A Sustainable Model for Online Content Businesses

Community Model
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The Internet is one of the most significant technological advances we've seen. It's an essential part of my existence, and I have no doubt it will catalyze dramatic advances across society.

But for all the good it creates, the Internet achieves "Epic Fail" status in one key regard: Sustainability.

How can businesses, even small ones with realistic goals, harness this tool for profit? Specifically, how can a content-centric guy like myself ever make a reasonable wage creating Web material?

I've tried to wrap my head around subscription models and micropayments. For a while I hedged my bets on high yield CPCs and CPMs, hoping advertisers would eventually realize targeted content builds targeted audiences that are receptive to targeted advertising.

Yet none of this ever felt right. Targeted advertising works to some degree, especially for Google, but good money requires ungodly amounts of Web traffic. Audiences plateau at their natural levels, and there's little chance you'll make enough money to run a Web content business and support a family if those levels don't yield tens of millions of page views.

And then there's the Web's tendency to separate content from its container, which means the value I derive from the content in my RSS reader does not yield financial rewards for the content creators. My sympathy for their plight, while significant, will never extend to a Google Reader boycott.

So if the Web is great for audiences but bad for traditional content models, what am I supposed to do? Give up? Go print-only? Hope one of those loony pay walls shifts the Zeitgeist away from free?

Perhaps I'm stubborn or naive or a little too enamored with this Internet business, but some combination of passion and curiosity compelled me to poke at the digital content dilemma until I could directly address the realities. After years of consideration and frustration, I've finally wrapped my mind around the following conclusions:

  • If Web audiences are both fickle and empowered, I need to serve them great content where they already gather. I need to go to them.
  • The Web's natural separation of content from container undermines traditional advertising. Put bluntly: stop cramming the old model's square peg into the Web's round hole.
  • Web content is rarely profitable on its own, so I need to use content to aggregate attention and serve up products the audience will pay for.
  • If I lack the resources and impulse to create artificial scarcity and its associated lock-in barriers, I need to relinquish control. This means setting most of my content free, working with thin margins, experimenting liberally but efficiently, and fighting to stay small.
  • If old models built around geographic scarcity and untargeted advertising don't work anymore, don't get all weepy about it. Acknowledge and move on.

This is what I sought: a structure that works with the Web, not against it.

And now I want to talk about it.

Over the following sections I outline the different groups, roles and tools that constitute this model. I also toss around a few numbers for the sake of discussion. Keep in mind that your mileage will vary depending on the context of your own business, the audiences you target, and the revenue streams you tap.

One more thing: this model isn't complete, and I doubt it ever will be. I believe in perpetual betas and adaptation. I also believe in collaboration and constructive criticism, so I welcome any and all input. The hive mind is infinitely smarter than mine.

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