New year, new business models in publishing

thedish_custom-7fd6a232c1a3d3627adbab8adbd977eab4610665-s6-c10Four days into 2013 and the publishing industry has already seen a blossoming of paid content models.

First, Andrew Sullivan, the popular blogger who has most recently been affiliated with The Daily Beast, announced on Wednesday that he was amicably severing ties with his corporate parent and will be embarking on his own. This separation itself is not the biggest news – there are frequent whispers that star bloggers, such as Nate Silver at the New York Times, now have enough clout to declare their independence. Instead, Sullivan made waves by declaring that his new site won’t take advertising dollars and will operate on a membership model.

As Sullivan put it:

“The decision on advertising was the hardest, because obviously it provides a vital revenue stream for almost all media products. But we know from your emails how distracting and intrusive it can be; and how it often slows down the page painfully. And we’re increasingly struck how advertising is dominated online by huge entities, and how compromising and time-consuming it could be for so few of us to try and lure big corporations to support us. We’re also mindful how online ads have created incentives for pageviews over quality content.”

So Sullivan has unshackled himself from the demands of online advertising. In a less noble, more economic sense, he’s also unshackled himself from a business model that isn’t quite working. The publishing industry’s advertising revenue has fallen drastically the past few years. For many publishers, charging a premium for content is now a necessity.

Sullivan’s new site will also operate under a flexible paywall model, more akin to a membership program. The suggested price for a subscription is $20, but you can pay more if you wish. And non-members will still be able to access the site through social media links and an RSS feed. If you really don’t want to pay for the content, you don’t have to — think NPR. Perhaps subscribers who pay more than the $20 price tag will one day receive a tote bag in return.

At the end of the day, will Sullivan’s site be profitable? Reuter’s Felix Salmon crunches the numbers here and seems to think the answer is probably. That said, it’s doubtful that many bloggers have enough caché to secure a meaty salary off of their readers’ goodwill.

Coinciding with Sullivan’s revelation, The Atlantic announced they will soon start experimenting with online pay models. The site has been free since 2008, but Scott Havens, president of The Atlantic, told Forbes’ Jeff Bercovici that “The conditions on the ground have changed.  We’re shooting ourselves in the foot a little by having the paid app in the iTunes store while offering ourselves for free in Safari.”

Given that The Atlantic recently reported that its digital advertising revenue now surpasses its print advertising revenue—quite a feat in the publishing world—that the magazines still sees the need for a paywall only speaks to the dreary state of advertising.

The lesson here isn’t that paid content models are necessarily the future, but instead that a multitude of business models are needed for publishing to flourish. Some blogs may be able to forego advertising altogether; larger publishers may need to buttress declining advertising dollars with paid content models; some publishers may choose to operate solely with ad dollars. A new year has brought some more diversity to the business of publishing.