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The Internet, for Fun and Profit

Does Andrew Sullivan's new business model promise anything for the content creators he aggregates?
internet profit

As by now everybody knows, Andrew Sullivan has decided to leave The Daily Beast not for another established media outlet but to strike out on his own. The business will be modeled on The New York Times, with the blog accessible for free but with a meter on the number of articles that you choose to “read on.” Once you’ve exceeded a handful of free clicks through, you’ll be hit up for $20 to subscribe and get unlimited access.

In general, I think this is a good pricing model, and much more viable for premium media outlets than either a paywall (which cuts you off from readers) or relying on advertising (because web advertising simply doesn’t work very well for journalism, and so is never really going to pay). It’ll be interesting to see whether Andrew Sullivan’s blog is enough of a premium product to be profitable this way. I suspect so – and I certainly hope so.

But whether Sullivan succeeds or fails has limited implications for the future of journalism in the age of the internet. It’s important to recognize that Sullivan’s blog is primarily an aggregator. The overwhelming majority of the content comes from other sources: newspapers, magazines, other blogs, and, of course, his community of readers. Sullivan and his team of unterbloggen work extraordinarily hard at sifting through the endless stream of web-based journalism and commentary, and Sullivan himself has both a distinctive and interesting sensibility and an exceedingly good nose for “hot” news. But he and his team are primarily performing an editorial function, selecting and repackaging material that other people produce.

This is not a criticism. The editorial function is incredibly important. Aggregators are hugely valuable. Sullivan is performing a great service, worth paying for, to anybody who finds his sensibility at all congruent with their own (and by that I mean, somebody who is interested in things he is interested in, not somebody who necessarily agrees with him about those things). And that turns out to be a pretty big slice of the journalistic consumer pie.

But none of Sullivan’s revenue will downstream to the content-creators on whom he depends. And that remains the essential business-model problem of the written word in the age of the internet. Newspapers were vertically-integrated: the same organization produced the content, aggregated it, and delivered it. But in the age of the internet, the delivery mechanism and editorial function have been disaggregated from content-production. You get access to the internet from a utility company like Verizon that does not own and is not responsible for providing content. And you find what you want using an advertising-supported search engine like Google that similarly does not own and is not responsible for producing content. Or through a reliable aggregator like Andrew Sullivan, who also does not own or pay for most of the content he steers people towards. These business models depend on content-generation for their own viability, but they aren’t primarily responsible for content-generation.

It’s easy to see how things could be structured differently. Aggregators could downstream a fraction of their advertising or subscription revenue to producers of content that was clicked through to. But it’s not obvious what would motivate these entities to adopt such a model, there being no actual shortage of content. And there will never be a shortage of content, because there is a large enough group of people who will do this for fun, whether or not it is profitable.

Of course, on some level it was ever thus, and the main difference is that the internet has driven distribution costs so low that it is actually possible to break into the winner’s circle without waiting your turn and playing office politics and so forth. But the percentages have nonetheless gotten worse.

Sullivan says his ambitions are to be more than just a blog; as he says, “commissioning and editing original long-form journalism is a core ambition of ours, along with a possible monthly tablet magazine.” But these are much more expensive endeavors than putting out a blog, and it’s not clear how much bigger his subscriber base would be if he provided these more substantial products. The good thing about the model he’s adopting is that he’ll know what his revenue stream is starting out, and therefore how much money he has to play with. That’s a much better place to be than starting out with a huge cost base and trying to figure out how to find the revenue to sustain it, which is where existing media organizations are. But it’s still important to recognize the degree to which successful brands like Sullivan’s depend not only on their own talent and hard work but on legions of people who are either doing what they do for the fun of it, or working for organizations that themselves haven’t figured out how to generate revenue sufficient to sustain their operations for the long term. So even if Sullivan succeeds – and I very much hope he does – his operation is unlikely to scale.

Then again, I’ve been wrong about everything internet-related so far. So don’t listen to me.



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