Commercial masters of our Voice

Once upon a time publishers sold content to readers, and readers to advertisers. This two-fold market is being destroyed by the same technology that enables writers and readers to engage with each other in ever more sophisticated ways. But, argues Tony Curzon Price, audiences that recognise their collective economic power could handsomely fund the media they want.

Tony Curzon Price
Tony Curzon Price
26 July 2013

If you want to understand a magazine, read its advertisements.

Here’s the example from my favourite weekend indulgence, the brilliant UK edition of “The Week”. When I read it, for that hour on a Saturday breakfast, I inhabit a new persona. Its voice addresses me as a member of an English middle class with all its best virtues on display - humour combined with seriousness; responsibility without self-aggrandisement; common sense and clarity that doesn’t for that reason dumb down; and lots of entertainment. And addressed as that person, I feel that’s who I am - that’s what an audience does, and that’s where the power of the Voice comes from: by convincing you are something, you become it just a little more.

So when I pick up the postal cellophane wrap, I am about to enter an identity. Only the advertisement on the back cover shows. It’s for Patek Philippe. A watch I’m neither ever likely to desire or to afford. But if you do desire one, or even have one, you’ll associate your desire and the persona you’re about to enter. It’s Pavlovian, really. The salivation at the indulgence to come is associated with the bell that is the advertisement for an expensive watch. Patek Philippe is making itself part of the landscape of aspiration of the English middle class.

The next advertisement is on the inside front page, a double spread for Breitling, another watch I have no time for. I’ve spent a moment on the cover. The saliva is rising. The bell has gone. But a new conditioning signal gets interposed between the anticipation and the satisfaction. It’s the “Super Avenger II”, with lots of dials and a chunky, action-man look. “Yes, of course,” I can almost hear my temporary persona whispering, “that’s also part of who I am. I’ll need it for when I take the pre-war by-plane out for a spin over green hedgerows and Cotswold villages later in the afternoon”.

For the next 6 pages, the Voice takes over. The Voice briefs - interspersed with just a few jokes - and makes me feel that I’m ready to rule the world. Serious business; I’m a responsible national and global citizen with my role to play. It’s important I be informed about all this; not only would I not want to be disturbed by anyone hawking me their wares, but no one would seriously want to set up shop in the vicinity of such weighty matters - I’m in Whitehall, not Whiteleys.

The next advertisement comes with the first piece of naked entertainment. It’s opposite the celebrities page and offers me investment management services. After the tribulations of our world, I’m offered the theatre of the personal to relieve my troubled mind. A pretty good moment for an investment management pitch - my savings are also all about the theatre of the personal, and the vicissitudes of the world, with all its worries, are a receding yet still present memory.

On it goes. Try it yourself - the advertisements and the contents of a well-designed magazine exist in a complete symbiosis. Read the two together for a complete understanding not only of how the Voice proclaims, but also how it whispers.

My favourite example this week comes a few pages later, on the letters page. The Voice has rounded up the best of the week’s correspondence to the national press. I have a strong image of the people writing these letters to the Guardian or the Telegraph or the Times, from Wigan or Warnham or Woodbridge or Saxmundham. What would you advertise next to this image of the serious, concerned scribblers from their homes throughout the nation? Here’s Lloyds, choosing a 2nd life-style cartoon of a new home buyer mowing his new lawn of his tidy “new-urbanist” cottage with a Victorian railway bridge in the background carrying an HS2 emblazoned with the backward-glancing, dancing, Lloyds horse. Our character is pondering the world as he mows and, if he comes to a noteworthy conclusion, he too will cross over the page and write to whichever editor of the national media he feels most at home with. The two pages marry the home and the nation - the letters representing the social ritual we’re all proud of and the advertisement showing the financial plumbing that makes it all possible.


(No mention, of course, of the bailout that is at the heart of Lloyds’ own position in the economy of these two pages … the massive money transfer from the letters page to the advertisement tells the buried reality of the story that the two pages obfuscate: Lloyds does not make the social ritual possible; it was the society represented by the letters that makes Lloyds’ existence possible.)

Modern microeconomics has characterised the business of advertising-supported media as a “two-sided market”: the production of a good that has two distinct sets of customers. In the economists’ version, media supplies readers with content - market number 1 - and supplies readers’ attention to advertisers - market number 2. The two sides of the market influence each other: the number of readers that can be supplied to advertisers, their wealth, and the nature of their engagement with the editorial content all influence how attractive advertisers find each publication. The more attractive the publication to advertisers; the more advertisers are willing to pay for the attention, the more can be spent on producing the content that readers like to attend to.

It’s an attractive reduction of the business of media, and it explains a great deal - the rise of the free newspaper, the delicate balance of over-filling a schedule or a publication with ads versus not having the revenue to create the content. It even provides insights into the sorts of media that will exist: an editorial project will gather around it the community that likes to be addressed in that particular way, that likes to inhabit the persona assumed by the Voice. The nature of the Voice will determine the quality of the attention that it can deliver, and so will determine its advertising revenue potential. The sorts of things that make a Voice rank high in this competition are some of the obvious variables, like the sheer number attracted and their spending habits. But others will also turn out to be important: is the quality of the state of mind that the Voice puts you in one that is conducive to the psychology of brand attachment? Does the Voice address a persona that is at the heart of an identity, something that defines you not just as an indulgence, but in your whole being, your attitude to the world? There’s much more for the brand manager to work with in this case than with the mere entertainment. The Voices that identify a class with money to spend and shapes their souls will flourish in the world of the two-sided market. Think The Economist, or indeed The Week - both combine great quality with fantastic profitability. They should be the poster-boys of the 2-sided model.

The two-sided market view, with its emphasis on the business models of media is a “manufacturing” view of the media. There is a product creation process like in any other industry - and there are two markets who need to buy. The necessary inputs are stories, and the result is a profitable business.

But that’s not how the business feels like from the inside - certainly not from the inside of a publication like openDemocracy, and probably not from any but the most cynical media creations. From that perspective, if there are two sides at all, they are readers and writers - the necessary input is money, and the output are stories. Or more accurately, the output is the Voice itself - the elaboration of a worldview that brings together readers, writers, editors and all others involved in the joint creation. Writers tune their writing to a readership; editors commission with a stake in their roles as both writer and reader; readers react, click, comment and share. And so on. Ask any of them what is valuable in the process, the answer is not going to be “the revenues”, as would be the natural answer that comes out of the manufacturing model. What’s valuable is the process of the elaboration of the Voice. This is the story of the historical development of journalism as told by the US media historian, Michael Schudson. In the early 20th Century in most American cities, proprietors, advertisers and political machines understood the “2-sided” model of the market. But they discovered that building an audience required editors and journalists who demanded to be left alone. They developed their own, separate two-sided mechanism: bringing writing into contact with minds.

The glories of the 2-sided market are becoming lost in nostalgic haze for most publications. As it happens, you can't get the Week online, let alone for free. Maybe that's why I read it on Saturday morning, rather than cherry pick the best bits now and then as I do for The Economist. So The Week thrives in its apparent Luddism. It's not that the online world doesn't generate advertising revenue - that goes to Google and Facebook - it's that it generates an experience a great deal different from the Pavlovian conditioning the 2-sided model needed to direct the money flow at the publication. That's the basic bad news the web brought to magazines. But the good news is also there for everyone to enjoy: it has allowed the creation of a hive number of businesses that defy commercial logic because of the conviction everyone involved in their production has of the value that they create, regardless of any commercial measure of value. Writers are paid in readers; readers give attention and receive stories; commenters create debate; social sharers contribute marketing. It all almost works outside of the cash economy. Indeed, on social networking sites and a few hobbyist forums, content creation does happen with only very peripheral links to the cash economy.

But content that survives outside the cash economy has no paid writers or editors or fact-checkers. It can nevertheless be an instance of the elaboration of a worldview - every Facebook stream has its Voice, emergent but loud and compelling (even Google learns to speak to me more convincingly). These platforms may be handsomely part of the cash economy; their content creators are not. These Voices will continue to occupy a large slice of our attention capacity supplied “for free”, but there’ll be a residual demand - and need - for expensive content.

But life on the fringes of “free” - free to view but not free to make, the space where the commercial magic of the 2-sided manufacturing model breaks down - have to confront that other great challenge of freedom - the free rider, that horseman of disaster in the Tragedy of the Commons. The tragedy arises in cases where private property is too mean - it unnecessarily excludes people - and free provision is too generous - people don’t feel the need to pay their share, so not enough is provided. And that, for good and ill, is the situation we’re in with most worldviews that are seeking expression.

Think of the elaboration of a worldview as the activity of a club. The most fortunate of those clubs are the ones who, by virtue of their footfall and demographics, can handsomely pay for their activity by selling sponsorship and advertising. They may not even need to restrict entry to clubhouse, because a worldview is (mostly) non-rival: one person enjoying it does not preclude another enjoying it. Indeed, to the extent that a worldview seeks to be performative - to change the world it views - it is even better than non-rival: its value rises the more people enjoy it. This is why so many commercially marginal web publications - from openDemocracy all the way to the mighty Guardian - embrace the key commercial characteristic of the Commons - “free at the point of use”. The value of elaborating the worldview increases the more are at the party. And since these are endeavours that are anyway commercially marginal, they exist by the logic of the value of the endeavour, not its profitability. That’s why they’re moved to embrace “free”.

These clubs are non-rival and they’ve made themselves “free”. Hear, therefore, the cantering hooves of the free-rider: he can enjoy the club benefits without contributing to covering the unavoidable cost of the common endeavour. And the more join his grim cavalcade, the more tragic the outcome.

But the intriguing fact is that the history of human sociality is the history of how we’ve overcome the tragic logic of the Commons and solved problems of collective action. The asocial animals are precisely the ones that have minimal need for coordinated behaviours. Every collective enterprise has at its core the possibility of free riding. Commercially marginal web media simply has to join the long historical line of projects that have to invent their own politics to deliver a collective good. Sumerian temple complexes sharing the bounty of fertile land and water did it in a nasty way. Alpine villages sharing summer pastures did it in a better way. Newspaper editors will need to study politics not as outside observers, but as everyday practitioners.

Journalists and editors are typically gloomy about their commercial prospects these days.

That’s quite understandable: many used to live in the charmed world where the 2-sided market functioned fine, but have found that the logic of “free” and the slice of advertising spending that Google now takes is edging them towards commercial marginality. But if my analysis is right, then what we’re about to see is a great rebirth of the newspaper as a political project. This leads to the exciting questions that Dan Hind has been asking about what a democratic media will look like. (There is no intrinsic reason why the new politics of Voice-making publications will be democratic; some of them won’t be; but there is one set of projects that is just that: how do we solve this tragedy of the commons democratically”?). And I think he’s right that every detail of the process of forging a worldview will be transformed by the new relationship that has to be forged between all the members of the club. There will be democratic commissioning, “town-hall” style editorial meetings, and a professional “civil service” of editors, writers, illustrators, fact-checkers, commercial types, activists and community organisers. It’s a rich and exciting prospect. But the journey from here to there is still far from clear.

As a footnote to this whole story, let me present you with some numbers. There will still be the pessimists who think that the chaos caused by the horsemen of tragedy is so dire that the commercial side will never add up; that the free-rider of the Internet is atop a Trojan horse that will leave us with only media controlled by the mighty propagandists of states and corporations.

What I’ve done in the numbers below is to take what I think are relatively sound numbers for openDemocracy to calculate the kind of revenues that a well-functioning resolution of the Tragedy of the Commons should generate and I have scaled them up for what I think is true of the Guardian. I feel that both Magnus and Alan Rusbridger should be heartened by the analysis - the openDemocracy club ends up with just over £1.3m to spend per year, while the Guardian gets a generous budget of about £75m. Let me explain my assumptions and the picture behind this.


We have about 300,000 monthly pageviews, and my guess is that the Guardian has about 17 million (my guesses are in yellow - you can click through to the spreadsheet and put in your own). Most of those pageviews come from occasional readers, Google-searchers - that part of the audience to whom the club likes to perform for its own worldview-changing reasons. They add value because they add importance to the project. But they can’t be expected to pay anymore than they’re giving already through the value of their attention. But there are about 25,000 people (8% or so) for whom the project is an important part of their lives - they come several times per week, even per day. And amongst those, there are 8% who already understand that they are part of an effort of co-creation - these are the 2,000 or so who are already willing to donate to overcome the logic of tragedy. In the right hand column, you can see these percentages applied to the Guardian’s scale.

Now to revenues. The inner core - the 0.66% - will donate, we know, £30 per year. The “outer core” - the 8% - are, I believe, free-riders who will contribute to the collective venture as long as it is sufficiently easy to do so. They see the value and understand the logic, but in their busy lives, they simply can’t and don’t take that extra step of joining the inner core. It is entirely understandable - there are any number of clubs, on and off-line, where this characterises my behaviour. In this model, I have assumed that each of these 25,000 make £1,000 of online purchasing decisions every year. Between buying books, groceries, choosing your energy supplier and organising your travel, that seems to me a reasonable assumption on average.

I have also assumed that the collective project can persuade the 25,000 to make these purchases through affiliate marketing programs. Amazon, for example, will give a 5% cut to a website that refers a buyer. Most online retail has affiliate marketing programs. It makes complete sense for them to do so. Imagine a website as a small town. A retailer on the high-street can expect to pay a higher rent because of the footfall; in a properly operating local taxation system, that should translate into higher revenues for the collectivity: the benefit is created by everyone together, so they can organise to take a share. Affiliate marketing is just the same - offer a retailer a space in the commercial mall on openDemocracy and expect to take a cut from the reference.

25,000 people acting together - even in a minimally effortful way - is a powerful force. It is the size of a small town that can afford some sort of public sphere. openDemocracy is used to the idea that a demonstration or occupation involving those numbers would be an achievement. But so would a commercial commitment. In the exploration and creation of our Voice, we will achieve control over our futures when we learn to act all of us together - the economics of the web turns out to be politics for us, which we ought to be good at. 

What does this all mean practically for sites like openDemocracy or even The Guardian? Well ... as a first step, there is simply implementing something of the model above and communicating to the committed free-riders - the 23,000, in openDemocracy's case - who will do something minimally effortful to help the project.

But the logic can be taken further. The core of the idea is that collective buying is a force that generates commercial surplus and that the Voice can be an essential factor in creating those collective buying opportunities. As true believers in the power of the bottom, a democratic platform needs to equip itself with all the tools for readers themselves to take control of their joint and collective behaviour. A proto-emanation of this that's very visible (and profitable) on The Guardian but not (not yet, maybe?) on openDemocracy is the dating site - this is not only hugely commerically viable for The Guardian, but it also provides the kernel of a model: readers enabled to self-organise by the platform, for their own ends, but to the benefit of both themselves and the platform. I'd much rather think of my publication paid for by love than Tag Hauer. The dating site is not yet the full model, because the participants are not dating through the Guardian because that allows the organ of their worldview to flourish. It is still a service offering, not a "service making". But the site is helping groups of readers to organise, and the participants are self-selected by the Voice they like to be a part of.

So the intimations of a model are here: the essence is to allow many readers to turn themselves into many collective forces in situations where coming together can generate a commercial surplus. What about enabling UK readers to club together to offer a mass move to a green energy company? Knock on a commercial door representing 5,000 people and watch companies pay for your custom. Various hobbyist organisations have understood the power of collective buying for a long time - another one of my media indulgences is Skywings, the British Hang Gliding and Paraglising Association's monthly magazine. The organisation exists because of the collective need to secure take-off sites around the country and to supply third party air accident insurance. The organisation of collective purchases permits a nudged contribution to be made to the magazine which elaborates the world view of the group whose funding makes it sustainable. So a need to buy collectively creates the possibility of funding the Voice; but the reverse should be possible: the desire to elaborate a world view could create the possibility of exercising collective economic power. 

The elaboration of the worldview needs to include within that world an answer to the Voice's own commercial viability. And if a democratic and responsible Voice is going to permeate the project, let its politics dictate its business, and its business become a politics.

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