The pundits who post about unsustainable online business models or the general demise of the publishing industry often position their arguments in stark, either/or terms: print vs. online, paid vs. free, etc. etc.
TechCrunch’s Paul Carr is the latest to paint online publishing with an overly broad stroke. He cites the layoff of Slate media critic Jack Shafer as the latest example of why the “grand experiment in free online content has failed.” Online advertising, he explains, “is a numbers game. And, even on niche sites, the number of salable page impressions required to even break even is huge. There are just too many pages of content being produced for advertising to remain a viable long-term business model.”
Publishers, Carr adds, should not be “wasting money publishing their content on the web.”
He’s right – sort of. There’s a key word missing from his blanket statement: Online advertising is not sustainable as a STANDALONE business model.
There is no single online business model. There are many. The challenge is finding the right mix.
20 to 30 revenue streams
“The Internet is about stacking dimes,” a publishing executive told me recently. “You need 20 to 30 revenue 
streams, and you have to adjust quickly based on what’s working and what’s not.”
For many publishers, free, ad-supported content will (and should) remain an important component of the online business model. But instead of trying to build an entire business around free content, publishers should leverage it as a means to an end.
Carr notes that Huffington Post and The Daily Mail are the only two general-interest media sites that have cracked the online code. But any business built around what Carr describes as “selling millions of pages of animal stories and celebrity fluff, churned out by underpaid hacks,” is unsustainable. Even HuffPo must achieve a balance between SEO-induced fly-by audiences and the return readers who are loyal to your brand are probably willing to spend more (time, information, money) if you can show you actually care about serving them.
Value can be measured in many ways. Newsonomics’ Ken Doctor recently wrote about the growing influence of ARPU (average revenue per user), a performance metric that mobile carriers and cable companies have used for years. “ARPU basically says: Don’t tell me how many customers you have; tell me how much moneyyou are making on eachof them,” Doctor wrote. It’s a better way of defining your most valuable (or value-creating) readers.
The evolution of freemium
This is the evolution of the freemium model. It’s really Marketing Funnel 101 stuff – awareness, consideration, conversion, loyalty, advocacy. Online publishers have never been very good at the last few stages, because they’ve been so focused on monetizing page views.
Even Carr admits that the Web is a great marketing tool – which is how publishers should view their websites. The Web is the equivalent of a storefront that lets users discover (through search) and browse for something they like – in this case, content. It’s up to the publisher to provide increasingly relevant information to these users and, ultimately, get them to convert – by signing up for a magazine or newsletter subscription, downloading a white paper, buying a mobile app, or purchasing a data product. The better you serve them, the more stuff they buy.
It’s not just about paid content. There’s plenty of room for innovation within the existing advertising model. This 
week, for example, Condé Nast is rolling out a new toolbar called Social Sidekick, which will appear on article pages and provide links to the most shared content from other Condé Nast sites. The expandable tool bar (bottom of image at right) is sponsored and integrates both editorial and advertiser content.
The press release says the tool presents advertisers with “a highly customizable product … that gives companies the opportunity to develop engaging narratives by mixing highly produced and real-time content. An advertiser can feature multiple streams from community, social and brand platforms including Facebook, Twitter and ecommerce. Brands are also able to modify their content quickly in order to leverage reader interaction and interest.”
Truth is, there’s plenty of innovation to be had, if you know where and how to look for it. (Hint: Start with your audience.) Often this takes an outsider’s perspective. Someone like Steve Jobs, who as the New York Times’ David Carr points out was a major media disruptor, simply because he viewed the business through a different lens than traditional publishers:
“Again and again, [Jobs] would step up to entrenched players in the media with calcified business models and explain their business to them in ways they did not recognize from the inside.” Jobs, Carr added, “reverse-engineered the business model of the industries that produce the content for Apple’s gorgeous hardware.”
You don’t have to be Steve Jobs to figure this out. You just have to start stacking those dimes.