Adam Thierer and I have been trying to drive home a simple message in the ongoing debate about targeted online advertising and privacy: “There is no Free Lunch!” We don’t have a lot of friends in this debate, since nearly everyone else seems to assume that online content and services will just continue to fall like manna from heaven if politicians strangle advertising online. So I was particularly heartened to read the following from Shelly Palmer:
This is the most serious question facing content producers today. Content costs money to produce. Third-party advertising/sponsor support is one model, promoting your own products is another, subscription is a third. At the end of the day, there are only three ways it works: I pay, you pay or someone else pays. Unfortunately, there is no business model called “no one pays.” In the case of MediaBytes, the model is “I pay.” It works for me as stated above. But, apparently, a fairly large number of people in my audience are uninterested in seeing even relevant product offerings. Is advertising over? If so, what’s next?
Amen! Shelly hosts a daily Internet talk show on technology and media called MediaBytes. He recently tried inserting a short ad at the beginning of the show to cover the significant costs of production:
The show is produced every business day and requires a research staff, a writer (me), an editor, an encoding/distribution manager and an affiliate relations staff. The reason for the production overview is that, this particular two-minutes may look like a talking head combined with some graphics and clips, but the work flow for any given show takes approximately 6 hour and all of the people involved in the production are on salary here at Advanced Media Ventures Group. And, for the record, MediaBytes, and the associated production materials, takes up approximately 25% of my day.
Unfortunately, Shelly’s audience seemed to feel entitled to receive the fruit of his hard work for free—without suffering the agony of watching… horror of horrors: advertising!. Continue reading →