Originally posted on Gigaom:
We’ve pointed out before how Facebook and Twitter face the same kind of problem that the mainstream media industry is struggling with — namely, finding enough advertising revenue to make up for the fact that they are essentially giving away their content (or in the case of Facebook and Twitter, giving away a platform for users to publish their own content). A recent piece in the Columbia Journalism Review argues that Facebook is much more likely to make this ad model work than a newspaper, but why is that the case? One reason is that the social network knows a lot more about its readers than any traditional media outlet does, and as the media business continues to evolve, that knowledge — and the larger bond that a newspaper or any other media entity can create with its readers — is increasingly important.
Ryan Chittum’s piece in the CJR takes issue with a recent Washington Post story on Facebook for a number of reasons, including the fact that he doesn’t think the paper really understands the social network or its finances. But he also finds it ironic that the newspaper — one of the few major metropolitan media outlets that hasn’t implemented a paywall, primarily because of chairman Donald Graham’s opposition to the idea — is castigating Facebook for pinning all its hopes on a free platform that is monetized by advertising, when that’s exactly the same model that the Washington Post is built on (Chittum recently catalogued some of the Post’s financial woes in a separate piece for the Columbia Journalism Review). As he puts it:
There’s all kinds of irony about the Washington Post slapping a company for a ‘give-it-away-free approach’ that has hurt share prices… But mostly it’s that the WaPo, instead of looking in the mirror, uses an extremely profitable company to frame a story about how hard it is to make money without charging on the Internet.