Magazine article Russian Life

Alligators and Eyeballs

Magazine article Russian Life

Alligators and Eyeballs

Article excerpt

The Great Recession has been snapping up victims like a thousand-pound alligator in Gary Larson's boneless chicken farm. And it turns out that hundred-year-old automakers are as defenseless as freshly-minted internet startups.

The magazine world has also been hard hit--at least weekly we hear of another closure. The reason is simple: magazine publishing's core business model--advertiser subsidized publications--is moribund. Judge for yourself. The model is this: 1 create a vehicle (magazine) that delivers eyeballs (readers, viewers, targets) to advertisers; 2 maximize the number of eyeballs by giving away content for free (e.g. 12 issues of Vanity Fair for $12); 3 receive bounty (advertising fees) from advertisers; 4 rinse and repeat.

The problem is that, when ad revenue dries up, as it does in a recession, or when advertisers find ways to gather eyeballs on their own (e.g. via the internet), the model collapses.

Newspapers were the first to be hit--decimated when Craigslist began offering classified advertising for free (some papers received over 50% of their ad revenue from classifieds). Now magazines are facing similar pressures.

Publishers are bemoaning the fact that they cannot compete with free online content, that they must find a way to make people pay to read news and magazine articles in their web browsers. But the reality is that for decades magazine and newspaper publishers have given away their publications for free, never asking readers to pay the true costs of their editorial product. …

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