Some publishers are making big news these days by deciding to switch from an ad-supported model to a paywall — where visitors have to pay a fee for access to content. I don’t think it’s a good idea.
To oversimplify things, there are two kinds of content.
- “Commoditized” content — i.e., stuff everybody else has, and
- unique content that has a special voice/perspective, or added value.
Generally speaking, you can only charge for #2. Also, generally speaking, it seems that most content providers who think their content is unique are kidding themselves and have been listening to too much of their own rhetoric.
Internet behavior for the last decade has made it pretty clear that customers are quite willing to make do with somebody else’s version of a story if they can get it for free.
But — as Rupert Murdoch rightly says — free isn’t a sustainable business model for a newspaper. That is, if by “free” you mean trying to support your business with display ads.
Newspapers thought they could just move their ad-supported print product into an ad-supported online product, but something happened on the way to the 21st century. Craigslist, Monster, eBay and so on stole a lot of the newspapers’ traditional sources of revenue, and consumers suddenly had access to papers from all across the world.
A few papers have been able to charge for access. The Wall Street Journal can get away with it because of a perception that its coverage and perspective is need to know for business.
The same can’t be said for The New York Times or The Washington Post or any number of other papers. Articles on the Icelandic volcano aren’t even a dime a dozen.
Rupert Murdoch is betting that Times Online is unique enough that people will pay for it. See Is Times Online Doomed After It Starts Charging Users?
I think he’s wrong on this point.
So if the ad-based model isn’t sustainable, but nobody is going to pay for access to a newspaper, what’s a publisher to do?
The challenge is to tie news to some other product or service people are willing to pay for.
Here are a few mutually non-exclusive ideas.
1. Tie content to an extended ad for a single product.
Web site designers have trained people to ignore ads (which are conveniently grouped into a column so they’re easy to avoid), and this is part of the reason why ads don’t work very well. Site designers and content creators need a different model.
Without turning the content into an advertorial, a publisher could find a product that’s closely related to the content and give it extended and exclusive coverage on the page. An obvious example of this model is a book review with a link to buy the book, but there are other options. The content provider could monetize this any number of ways — sponsorship, CPM, CPA, etc. But the key to success would be a very aggressive campaign to find a niche product that closely relates to each piece of content. The idea is to ensure that the people reading the article are the type who might care about the product.
2. Use the content to encourage signups for a free email and sell to the email list.
Under this model there are no product ads on the page. The content is simply a draw for prospects for a related email list, and that’s where the selling is done.
3. Create free and premium versions of a story.
A news organization could use a mass-market story as a loss-leader for some truly unique content — a related tool, special report, form or checklist. For example, a free article about retirement could have links to a for-pay retirement calculator.
Note that the premium content does not have to be online. It could be a print subscription or a training video.
4. Require registration for access to content and collect demographic data on your users.
Targeting is big in advertising, but in order to get demographics on site users the publisher needs to track their behavior, and in order to do that the user has to sign up. A popular way to get sign-ups is to require registration to comment or post a question. (IMO a publisher should try to use openid rather than creating their own registration system. As a web user I find it annoying to have to create a new id for each site.)
The key to this model would be really good tracking. What kinds of articles do people read? Which ones do they like and dislike? Which do they comment on? Which commentators do they follow? That’s valuable information to advertisers.
5. Re-think the concept of a newspaper.
The newspaper used to be the one-stop shop for news, funnies, ads, sports, style, etc. It’s simply not that way any more, and content creators need to adapt.
Now people go to Drudge, comics.com, craigslist, espn, glam, and so on. Newspapers have tried to re-create the paper online, and the effort has failed because the web has atomized all interests.
Perhaps it’s time for each content creator to be a profit center. Maybe the book reviews aren’t on the paper’s site — they’re on Amazon. And maybe the foreign affairs writer has a blog.
The bottom line is that publishers can’t force consumer behavior to accommodate the publisher’s broken business model. Content has to learn to pay for itself in a new market.