chicago Tribune and LA Times) : 79.7% of revenue comes from advertising. From the Washington Post Company's annual report: 34.8% of revenues from advertising, compared to 20% from subscribers and circulation. From the News Group, parent of FOX News and the New York Post tabloid, comes a frank statement: "The primary methods of competition in broadcast television are the development and acquisition of popular programming and the development of audience interest through programming promotion, in order to sell advertising at profitable rates," which is a very nice way of saying that everything the News Corp's TV channels, radio stations, and print holdings show you that isn't advertising is there to get you to stick around for the advertising. This isn't a complete list of The Mainstream Media, but the reports I just cited cover an awful lot of the media environment, which could be a problem in itself: monopolies, duopolies, and oligopolies in any industry serve no-one's interests but their own.
Now, I may be a little over-sensitive to advertising. This is what kind of person I am: I roll my eyes at NPR's psudeo-advertising blurbs, I drift in and out of sympathy for Adbusters, and I'm cranky about the amount of advertising that shows up in comics. By the way - from Marvel Comics' annual report: 15% of revenues from advertising, and on average ten pages of advertising in a thirty-two page comic book.That said, what I want to do here is a fairly simple round of a game that knows no party affiliation, a game called Follow The Money.
Picture yourself in The Industry - any industry, really. You do two main things. The first thing makes you about 64.7% of your money, and that money comes in chunks. The second thing makes you the rest of your money and it comes in little bits. You need to put both of them together to have a viable business. This doesn't need to be the newspaper business - heck, I work for a business like that. We have two big clients that are about 65% of our income and a bunch of smaller clients. When those two big clients call us up, we hustle. If you want to stay in business, that's the only sane thing to do. It doesn't surprise me at all that a larger business in an analogous situation does the same thing.
Most print publications are heavily subsidized by advertising, to the point where the newsstand price is below cost. That's part of what keeps them affordable - go ahead and look at the prices of publications that are funded just by subscriptions and you'll find prices that rapidly climb over the price of a mainline newspaper or magazine. Each individual reader is not worth very much money to the publication. In constrast, when someone who controls a $100,000 advertising contract calls the Times, their impact is immediate and measurable. There is no question of how much the paper's bottom line will be affected. Further, if a story is being written that concerns a company that advertises with the Times, the reporters would be irresponsible not to call them for comment. The reporters usually can't hide that they're doing a story - it would be irresponsible journalism and bad business. So the advertisers often know ahead of time if a story might appear, and can push the editors of the paper into making an actual choice: run the story or don't. The editors can see the consequences of this choice. If you or I call the Times up, it's always after the story has run, and we represent little dribbles of income. We can be ignored. We'll find something else to be pissed about - there's always something. Even if we do decide to turn our backs on the Times, that's not much. If I get really worked up and find 100 friends who subscribe and convince them to quit with me (could you do it?), that's usually less money than one advertiser represents. It's also tough to tie that change to one specific story.
Please notice that this picture of the news industry is coming just from the companies' own numbers and a little logic. There is no conspiracy theory going on here, just a lot of people acting in their own self-interest. To take an example, the Times wants to stay in business and General Motors wants to stay in business. The Times makes a chunk of money from selling advertising to GM. GM makes a chunk of money from selling Chevy Corvairs. Articles in the Times that say "Chevy Corvairs are unsafe" will result in less money for GM. GM's people therefore tell the Times to expect less money from GM if the article runs. The Times will probably decide not to run the article - regardless of the article's truth value.
This is already a very bad situation if you think that a newspaper's job should be to create and maintain an informed, engaged citizen body. So go ahead and think about television and radio, mediums that depend on advertising even more than print does because of the difficulty of extracting revenue directly from their listeners and viewers. In light of that, the News Corp's quoted statement to its shareholders paraphrases as "don't worry, we're concentrating on making money." That's rational. I can't help but wish, though, that a company whose way of making money is "the development and acquisition of popular programming and the development of audience interest through programming promotion, in order to sell advertising at profitable rates" would call itself something besides the News Corp. Maybe "Entertainment In The News Genre Corp." If making money is the primary goal and advertising is the primary way of making money, the goal of creating and maintaining an informed, engaged citizen body is going to get it in the forehead.
This too is already a very bad situation if you think that a news-based print publication, radio station, or TV channel's job should be to create and maintain an informed, engaged citizen body. So go ahead and think about the Internet, a medium that depends on advertising - well, somewhere between print and TV. The Internet's dynamic hasn't solidified yet, but I'm worried about it because the "let's just pay for it with ad revenue" model seems to be spreading. I don't think that that model is sustainable. This general idea about things sponsored by advertising is probably in your consciousness already, but I don't want it to leave prematurely. Any enterprise that depends on advertising revenue to stay in operation is stuck in a very questionable position because some control of that enterprise has been handed to advertisers. The more dependent the enterprise is, the more control advertisers as a whole have. There are signs that more and more of the Internet is composed of enterprises like that. Considering the examples of advertising-dependent print, radio, and TV, we can safely say that that's bad.
Will the Internet be different?
Part of what makes the Internet such a valuable contribution to human civilization, despite a litany of flaws, is the huge enabler it's been to creating, consuming, and evaluating information. It has been a huge accelerant to CCEI, which I regard as critical to humanity's future efforts in avoiding Fail. It's hard to overstate what a huge boon the Internet has been to CCEI when it works well. It's hard not to indulge in triumphalism about it: there are many things about the Internet that are astonishingly Win in one way or another: the sweeping landscape of Blogistan (from geezer LJ to Steve-Rogers-murdering MySpace and relative new kid Blogspot), the rise of on-demand media from every outlet that can afford to give it away, and the proliferation of commercial opportunities. This is part of why the media conglomerates that compose what we currently think of as The Media have spent the last decade scrambling to get onto the Internet and familiarize themselves with it.
I am going to assume that you can think of plenty of good things about the Internet. It is important to keep in mind that they exist and they are many, because the Internet is susceptible to many old problems and several new ones that are toxic not just to the general wonderfulness of the Internet but to American culture and survival.
The Internet will fail as a CCEI enhancer if it doesn't, in its maturity (which is probably not here yet), provide meaningfully more free speech than was possible and/or practical before. That's not to say that less free speech is the only way for the Internet to careen into Fail, but it's the one I'm worried about at the moment. One persistent limit on free speech in America has been the cynical corollary that "free" speech is as free as printing presses. Your speech in the form of the print, radio, or television is not free because you, barring extraordinary cases, don't own the means to publish, transmit, or otherwise produce. In the case of the Internet, this is reflected by the fact that your access to the discourse and ability to participate in it are constrained. Your internet service provider has Terms of Service that you have to acquiesce to, as do any web host you may use, any community you may participate in, any other service you may use and, of course, any LJ you may author. This is on top of any advertising you may host - and we just saw what some of the problems with advertising are. Yet with all that, the Internet has still provided some damn cheap printing presses. Remember, though: the Internet does not magically make things free. The economics are still changing, and changing rapidly, but the Internet does not and will not create Free Lunches. For instance, LiveJournal - like radio and television - is an enterprise that gives you what you want, but you're not the customer (no, not even paid accounts). LJ is switching to an advertising-based business model. To repeat, "advertising-based" means that you are not the customer. You are the product. As discussed, it is crucially important for advertising-based companies to keep their customers happy.
The Internet also has the free-market-in-the-good-way dynamic going, so that's working against efforts to crack down on free speech. It's a dismally familiar story: reactionaries, entrenched interests, and so on. I think that one of the most productive things that an average person can do is to speak their mind, often, and loudly. Throwing a few bucks in the direction of the ACLU or EFF wouldn't hurt, either, but most people that I think are reading this are shorter on money than time (and not exactly rolling in either). Sealand is still a going concern in some ways, as are Freenet and PeaceFire.
The Internet is in the process of becoming the mainstream. All of the companies that I mentioned at the beginning have web presence and we're all starting to treat a reference to their web sites as the same thing as a reference to their print or broadcast forms. Part of what I like about that is that critiques of the mainstream can show you their sources much more easier. Bob Somerby and this cranky fellow that I disagree with can both show you exactly what they think is wrong, and you can compare them both to their sources very easily. This is good.
I don't know what's going to happen as time goes on. My best guess is that Things Will Change. I hope that we'll find a way to have a class of people dedicated to the task of creating and maintaining an informed, engaged citizen body. That won't be free, though - and the process of getting there will require that a lot of very profitable businesses watch their product walk out the door. This will not make them happy, and they will react. People who were used to getting things that seemed free will no longer be getting them for free, and they too will react. We will all have to learn that when you seem to be getting something for nothing, you are probably giving something away. In the case of the Internet, usually that's advertising and the service of giving the scientists of advertising more experimental data.
I don't think that enterprises supported by advertising are necessarily bad. I'm here, after all. But I think that it's something you should walk into with your eyes open.
DROMIO OF SYRACUSE: Master, if you do, expect spoon-meat; or bespeak a long spoon.
ANTIPHOLUS OF SYRACUSE: Why, Dromio?
DROMIO OF SYRACUSE: Marry, he must have a long spoon that must eat with the devil.
-Comedy Of Errors, 4.2
From the New York Times Media Group's annual report: 64.7% of revenue comes from advertising. From the Tribune Group annual report (Chicago Tribune and LA Times) : 79.7% of revenue comes from advertising. From the Washington Post Company's annual report: 34.8% of revenues from advertising, compared to 20% from subscribers and circulation. From the News Group, parent of FOX News and the New York Post tabloid, comes a frank statement: "The primary methods of competition in broadcast television are the development and acquisition of popular programming and the development of audience interest through programming promotion, in order to sell advertising at profitable rates," which is a very nice way of saying that everything the News Corp's TV channels, radio stations, and print holdings show you that isn't advertising is there to get you to stick around for the advertising. This isn't a complete list of The Mainstream Media, but the reports I just cited cover an awful lot of the media environment, which could be a problem in itself: monopolies, duopolies, and oligopolies in any industry serve no-one's interests but their own.
Now, I may be a little over-sensitive to advertising. This is what kind of person I am: I roll my eyes at NPR's psudeo-advertising blurbs, I drift in and out of sympathy for Adbusters, and I'm cranky about the amount of advertising that shows up in comics. By the way - from Marvel Comics' annual report: 15% of revenues from advertising, and on average ten pages of advertising in a thirty-two page comic book.That said, what I want to do here is a fairly simple round of a game that knows no party affiliation, a game called Follow The Money.
Picture yourself in The Industry - any industry, really. You do two main things. The first thing makes you about 64.7% of your money, and that money comes in chunks. The second thing makes you the rest of your money and it comes in little bits. You need to put both of them together to have a viable business. This doesn't need to be the newspaper business - heck, I work for a business like that. We have two big clients that are about 65% of our income and a bunch of smaller clients. When those two big clients call us up, we hustle. If you want to stay in business, that's the only sane thing to do. It doesn't surprise me at all that a larger business in an analogous situation does the same thing.
Most print publications are heavily subsidized by advertising, to the point where the newsstand price is below cost. That's part of what keeps them affordable - go ahead and look at the prices of publications that are funded just by subscriptions and you'll find prices that rapidly climb over the price of a mainline newspaper or magazine. Each individual reader is not worth very much money to the publication. In constrast, when someone who controls a $100,000 advertising contract calls the Times, their impact is immediate and measurable. There is no question of how much the paper's bottom line will be affected. Further, if a story is being written that concerns a company that advertises with the Times, the reporters would be irresponsible not to call them for comment. The reporters usually can't hide that they're doing a story - it would be irresponsible journalism and bad business. So the advertisers often know ahead of time if a story might appear, and can push the editors of the paper into making an actual choice: run the story or don't. The editors can see the consequences of this choice. If you or I call the Times up, it's always after the story has run, and we represent little dribbles of income. We can be ignored. We'll find something else to be pissed about - there's always something. Even if we do decide to turn our backs on the Times, that's not much. If I get really worked up and find 100 friends who subscribe and convince them to quit with me (could you do it?), that's usually less money than one advertiser represents. It's also tough to tie that change to one specific story.
Please notice that this picture of the news industry is coming just from the companies' own numbers and a little logic. There is no conspiracy theory going on here, just a lot of people acting in their own self-interest. To take an example, the Times wants to stay in business and General Motors wants to stay in business. The Times makes a chunk of money from selling advertising to GM. GM makes a chunk of money from selling Chevy Corvairs. Articles in the Times that say "Chevy Corvairs are unsafe" will result in less money for GM. GM's people therefore tell the Times to expect less money from GM if the article runs. The Times will probably decide not to run the article - regardless of the article's truth value.
This is already a very bad situation if you think that a newspaper's job should be to create and maintain an informed, engaged citizen body. So go ahead and think about television and radio, mediums that depend on advertising even more than print does because of the difficulty of extracting revenue directly from their listeners and viewers. In light of that, the News Corp's quoted statement to its shareholders paraphrases as "don't worry, we're concentrating on making money." That's rational. I can't help but wish, though, that a company whose way of making money is "the development and acquisition of popular programming and the development of audience interest through programming promotion, in order to sell advertising at profitable rates" would call itself something besides the News Corp. Maybe "Entertainment In The News Genre Corp." If making money is the primary goal and advertising is the primary way of making money, the goal of creating and maintaining an informed, engaged citizen body is going to get it in the forehead.
This too is already a very bad situation if you think that a news-based print publication, radio station, or TV channel's job should be to create and maintain an informed, engaged citizen body. So go ahead and think about the Internet, a medium that depends on advertising - well, somewhere between print and TV. The Internet's dynamic hasn't solidified yet, but I'm worried about it because the "let's just pay for it with ad revenue" model seems to be spreading. I don't think that that model is sustainable. This general idea about things sponsored by advertising is probably in your consciousness already, but I don't want it to leave prematurely. Any enterprise that depends on advertising revenue to stay in operation is stuck in a very questionable position because some control of that enterprise has been handed to advertisers. The more dependent the enterprise is, the more control advertisers as a whole have. There are signs that more and more of the Internet is composed of enterprises like that. Considering the examples of advertising-dependent print, radio, and TV, we can safely say that that's bad.
Will the Internet be different?
Part of what makes the Internet such a valuable contribution to human civilization, despite a litany of flaws, is the huge enabler it's been to creating, consuming, and evaluating information. It has been a huge accelerant to CCEI, which I regard as critical to humanity's future efforts in avoiding Fail. It's hard to overstate what a huge boon the Internet has been to CCEI when it works well. It's hard not to indulge in triumphalism about it: there are many things about the Internet that are astonishingly Win in one way or another: the sweeping landscape of Blogistan (from geezer LJ to Steve-Rogers-murdering MySpace and relative new kid Blogspot), the rise of on-demand media from every outlet that can afford to give it away, and the proliferation of commercial opportunities. This is part of why the media conglomerates that compose what we currently think of as The Media have spent the last decade scrambling to get onto the Internet and familiarize themselves with it.
I am going to assume that you can think of plenty of good things about the Internet. It is important to keep in mind that they exist and they are many, because the Internet is susceptible to many old problems and several new ones that are toxic not just to the general wonderfulness of the Internet but to American culture and survival.
The Internet will fail as a CCEI enhancer if it doesn't, in its maturity (which is probably not here yet), provide meaningfully more free speech than was possible and/or practical before. That's not to say that less free speech is the only way for the Internet to careen into Fail, but it's the one I'm worried about at the moment. One persistent limit on free speech in America has been the cynical corollary that "free" speech is as free as printing presses. Your speech in the form of the print, radio, or television is not free because you, barring extraordinary cases, don't own the means to publish, transmit, or otherwise produce. In the case of the Internet, this is reflected by the fact that your access to the discourse and ability to participate in it are constrained. Your internet service provider has Terms of Service that you have to acquiesce to, as do any web host you may use, any community you may participate in, any other service you may use and, of course, any LJ you may author. This is on top of any advertising you may host - and we just saw what some of the problems with advertising are. Yet with all that, the Internet has still provided some damn cheap printing presses. Remember, though: the Internet does not magically make things free. The economics are still changing, and changing rapidly, but the Internet does not and will not create Free Lunches. For instance, LiveJournal - like radio and television - is an enterprise that gives you what you want, but you're not the customer (no, not even paid accounts). LJ is switching to an advertising-based business model. To repeat, "advertising-based" means that you are not the customer. You are the product. As discussed, it is crucially important for advertising-based companies to keep their customers happy.
The Internet also has the free-market-in-the-good-way dynamic going, so that's working against efforts to crack down on free speech. It's a dismally familiar story: reactionaries, entrenched interests, and so on. I think that one of the most productive things that an average person can do is to speak their mind, often, and loudly. Throwing a few bucks in the direction of the ACLU or EFF wouldn't hurt, either, but most people that I think are reading this are shorter on money than time (and not exactly rolling in either). Sealand is still a going concern in some ways, as are Freenet and PeaceFire.
The Internet is in the process of becoming the mainstream. All of the companies that I mentioned at the beginning have web presence and we're all starting to treat a reference to their web sites as the same thing as a reference to their print or broadcast forms. Part of what I like about that is that critiques of the mainstream can show you their sources much more easier. Bob Somerby and this cranky fellow that I disagree with can both show you exactly what they think is wrong, and you can compare them both to their sources very easily. This is good.
I don't know what's going to happen as time goes on. My best guess is that Things Will Change. I hope that we'll find a way to have a class of people dedicated to the task of creating and maintaining an informed, engaged citizen body. That won't be free, though - and the process of getting there will require that a lot of very profitable businesses watch their product walk out the door. This will not make them happy, and they will react. People who were used to getting things that seemed free will no longer be getting them for free, and they too will react. We will all have to learn that when you seem to be getting something for nothing, you are probably giving something away. In the case of the Internet, usually that's advertising and the service of giving the scientists of advertising more experimental data.
I don't think that enterprises supported by advertising are necessarily bad. I'm here, after all. But I think that it's something you should walk into with your eyes open.
DROMIO OF SYRACUSE: Master, if you do, expect spoon-meat; or bespeak a long spoon.
ANTIPHOLUS OF SYRACUSE: Why, Dromio?
DROMIO OF SYRACUSE: Marry, he must have a long spoon that must eat with the devil.
-Comedy Of Errors, 4.2