Is There Enough Advertising To Support Free?

A follow on from the post yesterday referring to Chris Anderson’s speech on the concept of Free: Rupert Murdoch decision to keep some of the Wall Street Journal paid content has caused some reaction in the blogosphere.

Fred Wilson says that Murdoch is making his first digital mistake - wasn’t MySpace his first digital mistake? - anyway, Wilson says:

Here’s the deal. Digital media is not about scarcity and never will be. That’s the old media game. Online it’s about ubiquity, about being part of the conversation, about links, authority, page rank, and if you are a news organization like the WSJ - its about anchoring the discussion… I regret the mistakes we made at TheStreet.com with a paid content strategy and I learned from it. Never again. Rupert will learn that lesson too. Apparently the hard way.

Ooh, we see the headline now: ‘Venture Capitalist to teach Media Tyrant lesson or two’… Anyway, here’s a far more informative opinion from Kevin Kelleher over at GigaOM where he wonders what everyone’s going to do when they realize there’s not enough money to go around:

Advertisers are pushing more ad dollars online, but the number of sites to house them are growing even faster. And so there is more and more discussion this month that CPM rates are falling. (There remain optimistic exceptions, however.) The relatively balmy climate of Web 2.0 means more sites are looking for ad revenue just as mainstream advertisers are contemplating cuts in their ad budgets… Rupert Murdoch was expected to tear down the subscription wall at the Wall Street Journal, but he revealed something quite different at Davos today.



Others will be tempted to follow Murdoch’s lead here. I’m not saying it’s a good thing — I doubt very much it will work as more than a stopgap fix. But the worse the overall economy gets, the more executives of companies making a buck from online ads will be pressured to do something — anything — to revive revenues.



That means a) cutting costs that are often already near the bone, b) getting very creative about finding new revenue streams or c) putting up pay walls. For some, paid subscriptions may be the easiest lever to pull.

CPM Rates Drop, Will Pay Walls Rise Again? - GigaOM
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