One of the biggest debates in the media space has been the ability to effectively and profitably monetize traditional-to-digital properties. These properties include newspapers, magazines, etc. A number of companies have tried various models, including — pay walls, freemium, subscription, etc. However, very few of them have actually worked.
The reason is that content is readily available for free on most sites. If www.nytimes.com was to put up a wall, users can get the same content for free from CNN.com.There is no reason to pay for content that is free elsewhere.
Another topic that keeps coming up is local media. Newspapers have been moderately successful in creating town-specific publications. The reason they succeed is because they reach a highly targeted audience in an extremely specific geographical area. Many of these newspapers are still in business where as big media properties are folding.
In order to fill this gap, companies of all sizes are attempting to crack this market. The chances of success are limited for the following reasons:
- Scale: When you try to reach Anytown, USA with a population of 45,000 people, it’s a challenge to scale beyond a handful of towns.
- Reach: Even if 100% of your potential audience was aware of your site, how would you make money from the site? Advertising? Subscription?
- Cost: Setting up an online portal takes a few hundred dollars. Staffing that portal costs thousands. Will revenue able to sustain content gathering and employment costs?
One option is user-submitted content. But, very few sites have been able to effectively do that. For specific topics, that becomes even more difficult.
