Saving newspapers and books, writers of all kinds

In an article about the politics and economics of consumer choice in cable entertainment (“Bland Menu if Cable Goes à la Carte”) in the New York Times, the author talks about how it’s actually a good thing that the costs of producing niche programming are borne by all cable subscribers, as otherwise such programming would be very expensive and possibly not attract enough buyers to exist at all (even the most popular channel, ESPN, would rise from $3/month to $12/month). This makes sense, and could be a useful way of thinking about two other media businesses that are in some trouble: the Web and newspapers, both of which are in that bad à la Carte downward spiral.
In the case of the Web, despite the large amount of investment and growth in Web users, the economics still do not support niche content in any serious way. Small publishers have not made a living off of their content, depending on VCs or large distribution networks for investment to stay afloat, or publishing despite the lack of money. And even the most popular blogs on the Internet make a tiny amount of money compared to any other publishing medium like books, magazines, TV, etc. For example, Boing Boing is estimated to bring in $50,000/month in advertising revenue, which sounds like a lot until you consider that a single full-page ad in a local magazine like New York generates the same amount of revenue. Traditional media companies like AOL and Yahoo! have tried to aggregate many small publishers and sell ads across all of them, but despite getting a lot of traffic for this content, the rates for ads remain low (and at flat growth rates). The money remains in search text ads. Jaron Lanier pointed out in an Op-ed that this model doesn’t work for content authors.
In the case of newspapers, their audience is falling steadily and won’t sustain the costs of keeping the staffs of reporters and editors working (let alone the costs of publishing in print). They have had some success working with internet networks like Yahoo!, but this is likely not sustainable nor will it replace enough revenue to keep things going at current spending levels (magazines haven’t had the same problem, but that’s another topic).
So given that the cable model supports a number (not a huge number, but a number) of niche content players, and given that the Internet functions well as a big lab for new ideas but not for building content businesses, maybe what’s needed is a sort of content consortium, or at least association of creators, with thresholds for membership and the ability to bargain collectively for better compensation. This would be different from a union, more like the Author’s Guild or Screen Actors Guild, where plenty of work is done outside their auspices, but productions that generate a lot of revenue must conform to standards of pay. The cable model shows that if companies seeking to exploit content have to buy in to a collective pool of content, content costs are lower while allowing even niche content to thrive. This model doesn’t need the cable networks to work for the author’s benefit.
In a rough environment for content creators, where the economics are against them (but no one wants them to stop creating), the authors and makers should hang together more than they are. Some kind of association would re-balance a business that is out of kilter, draining the money out of a very valuable part of the culture we live in.