Time Magazine May Join Newspapers In Committing Suicide By Charging Online

from the good-luck-with-that dept

So, say you're a general news magazine that's struggling to remain even remotely relevant in an internet era... what do you do? Apparently if you're Time, you think about charging. This isn't all that surprising, really, given that Time Magazine published that poorly thought out article arguing for micropayments for online publications. It just makes you wonder who these people are making these decisions and if they ever bothered to look at all of the attempts in the past to charge for such content online.
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Filed Under: business models, charging, magazines, paywalls, time magazine
Companies: time


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  1. identicon
    Mr Big Content, 1 Jun 2009 @ 3:46am

    Honourable Thing To Do

    You may think of them as “stupid” and “foolish”, but what company would want to live in a world where content is available for free? Better to go down valiantly fighting this horrible new world, than to meekly acquiesce to it and give up everything you believe in. It’s the honourable thing to do. Better dead than read!

    link to this | view in thread ]

  2. identicon
    Anonymous Coward, 1 Jun 2009 @ 3:55am

    See Mike, this is why I say I wish you would take a moment to re-read your stuff and consider what you are saying.

    Even the title "Committing Suicide By Charging Online" is laughable. Many people would considering it committing suicide to offer their entire content online for free, using only the ad supported means which appears for the moment to be a failing (or at least flailing) business model.

    Have you considered the thought that perhaps this is the start of a NEW trendline, something you should be watching and not laughing about? Perhaps we have reached a point where the "everything free" web isn't an acceptable business model, and that companies are heading in other directions, perhaps willing to give up the vast majority of the web's users in order to profitably serve a narrower group?

    link to this | view in thread ]

  3. identicon
    EH, 1 Jun 2009 @ 4:09am

    Time is a little different than newspapers...

    ... sometimes they have things that I would consider paying for.

    link to this | view in thread ]

  4. identicon
    Tristan Phillips, 1 Jun 2009 @ 4:51am

    Sounds reasonable until

    you realize that Time Warner is a monopoly in many, if not most, of the areas it serves.

    Remind me again how a monopoly prices itself out of the market?

    link to this | view in thread ]

  5. identicon
    Another AC, 1 Jun 2009 @ 4:54am

    Bingo

    Exactly. Offering content for no cost to the majority of the web's users does nothing to sustain a business financially. Offering content via paid subscription to a tiny fraction of the web's users will sustain a business financially if enough subscribers can be attracted. The number of potential free readers is entirely irrelevant.

    link to this | view in thread ]

  6. identicon
    Anonymous Coward, 1 Jun 2009 @ 5:04am

    Re: Bingo

    The WSJ is doing this, and apparently being fairly successful so far. Why should you give everything away for free with an upsell to something else, when the product you are producing is worthy of being paid for to start with?

    Sometimes I think Mike doesn't want anyone to have real business models, just that he wants everything to be free.

    link to this | view in thread ]

  7. identicon
    Brian McInturff, 1 Jun 2009 @ 5:18am

    Re: Bingo

    You can read a lot on wsj.com before you come up against the paywall, unlike in the past. Even so, the difference is that many more people will pay for quality mostly-unbiased journalism so I don't have much hope for Time following the same model.

    link to this | view in thread ]

  8. icon
    Mike Masnick (profile), 1 Jun 2009 @ 5:27am

    Re: Bingo

    Exactly. Offering content for no cost to the majority of the web's users does nothing to sustain a business financially.

    Yes, if you have no other business model in place. But if you did have a good business model in place it would work just great. Or did you not notice how much money Google makes by giving away all its service for free?

    Offering content via paid subscription to a tiny fraction of the web's users will sustain a business financially if enough subscribers can be attracted. The number of potential free readers is entirely irrelevant.

    Uh, it's extremely relevant if you have a smart business model.

    The problem with charging is that you can only charge in the absence of competition. With something like Time Magazine... there's tons of competition for that sort of information.

    Why is it that people keep thinking that giving content away for free means no business model?

    link to this | view in thread ]

  9. identicon
    AJB, 1 Jun 2009 @ 5:28am

    oh oh oh

    PLEASE PLEASE PLEASE start charging Time, Newsweek, NYT and LA Times!! PLEASE!

    link to this | view in thread ]

  10. icon
    Mike Masnick (profile), 1 Jun 2009 @ 5:30am

    Re: Re: Bingo

    The WSJ is doing this, and apparently being fairly successful so far. Why should you give everything away for free with an upsell to something else, when the product you are producing is worthy of being paid for to start with?


    The WSJ is a pretty special case (financially relevant information), and I still believe that they'll eventually realize that they could make more money with most of their content being free anyway.

    They're actually moving in that direction, as more and more of their content has been going free as they've increasingly struggled to sign up more subscribers.

    The problem with subscription based models online is that you limit your growth significantly.

    Sometimes I think Mike doesn't want anyone to have real business models, just that he wants everything to be free.

    Exactly the opposite. I want them to stop relying on dumb business models and start focusing on ones that have the most growth potential.

    link to this | view in thread ]

  11. identicon
    Peter, 1 Jun 2009 @ 5:35am

    Hmmm...

    I think the point Mike is making here is that people aren't finding value in some of these publications. Simply starting to charge for the same service does not increase that value. I think the real shift here is that simple information is no longer a scarce commodity (and therefore has a cost approaching 0) and these types of publications have to start offering something more in order to justify charging for the service. Whether you think it is 'right' to get content for free or not is irrelevant. If Times Magazine was having trouble with readership yesterday, simply charging a fee today without offering something new will certainly not get them more readers! If your buying populace does not see value in what you offer (even if you do!) then they will not be willing to pay for it.

    link to this | view in thread ]

  12. identicon
    Roadsider, 1 Jun 2009 @ 6:30am

    Cost v. Value

    There is cost and then there is value. I have no problem with the publishing industry charging for their online content if there is something there worth paying for.

    Mike keeps harping about "bad business models" but the paying for content thing has been going on for hundreds of years until the whole internet thing sprang up on them. There is nothing inherently wrong with it.

    I agree that the publishing companies did not do a very good job of positioning themselves in the digital arenas, but to say that they can only survive if they would just take a lesson from Google is rather specious. The industries are different. Google is simply a portal and an aggregator. It doesn't pay for its content.

    The publishing industry missed a big opportunity, but it had nothing to do with how to go free and make money. It had everything to do with the way it markets itself and build up its own value in the marketplace. For years, the newspaper industry operated with margins of 25% or more. Where did all that profit go? Certainly not into marketing itself better or figuring out how to best take advantage of new technologies.

    If they provide a good value with their content, people will pay for it. If they provide more of the same and just put a price tag on it, they are indeed doomed.

    link to this | view in thread ]

  13. icon
    Sneeje (profile), 1 Jun 2009 @ 6:55am

    Re: Cost v. Value

    I would like to see the serious look they gave their potential market and which consumers they believe they can capture with the paywall.

    As an example (perhaps not a representative one), I have Time, CNN, WSJ, Techdirt, TLF, HBS, Wired, etc., etc., etc. on RSS. I have to be honest, while the Time articles definitely provide me a different slice of the information that feeds me, it really has a "meh" factor in comparison to all of the other things I read.

    Meaning, I believe very few people receive their information from only one source, and the type of consumer I think TIME wants probably receives their information from many and I think they also want to customize what they receive.

    So as long as any other good sources are available, any time a paywall goes up, I'll just switch. The perception that maybe this is just the way of the future (that eventually everything will be paywall) ignores two things--a) the more things are paywall, the more people will take an ala carte approach (which will tend to drive prices down to compete among paywalled information sources, IOW, significant growth limitations) and b) as long as there are viable business models that don't require paywalls, there will continue to be significant price pressure and subscriber churn.

    Both of the above are key elements (straight out of business school) that would undermine any successful approach.

    link to this | view in thread ]

  14. icon
    Overcast (profile), 1 Jun 2009 @ 7:03am

    But in the end, past all of the various debates; the fact is that Time magazine doesn't offer anything unique enough to pay for. Some others might....

    But the news you find in Time, you can find 100,000 other places on the web half the time.

    Maybe I'm just biased, but even at the doctor's office; I don't read much of it :)

    link to this | view in thread ]

  15. icon
    BobinBaltimore (profile), 1 Jun 2009 @ 7:18am

    Just more...

    ...of the TechDirt ubiquitous "non-free is bad/stupid/dumb/inane...now it's 'suicide.'" Look, if a content producer has something of sufficient value and interest to its consumer population (maybe not you, but some consumers somewhere) then it might just work fine. I agree that Time, as a general-interest publication, has less differentiating it than say Dirtbike Monthly or another affinity publication. But the bottom line is that the days of giving away at no charge professionally produced content and journalism are numbered. And I, for one, do believe that there is enough demand among the readerships of a good number (certainly not all) of these publications to make them viable.

    There is a lot of academic blustering about the metaphysical nature of "value" on TechDirt...fact is that all content is not created equal. Quality content (that which is researched and reliable, with decent prose, good accompanying images and video, etc) is today and will continue to be more desirable than crap content on the same subject. Yes timeliness is a factor, yes availability is a factor and yes price is a factor, but the mere presence of price does not mean the whole thing is "stupid" or "suicide." Having a good business model is not limited to a business model that TechDirt/Masnick agrees with, though the verbiage on this site increasingly seems to make that equation.

    There are a number of comments, also, about how paywalls limit growth. Possibly true (depending on how growth is measured and what the business goals are for growth). But growth does not equal profit. And growth comes AFTER survival. Again, these are not theories, they are businesses with real costs, real employees and real shareholders. They don't have the arm-chair luxury that TechDirt does of pontificating without risk and playing a wait-and-see game. Yes, of course they rested on their laurels and fat margins for too long. The reality is that most businesses do get complacent somewhere along their lifecycle when it comes to
    market change. The uniqueness here is that a whole industry fell into it...wait, that's not unique: hello, steel, oil, automotive, etc., etc.

    And of course the reference to Google is irrelevant as they are in an entirely different business and have a totally different cost structure. The day Google produces de novo content is the day they charge for it.

    link to this | view in thread ]

  16. identicon
    Phoenix, 1 Jun 2009 @ 7:36am

    Re: Bingo

    @Another AC - forgive me, but your statement is ludicrous. Do you really think Google, Yahoo, or facebook would do better to offer their service to a much smaller number of paid subscribers? That's what you just said.

    The new models are out there, it just takes a creative mind to find them.

    link to this | view in thread ]

  17. identicon
    Anonymous Coward, 1 Jun 2009 @ 7:38am

    Re: Re: Bingo

    Mike, it isn't that giving content away isn't a business model - but it is a model only for certain businesses.

    Google's information is worthless without users. Straight up, their business model is ad supported, providing a service that is both universally needed (search) and relevant results which in turn creates targeted advertising spaces.

    Google creates zero content. Their cost to acquire new content is down to only the mechanical costs (servers and bandwidth) and presenting the ads is also a server and bandwidth only cost system.

    When you create nothing new, it is easy to be cheap, and thus Google is very profitable on often low click out rate ad sales, because their costs are very low to provide the service.

    Now you look at Time. A single article might cost a week of an employee's salary, plus editors, plus page layout, design, etc. Then they have the same server and bandwidth costs as Google. Time therefor would have to generate signficantly more revenue per page to break even.

    Worse yet, left wide open, Google would index their content, and provide it in context on their Google news page, selling more google ads and making more google money, while Time makes nothing (except exposure, which combined with a few dollars can buy a coffee at Starbucks).

    "it's extremely relevant if you have a smart business model."

    It's only relevant if your smart business model somehow gets rid of your costs. Actually producing unique content isn't cheap, people cost money, and they have to get paid. Ask Chris Anderson what it's like when you aren't making enough money to cover all the staff and all that you want to do. Ask him what it's like to produce a magazine that is half it's normal size because of a shortage of ad revenue.

    Google isn't the answer for everyone, that is something you need to learn.

    link to this | view in thread ]

  18. icon
    Overcast (profile), 1 Jun 2009 @ 7:44am

    You may think of them as “stupid” and “foolish”, but what company would want to live in a world where content is available for free? Better to go down valiantly fighting this horrible new world, than to meekly acquiesce to it and give up everything you believe in

    Well, perhaps they don't want to 'live in a world where content is free'. But others will offer it; so they can close their doors or compete. No one says they have to stay in business, the world will continue to exist without them.

    For many years content was 'free' on over the air TV and radio. Perhaps; consumers had to listen to advertisements, but the net cost to them in terms of cash was zero.

    So in the 80's we get Cable TV, that at first starts with just a fee for advertisement free (mostly) TV - as time passes, we see the same charge from the cable company; but now again with advertisements.

    So is it such a 'new' thing or is it just that the 'golden years' of being able to rake people for content over the 80's and 90's have passed?

    Time is still available for free at your local library and doctor's office, I do believe. Internet or no internet.

    The funny thing about this whole business of newspapers and magazines is that in every other 'business venture' you hear the zealots and others going on about how we have to 'save the environment' and 'conserve resources' - but oddly; in this particular industry the push is to keep paper rolling instead of doing it all online. Which; I'm not personally opposed to at all.

    I read my local newspaper daily on the web; yet each day Mon-Fri; I still buy a paper to read over lunch. Would I pay for their web-site online? Maybe - because they offer what others do not - local news. Any company who did "global" news are the ones with massive amounts of competition now.

    Perhaps Time should only post a limited number of articles on the web and then you'll get more if you subscribe or buy the magazine. I suspect there are a vast number of ways out there to make even more profit than ever - like other companies have done.

    But in Time's specific example it's not just the ability to get the content online - but the content itself. Most of it was really more or less subjective opinions on the news. Overall; anyway. Now you get that on any blog; including here and are able to have your say as well. A feature Time never had in the past. If they do now; I wouldn't know, because I've long since found other sites I prefer to read.

    But perhaps; the problem is resistance to change - moreso than anything. In Time's case, It wouldn't personally matter to me. They can lock down the whole site and I won't pay for it; but I was never interested in paying for the magazine either.

    I think it comes down to this: some of these media companies are going to go down - period. There's too much information out there now. Too much to absorb. Even if they find a customer base, I doubt it would be very big.

    I don't think the Model HAS to be the Model(s) Mike suggests... I agree there. But it's funny a company with all those college degrees sitting in offices that they demanded before hiring them can't come up with any ideas....

    The funny thing to sum it up is that now; when I see a link to an article on one of these sites you have to pay for or sign up for, I skip it and find another - because I'm just looking for news in a hassle free manner. If not on the web, then Radio's fine. And you know what - I don't pay for that either.

    link to this | view in thread ]

  19. identicon
    Anonymous Coward, 1 Jun 2009 @ 7:52am

    The Arkansas Democrat-Gazette is a rarity among big U.S. newspapers -- it is selling more weekday copies than 10 years ago. In Idaho, the Post Register's circulation has remained stable, while many other print publications have lost readers to the Internet. How can this be?

    The executives behind the Arkansas and Idaho newspapers say they believe that it's because they have been giving free access to their Web sites only to people who subscribe to the printed edition. Everyone else has to pay to read the Democrat-Gazette and the Post Register online. Meanwhile, most publishers have been giving away their stories and photos to all comers on the Internet.

    "To me, an online subscription is just the common-sense thing to do," says Roger Plothow, the editor and publisher of the Post Register in Idaho Falls, Idaho. "To just give it all away on a Web site is completely and blindly idiotic."

    The blunt logic is starting to resonate with many newspaper publishers, who are preparing to build toll booths on parts, if not all, of their Web sites. They hope that the switch will bring in more online revenue and give print subscribers another reason to keep buying the newspaper.

    link to this | view in thread ]

  20. icon
    BobinBaltimore (profile), 1 Jun 2009 @ 8:02am

    Re: Re: Bingo

    Again, you're mixing industries. Google, Facebook, and for the most part, Yahoo, are not content creators, but aggregators. Totally different world and business view. Yes, some aspects (advertising, licensing issues) may carry across these and the publishing space, but they, for the most part, are not saddled with the costs and complexities of creating content. Big difference, and I'm guessing @AnotherAC's comment was really focused on the media/publishing arena.

    link to this | view in thread ]

  21. identicon
    Another AC, 1 Jun 2009 @ 8:04am

    Re: Re: Bingo

    "Why is it that people keep thinking that giving content away for free means no business model?"

    I don't. Insert "viable" between "no" and "business", however, and I might agree that is my position in many instances. Giving away goods free of charge as a vehicle for upselling to something else isn't the only viable business model possible on the internet, not by a long shot. In fact it's just one of many possible, and choosing another model that does not involve "free of charge" does not automatically equate with "suicide". Maybe that's what is tiresome about the cries of "suicide" everytime someone considers charging for something on the web. Giving away the goods free of charge with no other viable means of generating revenue, on the other hand, DOES constitute business suicide. The energy spent on "free of charge" at some point could have been spent exclusively on the "not free of charge" material that actually delivers the life-sustaining income.

    Another barrier to this business model you love so much is the natural suspicion people have over such shemes. Anyone who has been tricked into visiting a time-share facility in order to recieve their "free gift" understands how painful the bait-and-switch scenario can be, so they learn to avoid it. Unless "free of charge with no pressure and no strings attached" is available, but then it is really easy to never upgrade to the "pay for more value" plan. Which translates again to "no *viable* business model". Unless the "free" part is so inexpensive and easy that it doesn't drain appreciable resources. The free food samples at the local supermarket come to mind.

    I honestly think that in some situations, maybe most of them, it's ultimately more efficient and honest to just charge a fee and be done with it. If it's not possible to find enough paying customers via a direct approach, I really don't see how expending even more energy and resources to do the same indirectly will work any better.

    link to this | view in thread ]

  22. icon
    BobinBaltimore (profile), 1 Jun 2009 @ 8:07am

    Re: Re: Re: Bingo

    Mike...is WSJ a "special case" or is it actually a much more typical case. While we tend to think of Big Newspapers and Generalist Magazines, the fact is that there are a lot more specialty or affinity publications in the world, than general ones. Yes, general circ of big papers/mags is larger, but perhaps not as valuable from a business perspective in this new era. Pubs which cater to a specific, motivated, interested group of readers will absolutely fair better in a paid content environment than most generalist pubs. Whether they do well enough to survive and thrive is situation-dependent. And I do believe that some of the "elite" generalist pubs *can* do fine with a paywall so long as they maintain high quality, cater to their readers and offer differentiating voices (largely commentary and investigative journalism) not easily or readily available elsewhere.

    link to this | view in thread ]

  23. icon
    JonMontgo (profile), 1 Jun 2009 @ 8:14am

    Re: Re: Bingo

    Since when is Th WSJ mostly unbiased?

    link to this | view in thread ]

  24. identicon
    Anonymous Coward, 1 Jun 2009 @ 8:18am

    Two other things to consider. While over the air TV is free, most people pay for cable, and many of them pay extra for "cable only" channels such as HBO. These are a clear indication to me that the public is willing to pay a premium for what they consider to be premium content.

    No, not all of them pay for the premium content, but more than enough people find it a valid expense that they are willing to pay for it. After all, they have the choice of all the free over the air stuff out there. It's amazing to see that a "paywall" works very well here.

    The other thing is the concept of content. Google is an aggregator, especially these days in the news arena. What would happen to google if suddenly ever news source put in a noindex on everything except their enter page? WHere would google get it's news? Oh, wait... all the eyeballs in the world and nothing to show them, now THAT has value, right?

    Sorry Mike, but this is one of those cases where your all free mantra just doesn't work out, not even close.

    link to this | view in thread ]

  25. identicon
    SombodySomewhere, 1 Jun 2009 @ 8:27am

    Good Business Model

    I keep reading this "new", "good" business model few times per pretty much every article. I would love everything to be free.... you know like gas for free would be wonderful and a train ticket for commute would be nice also, would love free nytimes subscription, but WHAT IS THIS MAGICAL GREAT BUSINESS MODEL???? could you please share? i can go to a store and take their merch and just tell them that their business model sucks because i dont feel like paying for it.

    link to this | view in thread ]

  26. identicon
    Another AC, 1 Jun 2009 @ 8:27am

    Re: Re: Re: Bingo

    "Big difference, and I'm guessing @AnotherAC's comment was really focused on the media/publishing arena."

    Yup. The devil is in the details, and I guess people are afraid of them as a result, hence the reluctance to take them into consideration when thinking (or what passes for thinking).

    Here's a hint for those of you that don't quite get it: it can't all be about advertising. At some point, somehow, something has to be paid for. In some cases, like media/publishing, the valuable goods and the advertising cannot be the same thing, but that's what it seems is being advocated.

    As an aside, here is food for thought: Just because something is free now (eg. Gmail, etc.) does not mean it will be free in perpetuity. I suspect a painful day of reckoning will come at some point in time for many "free" services on the web. Either in the form of "please pay us now or leave", or "sorry, we can't keep this up any longer, so we're shutting down. Please find an alternative provider by the end of the month, at which point the servers will be turned off." The same goes for free tv online like Hulu. It *won't* be free forever, so while canceling your cable subscription now may seem like a good idea, your free TV experiment can come to an abrubt end at any time depending on the whim of the provider.

    TAANSTAFL.

    link to this | view in thread ]

  27. identicon
    mobiGeek, 1 Jun 2009 @ 8:58am

    Re: Honourable Thing To Do

    what company would want to live in a world where content is available for free

    A company that recognizes the strengths of leveraging their audience's appetite for zero-cost content by selling the scarcities around that content.

    Notice that I used the word "audience", not "customer". In the traditional print media world, the "customer" is the advertiser, and to a lesser degree the "subscriber".

    Let me throw a question out to you: what reader would want to pay for a copy of information that essentially cost nothing to make? What reader wants to pay for information that can be gotten elsewhere for free by another organization that recognizes the benefit of leveraging the audience's appetite (and attention).

    link to this | view in thread ]

  28. identicon
    mobiGeek, 1 Jun 2009 @ 9:19am

    Re: Re: Re: Bingo

    Google's information is worthless without users.

    Name one business that is relevant without users.

    their business model is ad supported
    Yes, that is the majority of their revenue model. Why is this okay for Google, but not for others? On top of that, Google is now making money from other resources (premium apps, small business hosting, etc.) specifically because they have built a reputation by giving away FREE STUFF.

    Google creates zero content. Their cost to acquire new content is down to only the mechanical costs.

    First, Google is not just a search engine. The produce LOTS of software and give much of it away for free: Maps, Earth, Picasa, Blogger, Gmail, etc.

    Second, if Google truly did sit back and grow with only "mechanical costs", then they'd be overcome in short order by other savvy businesses. Google remains at the top of the hill SPECIFICALLY because they don't just have "mechanical costs". They build and innovate continuously, both on the free-content side for their users/audience and on the revenue-generating business apps side (e.g. AdSense).

    Time therefor would have to generate signficantly more revenue per page to break even.

    You MASSIVELY underestimate the work that Google does, or any of the other FREE sites that are out there.

    Time is more than welcome to take their journalists and lock them behind a pay wall. Newer, smarter sites will figure ways to generate revenues to pay for their own journalists and editors (and sales folks, and IT people, and infrastructure) and simply leverage the appetite of Time's soon-to-be-former readers.

    Google would index their content, and provide it in context on their Google news page
    Except, Google doesn't show entire articles from random sites. If Time doesn't want the exposure, they can EASILY opt out of Google News, while still remaining in the main index.

    If they want out of the main index, that too is EASILY done.

    except exposure, which combined with a few dollars can buy a coffee at Starbucks

    See, you are showing that you simply don't understand how Time's CURRENT print business model works. Time makes money specifically because of that exposure. Moving behind a paywall is taking their online business away from their print direction...while their readership is moving online.

    link to this | view in thread ]

  29. identicon
    mobiGeek, 1 Jun 2009 @ 9:22am

    Re: Re: Re: Bingo

    Another barrier to this business model you love so much is the natural suspicion people have over such shemes. Anyone who has been tricked into visiting a time-share facility in order to recieve their "free gift" understands how painful the bait-and-switch scenario can be, so they learn to avoid it.

    And yet, people still consume print and televised media, at no cost other than covering the distribution cost...

    link to this | view in thread ]

  30. identicon
    mobiGeek, 1 Jun 2009 @ 9:25am

    Re: Re: Re: Re: Bingo

    Just because something is free now (eg. Gmail, etc.) does not mean it will be free in perpetuity

    If the organization is making money (and profit), then why would they shut it down?

    If they start to lose money, then their business model is failing. They need to adjust, and if your "now pay us" is how they adjust, then they'll simply lose out to competitors who figure out a better business model.

    link to this | view in thread ]

  31. icon
    Sneeje (profile), 1 Jun 2009 @ 9:28am

    Re: Good Business Model

    Don't know if I should bother here, but the point is to charge for the "scarcity" - something not readily available or in infinite supply. Your examples of gas and train tickets do not apply because they are scarce goods with limited supply. Information is generally in infinite supply and it is fungible across many formats and channels.

    The point isn't free or not free, it's building a business model around the things you do better than anyone else, not just access to information (which is easily duplicated and provided by others). And, BTW, focusing on the things you do better than anyone else has been the standard approach to business models for all time.

    So, for example, what if your news stories were free, but the ability to comment was not--and the paper gave editorial page access to those who were most active on the website and whose comments were viewed and responded to most often? Now I have a reason to pay, I get to be part of a community that influences the paper's content--something scarce, and something news stories aren't anymore.

    link to this | view in thread ]

  32. identicon
    mobiGeek, 1 Jun 2009 @ 9:28am

    Re: Sounds reasonable until

    Remind me again how a monopoly prices itself out of the market?
    By setting the price higher than the market will bear. And the market is quickly learning that information costs zero to reproduce, while the value of their attention to the publisher is substantial. So the price the market is willing to bear is already low...and still dropping.

    link to this | view in thread ]

  33. identicon
    Anonymous Coward, 1 Jun 2009 @ 9:34am

    Re: Re: Honourable Thing To Do

    Except for two simple problems:

    1) Time's content is unique and therefore has some value. Putting it on a subscription basis also makes it scarce. Is this not the whole idea?

    2) If Time made all their content free, what is the scarce commodity they are going to sell to pay for it? Miniputt games with the reporters? Perhaps the editor in chief can take people to Tijuana for a night they will never forget.

    For me, this shows how inflexible and incorrect the "free" model is for almost all business that actually create something. The creation and selling of that something should be enough, they shouldn't be forced to jump through a second or third flaming hoop just to entertain the masses (that will never pay them a cent)

    link to this | view in thread ]

  34. identicon
    mobiGeek, 1 Jun 2009 @ 9:35am

    Re: Cost v. Value

    the paying for content thing has been going on for hundreds of years until the whole internet thing sprang up on them

    No...the paying of distribution of content has been going on for a long time. But the price of that paper you buy covers the cost of getting the physical paper to you. The content has already been covered (including profit) by the advertisers. The readership is not the customer base, the ADVERTISERS are.

    link to this | view in thread ]

  35. icon
    Sneeje (profile), 1 Jun 2009 @ 9:39am

    Re:

    Nobody is arguing that people won't pay for premium content, just that they won't pay for what they can get nearly anywhere else--information. I do not consider TIME to be "premium" content. If TIME goes away, I'll RSS something else. And right now, I would struggle to pick any single example of premium news content.

    To Mike's other point, becoming a vendor of premium content means that you have to accept two things: you will likely have a limited potential market that will only grow nominally (if at all), and you will need to continue to focus heavily on your brand and differentiated capability (what makes you "premium").

    And your examples are not too good. People began paying for Cable and cable-only channels such as HBO because they provided them something they could not get over the regular airways or anywhere else (read: scarce). That is not true today (HBO subscriptions are in decline, I believe). I can see movies easily well before I could get access to them on HBO, which is why they have become purveyors of shows (Sopranos) that you can't get or see anywhere else.

    Free in this context is about delivering things for free as an enticement to bring them to your door for other offerings. What would I pay for in TIME that I can't get anywhere else?

    link to this | view in thread ]

  36. icon
    minijedimaster (profile), 1 Jun 2009 @ 9:42am

    Re: Re: Re: Bingo

    Since when is ANY news source unbiased one way or another. That's a big part of the issue here. When you consider that about 85% of the news papers and TV news outlets are Left Wing propaganda machines, it's hard for publications like Time to compete in that saturated market. Why do you think conservative talk radio does so well and liberal talk radio doesn't? Pay or no pay, when there are so many places to go to get the same exact talking points from the DNC, going from free content to pay wall != viable business model. It's called looking at the big picture.

    link to this | view in thread ]

  37. identicon
    cram, 1 Jun 2009 @ 9:47am

    Re: Re: Re: Honourable Thing To Do

    "Miniputt games with the reporters? Perhaps the editor in chief can take people to Tijuana for a night they will never forget."

    Muahahahaha.

    So, the day's not far when Time will stop being a content company and become a traveling circus.

    Seriously, I am having a hard time trying to figure out what scarcity a newspaper can have to sell consistently and sustainably to stay in business as they have been. Of course, Mike has the answers. Let's just wait and see how the whole thing pans out.

    link to this | view in thread ]

  38. icon
    BobinBaltimore (profile), 1 Jun 2009 @ 9:52am

    Re: Re: Good Business Model

    Interesting and definitely has merit, though all the UGC beatniks will crow about having to "pay to be engaged" being counter to the free-wheeling culture of the web, maaaaaaaan. I can see it in Wired now, right next to another glowing review of whatever Apple is overcharging for.

    On a more important front, I think there is too easy a tendency to equate "information" and "content." I agree that information is pretty much ubiquitously available. But content - which might be described as information placed in context, married with an editorial point of view, often coupled with images or video, usually fact-checked and placed in the visual proximity to other relevant data - is not. For example, I agree that the raw information related to the scandalous handling of General Motors' decline is available from a multitude of sources. But I don't have the time to piece all that together, draw some conclusions, package and check it. Those businesses (not bloggers and pressure groups) that do have time are not infinite in number...perhaps a few hundred that actually produce original content based upon available "information." Of those few hundred, only a subset publish reliably in English (my primary language). Of those, only a few dozen have an editorial approach that I can - worst - stomach or - best - enjoy. And of those, there are maybe three or four that I trust and wish to support with my eyes and dollars.

    In sum, information may not be scarce, but content (whether fiction, non-fiction, journalistic, editorial, graphical, etc) is DEFINITELY scarce, especially when personal criteria are included: my interests, language, politics, locality, etc.

    Again, I say, these are not academic discussions to be viewed in a vacuum, but real-life business questions which involve people with real habits, preferences and inclinations. All of this has to be taken into account. The devil IS definitely in the details.

    link to this | view in thread ]

  39. identicon
    Michael, 1 Jun 2009 @ 9:56am

    Re: Over The Air

    Ask your cable company for a subscription to only HBO or ESPN. First you need the basic package, which is primarily the over the air channels. In Canada our cable companies enjoy service area monopolies as well. If it was possible to only get specialty channels over cable, the rabbit ears would be up awfully quick ... BTW, a broadcast engineer explained an HD picture is better over the air ... something about geting the full bandwidth.

    link to this | view in thread ]

  40. identicon
    Free Capitalist, 1 Jun 2009 @ 10:10am

    Exactly *how should Time use Google's business model?

    I'm a little uncertain how Time or any other media company could make money using Google's business model. Google, Yahoo and MSN make money using a model created specifically for search engines (by GoTo.com).

    Google's profit business model is pretty ingenious in that many 'users'(and apparently some posters on this thread) aren't aware that the company makes profit when people click on any of a number of their top results for most given searches. The visible ad 'banners' are fluff that make *some money, but the real money is in the paid search results.

    The average user might have no idea that Google's results are ordered by the highest bidder on a given search term. Their search ad clients, as with Yahoo's and MSN's, use a sophisticated term auction system, and bid on a price *per click* to be ordered at the top of the results for that term.

    Some search terms garner outrageous 'per-click' rates... when I was working at one of Google's competitors, the term 'mesothelioma' was getting $50 PER CLICK. (It shouldn't take long to deduce what types of companies bid $50 or more per click to be ordered first on results for that word)

    Pay-per-click. With all the searching and follow up clicking that happens every day, that is a SOLID business model.

    But how does a magazine, or a 'newspaper' get in on this action?

    Maybe they should start writing editorialized stories from multiple points of view, and let interested (implicated) parties bid on which version gets priority when people search for the subject.

    link to this | view in thread ]

  41. identicon
    Michael, 1 Jun 2009 @ 10:26am

    Free to subscribers only

    Making content freely available to print subscribers only makes a ton of sense ... the website then becomes an extension to enhance the subscription experience. Most publishers thought they could enjoy the best of all worlds ... they just can't sell enough ads to monetize their digital assets and cover the ad revenue decline caused by lower subscription numbers. I subscribe to 2 daily papers, I just wish they would get the print to internet connection possibilities by utilizing the power of print in new ways. They could create new hybrid (print and online) features that address advertiser and reader needs. Publishers don't seem to realize combined print and online capabilities could form a media product that is superior to Internet-only offerings.

    link to this | view in thread ]

  42. icon
    nasch (profile), 1 Jun 2009 @ 11:12am

    Re: Re: Re: Honourable Thing To Do

    The creation and selling of that something should be enough, they shouldn't be forced to jump through a second or third flaming hoop just to entertain the masses (that will never pay them a cent)

    That is for the market to decide, not the publishers. They can sit behind their paywall crying about how they "should" be making money all they want. If the market is moving in a different direction, they'll go out of business. On the other hand, if the market rewards them for their subscription model, great.

    link to this | view in thread ]

  43. icon
    Mike Masnick (profile), 1 Jun 2009 @ 11:17am

    Re: Just more...

    ...of the TechDirt ubiquitous "non-free is bad/stupid/dumb/inane...now it's 'suicide.'" Look, if a content producer has something of sufficient value and interest to its consumer population (maybe not you, but some consumers somewhere) then it might just work fine.

    Have never said that if it's non-free it's suicide. Please. I think the point is that you DO need to charge -- but the question is what are you charging for. The point (apparently not clear enough) is that charging for content that isn't limited and is in a competitive market won't work. That's just simple economics.

    But the bottom line is that the days of giving away at no charge professionally produced content and journalism are numbered. And I, for one, do believe that there is enough demand among the readerships of a good number (certainly not all) of these publications to make them viable.

    You do realize that most media subscriptions today barely (if at all) cover printing and delivery? Subscribers DO NOT pay for content today. Why do you think they'll suddenly start doing so in a much more competitive market?

    Having a good business model is not limited to a business model that TechDirt/Masnick agrees with, though the verbiage on this site increasingly seems to make that equation.

    Not at all. We're impressed by new business models all the time. It's not about the business model. It's about the economics. If you pick a business model that goes against basic economics, you're going to fail. It's really that simple.

    They don't have the arm-chair luxury that TechDirt does of pontificating without risk and playing a wait-and-see game

    You say that as if we're not running our own publication -- and giving away all the content for free.

    link to this | view in thread ]

  44. icon
    Mike Masnick (profile), 1 Jun 2009 @ 11:19am

    Re: Re: Re: Re: Bingo

    Mike...is WSJ a "special case" or is it actually a much more typical case.

    Considering plenty of other publications have tried to charge and failed miserably... I'd say it's pretty damn clear that the WSJ is a special case... and I still say it wont't last. Eventually the WSJ will get more and more free.

    link to this | view in thread ]

  45. icon
    nasch (profile), 1 Jun 2009 @ 11:23am

    Re: Re: Re: Re: Bingo

    Here's a hint for those of you that don't quite get it: it can't all be about advertising. At some point, somehow, something has to be paid for. In some cases, like media/publishing, the valuable goods and the advertising cannot be the same thing, but that's what it seems is being advocated.

    I definitely don't get it. Newspaper and magazine revenue has for many decades, if not since they were invented, been all about advertising, or nearly so. Why is that suddenly not the case anymore? Because online advertising is different? Because it's harder? Boo-hoo. I don't understand why it's ok to expect the advertisers to pay for the print version of a publication, but not for the online version. Or are you saying Time shouldn't rely on advertising revenue for its print version either?

    link to this | view in thread ]

  46. icon
    Mike Masnick (profile), 1 Jun 2009 @ 11:26am

    Re:

    The Arkansas Democrat-Gazette is a rarity among big U.S. newspapers -- it is selling more weekday copies than 10 years ago.

    Mark Potts recently dug into the details, and it doesn't look nearly as good as you suggest:

    http://www.techdirt.com/articles/20090520/0236314946.shtml

    Basically, they've severely limited their growth, and are now facing similar problems as anyone else. Basically, they got away with adding artificial scarcity, rather than growing a market.

    The blunt logic is starting to resonate with many newspaper publishers, who are preparing to build toll booths on parts, if not all, of their Web sites. They hope that the switch will bring in more online revenue and give print subscribers another reason to keep buying the newspaper.

    And doing so will almost certainly fail. Because it would be about shrinking a market and trying to pretend that alternatives don't exist. Arkansas gets away with it (for a little while, at least) because it has an older population. But the paper isn't growing, it's shrinking.

    link to this | view in thread ]

  47. identicon
    Anonymous Coward, 1 Jun 2009 @ 11:53am

    Re: Re: Re: Re: Re: Bingo

    Umm, how many failed search engines are there out there? How many failed e-commerce stores, platforms, concepts? How many chat systems, business models, and the like have all failed online in the last 10 years?

    If anything, the WSJ is a clear indication there there is a market there, and done right, people will pay to get what they really want. Free is great for attracting a transient audience that won't miss your stuff tomorrow. Creating content that matters, that attracts, and makes people want to come back is something that is worth paying for.

    If anything, with the way ad revenues are going, the ad supported sites are more likely to fail these days than the subscription sites.

    heck, maybe this is where the previous trend line hits bottom and starts heading the other way. Every considered that?

    link to this | view in thread ]

  48. identicon
    Another AC, 1 Jun 2009 @ 11:55am

    Re: Re: Re: Re: Re: Bingo

    The difference is that prior to the internet they were geographically localized. You young folks may not recall the times when you could not just log on and access information from all over the world. I do. Back before the internet, I remember the profound thrill of accessing an ftp server all the way over in Japan (that I found via Archie). It may seem commonplace now, but I assure you, when you do it for the first time ever, it's a big f'ing thrill.

    The problem is not that newspaper or magazine business models are radically different, it's simply that people are no longer limited to their local geography to get certain kinds of information. The internet doesn't actually eliminate that advantage, they just need to figure it out. World-wide access aside, stuff that's happening within a 30 minute automobile ride from my house is still much more relevant than what is happening on the other side of the globe. The fact that I get my information via my browser rather than the bundle of paper on my porch is irrelevant. Local information is still of profound interest relative to "being an informed citizen on world affairs". That is the niche newspapers need to take advantage of online.

    I can foresee the day when the decision of where to buy a house is not just influenced by the quality of the local school district, but on how internet savvy the local populace is. Here in Southeastern Connecticut, it's mind boggling how many businessess and restaurants do not have an online presence. Typical conversation in the household: "hey, this place I heard about seems cool. We should to there this weekend." "Cool - what are their hours and what is their menu like?" "No clue - they don't have a website". "Oh. Well, fuck them - we'll go to that other place in the next state we read about online. They sound really cool and they have an awesome kids menu too".

    You don't have to be free in the new millenium, but you do have to be online.

    link to this | view in thread ]

  49. identicon
    Another AC, 1 Jun 2009 @ 12:08pm

    Re: Re: Re: Re: Re: Bingo

    Who says they are all making money (and profit)?

    I don't see a long term business model for many of the current popular online services. They are just milking their current popularity for venture capital, advertising or whatever. Doesn't mean they have a viable long-term business model. Talk to me in 10 years about Facebook - maybe I'll remember the name. When I say "Napster" in front of my daughter she just gives me a blank look. Fads are not a business model, even if they bring in money for a time.

    link to this | view in thread ]

  50. identicon
    Another AC, 1 Jun 2009 @ 12:28pm

    Re: Re: Just more...

    "You say that as if we're not running our own publication -- and giving away all the content for free."

    What content? The articles are mildly interesting, though increasingly monotonic. What keeps me coming back here is the interesting mix of thoughts and opinions in the commentary. You aren't giving that away for free - WE are. You probably have a good idea of how easy it is to remove Techdirt from my list of popular bookmarks and never browse this site again. What exactly is there of value that is offered for free here that isn't ephemeral and easy to replace/live without?

    How exactly do you distinguish between those that say "ok, bored now. Buh bye" and those that say "Please cancel my subscription". Oh yeah - you don't. Because nobody has to cancel the subscription - they just don't browse here any longer.

    link to this | view in thread ]

  51. icon
    Sneeje (profile), 1 Jun 2009 @ 1:10pm

    Re: Re: Cost v. Value

    *Great* point!

    link to this | view in thread ]

  52. icon
    Sneeje (profile), 1 Jun 2009 @ 1:31pm

    Re: Re: Re: Good Business Model

    >>On a more important front, I think there is too easy a tendency to equate "information" and "content."

    Perhaps, but that content better be a unique value-proposition. And I don't share your view that the items you listed (context, editorial view, images, usually fact-checked--ha!) for content are scarce--those are pretty much the definition of nearly every newspaper, blog, TV news website, etc. I also don't share your view that it is desirable to get all of this from a limited number of sources, because "an editorial point of view" automatically makes me suspicious. I want many points-of-view to construct my views.

    If you wish the information to be packaged for you then perhaps a paywall would make sense for you, but then you would be limited to only those paywalls you could afford and have fun keeping track of all of those subscriptions.

    Setting business issues aside, I think that collectively we would all be worse off in terms of information/content/whatever sharing, because the more paywalls the greater barriers to that sharing.

    link to this | view in thread ]

  53. icon
    minijedimaster (profile), 1 Jun 2009 @ 1:51pm

    Re:

    What would happen to google if suddenly ever news source put in a noindex on everything except their enter page? WHere would google get it's news? Oh, wait... all the eyeballs in the world and nothing to show them, now THAT has value, right?

    First off, if you took Google News away I doubt it would have much impact on Google. They have MANY other products and reasons for people to use their products and services, news is only a small part.

    Second, you have it backwards. The question would be, what would happen to all of the news "creators" once all of that unique traffic starts to dry up from google, the most popular search engine in the world, as people stop using it because it would be useless if they pointed to their main page only? Their traffic would drop dramatically enough that it would put quite a few out to pasture. If anything these news "creators" should be paying Google for the service they provide them for free. Thank you, come again.

    link to this | view in thread ]

  54. icon
    minijedimaster (profile), 1 Jun 2009 @ 2:08pm

    Re: Exactly *how should Time use Google's business model?

    ...many 'users'(and apparently some posters on this thread) aren't aware that the company makes profit when people click on any of a number of their top results for most given searches.

    Really? Aside from you (Free Capitalist) saying that this is how it works, where is the proof that this is the case? Cause silly me, I thought Google search rankings were ordered based on amount of other sites linking to that one. A simple breakdown of how it works I'm sure. (sarcasm) But here I was blindly thinking it worked one way, alas, all I had to do was read some anonymous comment here on Techdirt to find out how wrong I was. (/sarcasm)

    link to this | view in thread ]

  55. identicon
    Anonymous Coward, 1 Jun 2009 @ 2:41pm

    Re: Re:

    "he question would be, what would happen to all of the news "creators" once all of that unique traffic starts to dry up from google, the most popular search engine in the world, as people stop using it because it would be useless if they pointed to their main page only?"

    Well no, you are assuming that the people will have another choice. But if the only "news" choices are Perez Hilton and Techdirt, people will have to find the news in other ways. Google is only as valuable to people as the content it indexes - drop stuff off the index, and Google loses value.

    News? If i want to find a story, I often search google news first rather than specific websites. It is practical, but the reality is I am not a buyer for anything on these websites, which are often aimed at a specific marketplace (like local newspapers or local TV news stations). I am a worthless surfer, I don't make them money, I cost them money. Losing me is like losing your appendix. Big deal.

    link to this | view in thread ]

  56. identicon
    Anonymous Coward, 1 Jun 2009 @ 4:50pm

    Losing me is like losing your appendix. Big deal.

    I lost my appendix, it burst. It was a pretty big deal.

    link to this | view in thread ]

  57. identicon
    Anonymous Coward, 1 Jun 2009 @ 7:19pm

    Re:

    have it burst is a big deal. Living without it isn't.

    link to this | view in thread ]

  58. icon
    BobinBaltimore (profile), 2 Jun 2009 @ 5:53am

    Re: Re: Just more...

    "The point (apparently not clear enough) is that charging for content that isn't limited and is in a competitive market won't work. That's just simple economics."

    So, again, we come to a definition of what is "limited" versus what isn't. Please see my comments yesterday on the difference between information and content. Not perfect, to be sure, but it hits the general fallacy of stating that news "information" (really content) is ubiquitous. Firstly, it isn't really, once very real personal preference comes into play. Second, it only has the appearance of ubiquity because 99% of professional news organizations give away their content free right now. Since this free model is failing, that ubiquity will also cease to exist, whether as a result of putting up paywalls or by those organizations dying.

    "Subscribers DO NOT pay for content today."

    Yes, I realize this as I am in the industry. But let's break that down. Firstly, you are arguing for free in an online arena, yet your comment refers most directly to traditional print. That's a problem. The cost structure and revenue structure of print is very, very different than online. Second, the direct subscription fee paid by subscribers does not cover costs, you are correct. But it is the VALUE of those subscriber eyes that advertisers want. This is (one of) the big problem with online advertising: typically, it delivers only generic, fleeting eyes, often with little demographic consistency to justify higher advertising fees. This is a major part of the reason that online ads go for pennies (or just a few dollars) per CPM. On the rpint side, when someone buys a single page in Cosmo or Vogue (often in the high five figures per page for a single issue, depending on placement), they get subscriber populations which have a mountain of demographic data behind them, and which historically offer their ads more than a fleeting glance. Plus, print has no analogy to an Ad Blocker...even if only for a second or two, that ad WILL be presented while the reader peruses the title. The very fact that a person has made a financial committment to a publication through buying a subscription signals to advertisers that they are open to relevant product or service information. So yes, while the direct subscriber fee doesn't cover costs, the reality is that the lifetime value of that subscriber can be extremely high because of the advertising they draw in. And for copies at the news stand, it's just as good: they typically pay FULL the issue price, they usually fall into the same demo as the subscriber readership (maintaining the value of the eyes) and there is still no ad blocker. So, I'd be careful trying to cast an online argument in print terms. Or vice versa.

    On the business model front, I think my main issue with TechDirt's approach (aside from the HARPING that all free is good, all pay is suspect or bad/evil/stupid) is that their preferred models usually aren't based in today's reality...they require some gap to be filled in the future, or the presuppose that tech-savvy consumers represent the general market (they usually do not).

    "You say that as if we're not running our own publication -- and giving away all the content for free."

    Well, okay, but as is typically the case, you are ignoring the issue of breadth and scale. TechDirt is an affinity site (using print parlance) and a modest one at that (with apologies). The content you produce is largely derivative and you rely substantially on UGC for interest and traffic. I'm betting that the monthly legal bills for a major newspaper just to protect themselves from libel suits would pay for a substantial piece of your annual operations. And, as I'm sure you well know, business models must be able to SCALE and often don't.

    I'm not trying to denigrate or belittle your business, its criticality to those whose livelihoods are attached to it, or the value it may bring. But when you enter the world of pontification about business models, you can't selectively ignore the differences between industries or cost structures or scale.

    link to this | view in thread ]

  59. identicon
    Anonymous Coward, 2 Jun 2009 @ 7:26am

    Wait! That's an organized mass suicide attempt!

    link to this | view in thread ]

  60. identicon
    Dave, 2 Jun 2009 @ 8:06am

    Magazines, Subscriptions and Internet

    Professional journalists are far from perfect, but the best make a real effort to find and tell the truth. While they don't necessarily have regulations for their conduct (doctors, lawyers, accountants, professional engineers etc. all have legally imposed standards, journalists don't), they certainly have voluntary standards and ethics. So if I read an article in a mainstream publication like Time, the Tribune, the Times, etc. I have a fairly high confidence it's the truth. I do not have that confidence about what I read on the Internet, where anyone can say anything, true, false, meeting a hidden agenda or just a nutcase.
    I subscribe to a paper newspaper and get their electronic updates. Would I keep the subscription to keep the electronic updates? Probably.

    link to this | view in thread ]

  61. identicon
    Free Capitalist, 4 Jun 2009 @ 11:15am

    Re: Re: Exactly *how should Time use Google's business model?

    @minijedimaster

    Wiki's article on pay per click (Google's money making business model, taken from GoTo.com) is OK. The only thing insiders might clarify is that 'organic results' aren't all that organic... the industry took it upon themselves to 'break out' top sponsored results a few years ago in order to appear less 'deceptive' to saavy users. However, the 'organic results' still include paid results first.

    Google's old corporate mantra should have been:
    "The definition of 'evil' is subjective. Therefore, it's all good!"

    http://en.wikipedia.org/wiki/Pay_per_click

    link to this | view in thread ]


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