Boston Phoenix, Google Reader and The End of Passive Reader Support

March 15, 2013

When I lived and went to college in Massachusetts in the early 90’s, Stephen Mindich, owner of the Boston, Portland, Providence and (erstwhile) Worcester Phoenixes was talked about in the arts community as some sort of powerful, evil genius. He’d created a sizable New England empire that included the Northeast alt rock radio station WFNX, and essentially required anyone looking to successfully produce a play, run an art show or whatever, to go through his editorial operation. As artists tend to do, they resented anything that resembled a power structure, and thus resented Mindich.

At least that’s what it seemed like to me as an arts consumer. So since I wanted to know what was going on, I picked up the Phoenix every week and listened to ‘FNX when I couldn’t stand hearing Billy Joel and Boston played yet one more time on WAAF.

Like hundreds of thousands of consumers, I was a passive supporter of Mindich’s media properties. They covered a certain niche and expected me and people like me to read/listen to their content and glance at/listen to their advertising along the way. It was a fine arrangement for a poor student like me, as well as for Newbury Comics and Fishbone’s tour organizers because we were connected to each other for a moderately low price.

That whole system, free content for audiences paid for by display advertising, is a wreckage now, as evidenced by yesterday’s closure of the Boston Phoenix. It’s hard to see since there are still big, recognized brands supported by large sales operations, but the clock is ticking for display ad supported content. Display advertising won’t go the way of the dodo, but the impact it has on our ecosystem may end up more panda-like: A few rare display ad-supported operations in the wild, with a few more kept alive in media zoos, mostly supported by more vibrant revenue streams.

Display advertising is being pummeled from every direction. Last week Destructoid announced that half of their readers block ads in their browsers (much less overall, but certainly trending up). Meanwhile, the Safari browser has already and Mozilla plans to make third-party cookie blocking their default settingthrowing publishers and ad exchanges into a tizzy as they stand to lose their targeting ability. Finally, CPM rates seems to be staying steady at best, but likely declining, as ad exchanges gain efficiency and more web sites add display advertising.

What’s a publisher to do?

Alt weeklies, usually more nimble and entrepreneurial than their magazine or newspaper brethren, have been examining every potential revenue stream with a magnifying glass, from creating digital business directories to targeted events. And yet, the very real truth when spoken, is shocking. Here’s Association of Alternative Newspapers Executive Director Lisa Schackelford talking to the Boston Globe yesterday:

In general, however, alternative newspapers in large markets, like Boston, are not flourishing at the level of their counterparts in smaller, less competitive cities, Shackelford added. It makes sense, she said, that the Portland Phoenix will remain open, as will the Providence Phoenix, which plans to add four full-time reporters.

Shackelford’s statement matches my experience with my hyperlocal Center Square Journal in Chicago, as well as what I’ve heard from other hyperlocal start up owners across the country. Readers in big markets have lots of choices. Free doesn’t work so well anymore when readers are free to choose from lots of other free news sources.

All of this coincides with hard-core media consumers’ hue and cry over Google’s announced plans to shut down Google Reader. Most of the complaints have been about Google’s pulling the rug out from millions who enjoyed their product and their love of reading uncluttered (i.e. “no ads”) content.

What strikes me is that Google, for once, is doing publishers a favor by trying to force more readers to look at ads. As a publisher myself, I could never understand why Google would support a product that bypasses its main revenue generator, display ads. Talk about getting your milk for free. Not only do most media consumers not pay a subscription fee, but they essentially clip away all the ads from the newspaper before reading the content. How can anyone think that system is sustainable in the long-term?

Yet the internet is an intensely libertarian force, which means that most Google Reader users will find an alternative, ad blockers will continue their rise in popularity and cookie blocking will become the norm. Soon, there will be no real way for readers to passively support their favorite publications by occasionally glancing at ads. Readers will have to make active choices about which publications they support.

In the very near future, only those with the largest or most psychographically-targeted audiences will find display advertising a viable income source. The rest of the publishing world, especially start-up operations that lack a strong brand and ad sales team to support them (i.e. non- Condé Nast/Gawker/Disney/Tribune), will need to build their revenue plans around active reader interactions. Subscriptions are an obvious path, but so are ticketed events, survey participation and merely attending free events sponsored by publications. We will have to consciously choose to support publications either with our wallets, our feet or our data.

This intensely interactive future is likely concerning for big publishers and advertisers. It upends the commodification of advertising that has reigned since the Mad Men era and creates situations where almost every consumer interaction requires a creative lure. In other words, it’s a very expensive future.

Big media and advertising will ride this future out one way or another. Brands need to reach audiences and ad agencies and big publishers are paid to adapt. But what happens to small publishers in large markets as passive reader support disappears?

This is a serious question. We’re attempting to address it at Center Square Journal and others are attempting similar solutions. Hopefully subscriptions will become in vogue. Or a cottage market of event planners that work with small publishers will spring up.

For now though, Boston Phoenix won’t likely fly again since it has become our canary in the coal mine.