This is not just a case of legacy businesses failing to keep up with the times. Consider whether ESPN could survive on its advertising alone: It would lose two-thirds of its revenue.
And so, the survivors have looked to pay walls and digital subscriptions. These methods are working ... sort of. But they're also adding to our already endemic information gap. There are enough educated, well-off readers who will go out of their way for New York Times or Wall Street Journal content to keep such entities afloat. But there's a much larger swath of America that is perfectly content, or simply forced by economics, to read whatever is free, even if it's a dumbed-down 100-word recap of actual journalism. If we truly value a free press and an educated populace, it's time we fix this broken system.
A Familiar Content Model
However, we can't just force the cable TV model upon this one. While there are hundreds of cable channels, there are millions, if not billions, of content-rich Web sites. So what do we do?There's an existing model that could help, found, oddly enough, in another struggling industry: music publishing. Here's how it works: Nearly all songwriters and performers belong to a performance rights organization (PRO) such as ASCAP, BMI, or SESAC, to name three of the biggest. These companies keep track of songs played on radio stations all over the world (including online stations such as Pandora (P)), and in malls, restaurants, clubs, stadiums -- wherever music is played commercially. Any venue or business that plays copyrighted music in public is required to pay an annual licensing fee, and the PROs then divvy up those fees among their member artists according to who received the most airplay in a given quarter. This is how Lady Gaga or Mumford & Sons get paid when their songs are played on the radio or in a bar, and, cent by cent, it can add up to millions. Internet content creators need a similar organization. It would charge ISPs like Comcast or Verizon (VZ) a small licensing fee (say, $5 a month per subscriber) and then split up that revenue among its members according to Web traffic metrics -- perhaps a combination of page views and time-on-site measures, which would ensure that oft-visited search engines like Google or Bing don't eat up all the available revenue. It's important to note that, in the music industry, this model acts in tandem with album sales and downloads, concert tickets and other forms of direct artist income; it is a complementary revenue stream. Therefore, sites like NYTimes.com could still offer paid subscriptions, but they would finally receive some compensation for their freely available content as well. The middlemen of the Internet have profited far too much in the past decade. It's time we reward our best-performing content creators. Otherwise, there will continue to be little motivation for companies to invest in well-researched, in-depth reporting. Policing society is hard, often thankless, work, and if advertising alone is to pay the bills, we better get used to even more hilarious cat videos and Royal Baby Bump slideshows.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV