There’s a lot of talk about paid content these days for obvious reasons and there’s only going to be more of it now that Rupert Murdoch has announced plans for News Corp. to go all in.
One of the reasons there’s so much debate over paid content is that there are a lot of misconceptions and myths about paid content. As someone who has run paid content websites for years, I thought I’d share the five biggest paid content myths I frequently hear mentioned in discussions about paid content.
Nobody pays for content. Sure they do; that’s why paid content is a multi-billion-dollar market. Many consumers gladly open their wallets for everything from music on iTunes and eBooks to virtual goods and finance newsletters. In case you didn’t notice, the blog you’re reading now is produced by a company that has a thriving paid content business. So just because a relatively small group of armchair critics and techies who don’t pay for content assume that nobody is paying for content doesn’t make it so.
Content just wants to be free. To some, paid content is an ideological impossibility. The fact that so many content owners took the ‘free’ route over the past decade has convinced these people that ‘free’ is an economic inevitability. But that’s not really true. The motivation for free was largely due to a temporary arbitrage: an unsustainable ad market that created opportunities to make more money from selling ads than from selling actual content to consumers. Now that we know the misplaced faith in the ad market was just that (misplaced faith) it’s no surprise that many content owners are rethinking their business models.
We need micropayments. A lot of people believe that the development of an easy-to-use micropayment model is the key to charging for content online. Charging, say, 10 cents to view a premium new article, for instance, seems like an easier sell than a $50 subscription. But while there might be a place for micropayments, I’m not sure nickel and diming consumers is all it’s cracked up to be. From my perspective, the greatest problem many content owners face is not how to charge for their content but how to package their content in such a way that consumers see an attractive value proposition. Mark Cuban’s recent post is worth a read in this regard.
Content is a commodity. This is a half-myth. While it’s true that there are categories of content that have been commoditized, foolish content owners are to blame as a lot of valuable content has received the pork barrel treatment when it shouldn’t have. Whether you agree with it or not, the ongoing push by many content owners, namely news organizations, to charge for content and protect their intellectual property rights represents a step in the direction of reducing the behaviors that promote commoditization.
Paid content is a solution to the print media’s woes. For all of paid content’s virtues, it can’t save companies that are completely broken. Paid content works on the revenue side of the equation; for companies with out-of-control cost structures, the real challenges are on the expenses side of the equation. There’s also a lot to be said about the importance of the content itself. Not all content produced by print media companies is created equal. Just compare the content in a struggling magazine like BusinessWeek to the content in a thriving magazine like The Economist.
Photo credit: stopnlook via Flickr.