Content is Free - Just In Time for the Recession

Here's another reason why the people banging the "content is free" drum are barking up the wrong tree: the coming recession.

As Henry Blodget notes, if a recession is on the horizon (and he's compiling the evidence for it) it's bound to hit online advertising. Yet just at the moment when storm clouds are gathering, the "content is free" chorus is clamoring ever more loudly for publishers to drop their subscription services and increase their dependence on advertising.

Erick Schonfeld of TechCrunch does some arithmetic on the advertising potential of the Wall Street Journal website should the subscription wall come down, and the results are singularly unimpressive. Based on 10 million website visitors (a number that soon-to-be-owner Rupert Murdoch is throwing around), Schonfeld calculates a potential $60 million in annual revenues for wsj.com. This assumes a fairly robust $25 CPM.

Given that wsj.com already generates an impressive $50 million in annual revenue from subscriptions, a 20 percent increase for throwing open the barn door does not seem fantastic. And if the recession comes, and advertising comes under serious pressure, there could be minimal if any gain. The "content is free" advocates, who think advertising alone will sustain publishers, may be mistaken.

In a recession it would be best if publishers were able to tap into multiple revenue streams -- giving them more than one leg to stand on. Subscription and advertising can work in tandem to strengthen a publisher's revenue base, especially in an adverse climate. So why is the "content is free" chorus singing only one off-key note?

Tags: paidcontent, subscription, wsj.com, content is free