Rafat Ali has a very candid and revealing interview with Ann Moore, the CEO of Time, Inc. The whole interview is worth a read, but I want to draw specific attention to two portions. The first one deals with the different value of online and offline readers:
The average reader of Sports Illustrated delivers about $118 to the bottom line in Time Inc. The average very engaged user of SI.com can generate about $5 in advertising contribution. I need many more online viewers to equal one magazine reader. That is why you have to go for big volume and that is why you got to have partnerships.
Now I find this interesting, and I don’t doubt there’s some truth in it, but I question whether we’re comparing apples and oranges to some degree. One of the problems is how she defines “average reader” and “average very engaged user.” We don’t know whether for the print edition it includes subscribers or subscribers plus pass-alongs. And for the online what is a “very engaged user”? I assume it isn’t every unique visitor, but is it every repeat visitor? 3 visits per month? Is it a registered user or email subscriber?
Time and SI are big enough properties that I assume they have studied this every which way to Sunday, but it is important to carefully study your online audience and figure out if you could actually generate the same revenue on a smaller user base. If you find that certain users/readers are more lucrative, to the extent you can focus on them, you may be able to get around the need to generate eyeballs in massive quantities just to survive.
The second point she made that I think is worth noting is on the subject of professional journalism versus user generated content:
I think one of my priorities is to make sure we build enough fences around the journalistic part of our company, that we protect it and nurture it. Real fact-based news is very important for the country, for our company, for our democracy, for your business. You are not going to want the world to just run on user-generated content. We need to protect real journalism, and it is very much in our DNA.
A company like Time can’t survive on user generated content alone. And despite the real value I see in what users create, I still see enormous value in professional content. As much as we all may like to read blogs and watch YouTube videos, there’s still plenty of room for magazines, newspapers, TV, radio, movies, etc. It’s all a matter of balance, not an either-or choice like some would like to make it.