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Salon, Nearly No Money and Ultramercials
Adam9 writes "As Salon fights for survival, they have introduced a new advertising program that allows you to receive a free 12 hour pass by clicking through about 10 seconds of advertisements. Currently, the advertisements are from Mercedes-Benz. According to the article, they've lost about $79.7 million from their start in 1995. They also have about 45,000 subscribers right now." Jamie also pointed out this article from the WSJ, as well as the words from Salon themselves about it.
how many subscribers there are to slashdot?
slashdot: where everyone yells sarcastic metaphors to themselves to understand the issue
which is actually quite impressive, since most of the predictions that they would have died MONTHS (year ?) ago were wrong.
i hope they never go down, it's the only source of NON megamedia-owned journalism there is on the web right now!
If Salon has decided to take this route, why not allow micropayments? I don't have a subscription to Salon, because I don't read it very often. But I do sometimes find 'premium' stories I'd like to read...Just not enough to get a subscription. If I could pay 25 cents or whatever to read the story, I gladly would.
I realize there are problems with accepting micropayments via credit card, but certainly something like PayPal could be used.
- James
It's an interesting idea, a "temporary subscription" in return for viewing some advertising. It seems there's something for everyone. The advertiser gets a forum where people actually have to click through the ad; Salon gets some money from the advertiser; and non-subscribers get access to "premium" content. If this works (and Salon stays in business in part because of this), perhaps other content sites will follow suit.
-Brendan
It's too bad to see Salon go -- they have genuinely interesting features on occassion. That said, I don't see how they ever really planned on surviving once the dot-com meltdown occurred. Selling the ability to opt-out of annoying ads just didn't cut it, especially given their level of overhead (big-name writers and the like). If Suck couldn't keep its head above water, Salon was always doomed. Still, it'll suck to have the only real webzine be Slate.
Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
BTW, Salon.com ranks No 714 on Alexa.com, which means that they serve more than 2-3 million pages per day. That should make them around $50,000 per month from ads. More than enough to pay a small team of journalists.
Now they have a solid base of advertisers and 45,000 paying subscribers, which is really good for an online magazine. The WSJ article says they are looking at a strategy of reducing costs. Sounds like a plan to me. Is it really conceivable that they can't find a way to keep costs within expected revenues?
It's clearly inline with their advertisers wishes.
The advert i saw the other day from mercedes benz was clearly designed to be exactly that sort of click through. It had 4 pages of very flash oriented adverts for some new car.
I must admit it was quite effective, and if i had the money to buy a mercedes then the ad might have effected me.
If it were better targetted and perhaps extolled the benifits of red bull and coding sessions then i might have gone for it.
Which is exactly why CPC (cost per click) aint as popular as it used to be.
.. getting the customer to click thru isnt as important to the advertiser as youd like to think. (Although, granted, with aquisition campaigns, usually hybrid deals rear their ugly heads .. like CPM with a little Cost Per Action thrown in .. or sometimes its _just_ CPA.)
.. they force the impression out of you, which is actually _good_ for the advertiser.)
CPM (cost per thousand) is the defacto standard.
Furthurmore, most ads dont have anything to offer beyond the clickthru. Internet advertising is primarily a branding medium
Actually _seeing_ the ad for longer than 2 seconds is. (Salon isnt forcing you to click, they're forcing you to watch
I know these things because I write the ad delivery server for a company that has about 10% online penetration (one in ten americans online have 'hit' my ad server at some point.)
"Old man yells at systemd"
There are rumors that Terra-Lycos (TRLY) is talking with Salon management to buy Salon. Well, it is only a rumor, but feaseable when Terra-Lycos has more cash than any other portal/dot.com o whatever.
.dot crashes with potential?
Is it time to buy
I think there are many reasons Salon is failing: too much overhead, lack of a print version, content too stagnant for the medium(NET). But the real nail in the coffin is their far-left reporting/editorial. The Fray is great, but if you are going to post a bunch of baseless rhetoric to get readers fired up you had better have a convenient method for opposing views to reply. Otherwise you wind up with former readers like me, who don't like to be beaten-up with our arms tied behind our backs. Disagreeing with many of the articles drove me to read the site, but in the end it also drove me away. Slate is a similar site, but the forum is much more accessible and tied to the content and the authors/guest writers and columnists seem to actually read the forum posts.
"God fights on the side with the best artillery." - Napoleon, Marshal of France - speaking truth to power
I don't have a special insight into the on-line publcation industry, but it seems to me that there are a lot of Toms, Dicks, and Harrys blogging lately. Maybe these are ex-Salon writers, but blogs allow for an interaction between soapbox ranter and listener. Even with a 'Letter to the Editor' space, a publication is still one sided. "Here's my point of view - suck on it!". And, as we all know (as is the case with blogs and OS's), you just can't compete against something that's free...
From reading comments in here, I get the feeling that Salon's material is below par. It should come as no surprise that Salon is dead, but I'm amazed that they have lost as much money as they have. I wonder what they pay (paid) their writers?
I'd like to state that I worked for a company that had over 180,000 "subscribers" before it folded in 2001. We didn't charge for a subscription, but we did charge for content. Each piece of content you viewed was a small fee. Quite frankly, I was never convinced of this business worthiness of this approach. We burnt through about 30 million before going belly up. Looks like Salon will be doing the same thing.
I think online communities are going to have a hard time selling to individuals. While the metaphore works for real world newspapers and magazines, their publishing numbers are going down. Less people are reading them because they can get free content on the web. Now, I totally believe you should pay for content, but it should be subscription based and not be on a per site basis. In a sense, it should work like AOL (I know, I know). With AOL, you get prepackaged content. I'm suggesting you pay xx.xx dollars and get a pass to 20 or 30 web sites that all use the same password. You should be able to sign up for these sites through different subscribers, like you would your domain registration or cable access. The web sites still get the same amount of money, but if one 'net-network can provide a lower price but sell to more people, they can compete. They could also provide different site packages or offer more sites.
"Politicians find new names for institutions which under old names have become odious to the people."
Anyone remember those old warez sites, (and some H/P/A sites as well) where they tried to force you to click their sponsors, or links to top-sites in order to access them?
I guess all kinds of marketing comes around. But the real question is, are people too cheap to pay for salon premium really going to buy Mercedes-Benzs?
autopr0n is like, down and stuff.
600K a year would not come close to covering the cost of the high-profile and high-quality writers and editors they have on board. Then don't forget their production staff, sales staff, marketing staff, tech people, legal counsel, bandwidth costs, associated overhead, etc., etc.,
... as far as these things go. Considering that their losses are down to under $6 million/ year (per their last quarterly SEC filing), and that their income is up $0.5 million from a year ago while they've cut non-content-related (i.e. marketing and administrative) expenses by the same about, they could be viable in a few more years.
It would take less than 200,000 new subscribers at the $30 rate for them to break even, less than 7% of the 2.7 million unique visitors they cite for December 2000.
The main problem, of course, is time.
Salon has been around since the beginning of the internet boom & have a loyal reader base. Unfortuntely, most of their readers are used to getting their info for free & at this point it's going to be an uphill battle to convince folks to cough up for what they've been using all along. Will they be able to do so before they have to declare bankruptcy? Let's hope not.
The web sites still get the same amount of money, but if one 'net-network can provide a lower price but sell to more people, they can compete.
The content providers have no incentive to employ a middleman for selling subscription packages in this scenario. Not when there's more money to be made by setting the price and selling access themselves.
It would only increase technical complexity too.
It's a shame, because Salon is one of the best news sites ever in America. Salon's editorials and other pieces are just great pieces of journalism, from politics to sex. It's a bit like Wired was in it's best days. I can't think of any similar, independent site with attitude. I keep my fingers crossed for them.
Even random is random. My nick, too.
I am really curious that who are your journalist heroes, standing brave and smart in the spotlight, knowing everything about world politics.
Would you name them please?
Even random is random. My nick, too.
Yes, we used Qpass, and they are either out of business or are on their way out. I'm not talking about that.
I'm talking about a reputable company offering subscriptions to CNN, WSJ, Slashdot, etc... In response to the other fellow who suggested sites wouldn't do this, I could not disagree more.
It costs much more for a company to maintain their own billing and subscription process than it does to receive a check every month from a middleman. The middleman is involved because he can give the user a REASON to buy the content. I'm not going to pay $19.95 a year per online magazine. I am going to pay that for 4,5, or maybe even 10 sites. Also, the individual sites do not have market themselves nearly as much because they will be getting advertisement though the middlemen.
If done right, it will work. We aren't talking about a no-name startup selling no-name content to uninterested people. This will likely be an initiative by a large corporation with an establed brand or reputation.
"Politicians find new names for institutions which under old names have become odious to the people."
The sales figures are slightly disappointing actually. Ideally you would like to see sales and marketing costs increasing year over year since a majority of those costs probably stem from paid commissions. The implication is that they lost more than half of their sales revenues last year.
LibBT: BitTorrent for C - small - fast - clean (Now Versio
The content providers have no incentive to employ a middleman for selling subscription packages in this scenario.
So why don't the authors market directly to us? Salon is already something of a middleman. The overhead of selling subscriptions is high enough that they don't want to be selling limited subscriptions for $5, but there may be a large market for buying limited subscriptions to a number of websites for $50, of which Salon might get a $5 cut. If you get more than six times as many subscribers that way as you would $30 subscribers by selling directly, it's a win.
Ooh, a sarcasm detector. Oh, that's a real useful invention.
Actually, it's the other way around - when they started featuring that idiot Horowitz, self-hating dyke Paglia, and others, their "liberal" base, which came to the site from their days of hard-hitting anti-wingnut reporting during the Clinton Blowjob Affair, bailed out. They've been on a death spiral ever since...
Everybody is asking, "How could an online magazine lose so much money" and everybody else is giving vague answers. According to their financial reports they seem to have trimmed down considerably this year, but looking at last year they were spending about a million a month on content and production, half a million on sales and marketing, $100k on research and development (??? you tell me) and about $400k on admin. That's $24 million a year right there. Losing $11 million/year doesn't seem so far-fetched.
What interests me is that each of the two top execs made $300k last year. Not bad pay for shovelling venture capital down a hole, eh?
The only way for us to become aware of such abuses is to have a strong alternative to the mainstream media. So I would urge all slashdotters, even those who are usually apathetic to political issues, to invest some time and energy in political awareness and support for independent journalism. Otherwise, someday you may find yourself at the wrong end of a law enforcement process gone out of control.
mhack
Building a better ribosome since 1997
It seems to me that many of these responses to Salon's troubles miss the point, focusing almost exclusively on the magazine's perceived business failings. Whether or not they, or the .com downturn, or the nation's dwindling supply of patience for in-depth and serious-minded news coverage, are to blame for the magazine's dire straits, the fact remains that Salon maintains a standard of journalistic quality and integrity that will be sorely missed if they should go out of business.
As many of my worthy peers have pointed it, Salon does lean a little left, no doubt about it. But given our country's recent and violent list to starboard, and our Democratic leaders' apparent unwillingness or inability to act like a real opposition party, we need magazines like this more than ever.
I've never been a subscriber to Salon, and I wouldn't say their content is all great, but one of the things that worries me most these days is the airtight corporate control over all our major (and minor for the most part) media. Salon at least does some independent investigative journalism and is not afraid to print stories from one of my favorite journalists, Greg Palast, including his exposé of the Florida election theft in 2000, and his "re-exposé" of the same thing still going on in this year's election there. Also, Joe Conason's Journal is a regular Salon political column that is almost always great. I can get stuff like this elsewhere, but, sadly not often from a place as "reputable" as Salon. If Salon disappears the pickings will be even slimmer and the Palasts and Conasons of the world will be even more marginalized.
Investigative reporting costs tons of money, and even if Salon has the best of intentions, the bottom line will prevent them from doing lots of stories. Maybe we can use the slashdot effect to really make a difference, and not only save them, but give them the funds to actually improve. Our corporate government and out-of-control military-industrial complex need to keep the people blissfully ignorant in order to continue getting away with murder every day. Ownership of the media is their biggest weapon in this war against us, and so I've decided I can afford to pay $18.50 (or $30 with no ads) to try and save a dying breed. Who's with me?