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What It Will Take for Paid Content to Work
With the news business on the cusp of change or collapse, TheWrap visits the stations of the cross on the path to PAID.
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So here we are - starting the second decade of the 21st century. Here at TheWrap, we're undercutting the anxiety of the age by curating the must-know and must-see for 2010. Mark those calendars: We've got the skinny on the most important stuff that's coming up this year.
How do we get people to pay for their news on the web?
What was once a desperate mirage now shows the hard outlines of a plan.
- Rupert Murdoch has threatened to dump Google and is flirting with Microsoft over selling his content to their upstart Bing search engine.
- Steven Brill’s much-hyped Journalism Online has a network of more than 1,200 publishers ready to collaborate on paid content.
- And Time Inc. is considering an iTunes-like application to charge for its magazines’ content, either via subscription or on a “per song” basis.
What else has to happen? With the news business on the cusp of change or collapse, TheWrap visits the stations of the cross on the path to paid content.
1. CRITICAL MASS
There are plenty of publishers talking about paid content. But enough major players have to move to a paid model simultaneously, or it won’t work.
The main reason for this is obvious. If the New York Times goes behind a pay wall, most consumers will simply go to the Washington Post or Los Angeles Times for free. But if a critical mass of sites decide to go to some form of a pay system -- at once -- consumers would have no choice but to pay.
"You need a perfect storm," says Elizabeth Osder, principal at Osdergroup.com, a digital strategy consultancy.
The New York Times, which once had a pay wall – TimesSelect – in place, before abandoning it in 2007, says a decision on how it will proceed with the paid content issue is imminent. “It’s a much tougher, more complicated decision than it seems to all the armchair experts,” executive editor Bill Keller told the paper’s public editor recently. “There is no clear consensus on the right way to go.”
But a growing number of publishers have looked at the bottom line. According to the American Press Institute, 60 percent of newspaper executives say they're considering paid content options. This despite the fact that 90 percent don't charge for any content online.
2. WILLINGNESS OF CONSUMERS TO PAY
If you build it, will they come?
So far, it doesn’t look good.
A new Forrester Research report shows that 80 percent of nearly 5,000 consumers polled say they “wouldn't bother” to access newspaper and magazine content online if it were no longer free.
“It's especially notable that, while publishers talk about micropayments so much you could design a drinking game around the word,” the report reads, “only 3 percent of consumers say they'd prefer this method of payment for newspaper and magazine content.”
Another recent study was not so gloomy: Of 5,000 internet users polled globally by Boston Consulting Group, 48 percent in the United States said they were willing to pay to access online news and would pay an average of $3 per month to do so.
The bad news is that the U.S. tied with the U.K. for lowest percentage among the nine countries surveyed -- and Italians said they’d pay an average of $7 a month to access news.
3. THE RUPE FACTOR
If News Corp were to switch over to a paid model unilaterally, perhaps that could do it – and its boss Rupert Murdoch is definitely on the move.
Murdoch in recent weeks has accused Google of “stealing” his stories -- and Sunday it was reported by the Financial Times that News Corp.
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Keep that which is best positioned and excise the rest or use it in customer acquisition efforts. OO
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WestRight Says
What are these Media Moguls thinking?!? They are the most reviled partison news sources in the country and they think they will attract customers to their rapidly declining readership by putting up pay walls? I was a WSJ paid subscriber for many years just because of business, I don't bother anymore, the WSJ is just 1 of thousands of sources and not even that good! The rest of the Bigcrap Newspapers are not worth reading free!
Please, please put up a paywall like the NYSlimes did and we will finally be able to totally ignore the rubbish put out!It's a Whole New World and the Media Masters are as doomed as the Dinosaurs watching that bright glow in the sky!!!! Want to see real reporting that the Lame Media ignores, search for: 'CRE climate fraud' or 'AGW liars' to see the future of information transference!
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The_roth Says
Will the brave new era of paying for news begat the brave new era of news piracy....aha me hearties splice up the copy boy!
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Allan Hoving Says
Letting users choose from "many ways to pay" will ease the transition. See the model at http://www.PayCheckr.com
Mark Z Says
Some great points, of course, to which I'd add a few complementary ones.
Publishers need to apply clearer focus to the assessment of what portion of their content (or content they could generate/own) has the potential for paid support. To date, they have been largely trying to find a way to charge for what they already have, whether or not it is pay-worthy. By "pay-worthy" I do not mean that it is or is not of high quality but rather that it is significant enough to the consumer. Keep that which is best positioned and excise the rest or use it in customer acquisition efforts.
The assertion that making payment easy is critical is absolutely correct. Also tone down assumptions and do not assume that the entry price is the end game. Start modestly to reduce the barrier and then, if the content quality and attractiveness is high, move up the pricing curve on the retention end. This was the entire underpinning of the periodical subscription business forever and yet the panic about near-term revenue declines has confused things. Apple started at 99 cents and now has moved premium tracks to $1.29. AmieStreet employs a variable pricing model in which the price goes up as a track gains in popularity. ESPN has several price access points. It won't replace the declines in the near term but does provide a foundation for innovation and appreciation.
Last point - "verticalize" more effectively. The consumer product companies realize they are now in the content business. But too few content people have figured out that the opposite is true as well. Ad placement is proven to be an insufficient revenue generator. The rev share models out there are far more attractive though more complex to implement - unless there is a vertical focus.
Thanks for the insights and opportunity to chime in!
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