December 9th, 2007

Paid Content on the Web Is Not Impossible, But It’s Hard

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The case for why publishers should be able to charge for content on the web always revolves around the exceptions that prove the rule, e.g. Consumer Report and WSJ — which, let’s be honest, are the same examples everyone was using back in 1998. The problem with paid content on the web isn’t that it’s not possible — it’s that it’s HARD to do, because it requires that the content not be a commodity — and content not being a commodity typically means it’s not available anywhere else for free. And the web has made free content ubiquitous.

Richard Perez-Penz at the New York Times does another round on Consumer Reports as the case for paid content:

It makes no sense for publications to charge readers on the Web — at least, that’s the conventional wisdom. But conventional wisdom does not carry much weight at Consumer Reports, that detailed guide to buying everything from prescription drugs to pickup trucks.

Consumer Reports is actually a great example, but not for why everyone should be able to charge for content on the web. Consumer Reports is a great example of just how hard it is to produce non-commodity content that people are willing to pay for — how many web publishers are going to run their own testing lab?

But it’s also an example of a content brand defending the fort against an onslaught of free content — how many other places are there to get product reviews on the web? Hundreds? Thousands? Do all of these sites rigorously test products in a lab? Of course not — but not all people who seek product reviews value that.

Consumer Reports has probably cornered the market on people who do value rigorous, academic-like testing — probably the same people who have been using Consumer Reports for decades (hint: they aren’t under 25, or even under 30).

Then there’s brand. And trust. It’s not that WSJ, or Consumer Reports, or O’Reilly produce the type of content that isn’t available anywhere else on the web for free. People pay for content from those brands because they trust them. And on the Wild Wild Web, trust is key — at least for the generation that didn’t grow up with the web, and who still doesn’t natively trust it as the digital generation does.

But Consumer Reports is in many ways a retroactive example — it’s not a forward looking example of how and why the digital generation will embrace paid content on the web.

And let’s not forget the role of search — many people who seek content on the web do so not by going to an established, trusted content brand like Consumer Reports. They find it through a different trusted brand — Google. People who find content through a search engine typically find free content (monetized with AdSense) that they perceive as “good enough.” So it’s not just about having content that people are willing to pay for — it’s making sure they can find it.

I think the first step to succeeding with paid content is to create a blockbuster online brand — one that is strong enough for people to prefer as a source of premium content, even if they have to pay for it. For example, Brian Clark wrote here about his success with charging for content — but he has built a blockbuster brand with Copyblogger, which gives him the leverage to charge for his content.

The rules of what enables a business to charge for a product haven’t changed. It’s just that for content companies on the web, the competition is fierce — more so than anyone could ever have imagined.

Comments (7 Responses so far)

  1. I think this is a great point. I think a really solid brand is definitely part of it.

    I also think convenience is another. People pay for convenience. And, despite the power of google and blogging, the internet isn’t as convenient as one tends to think. For instance, I spent a good 30 minutes recently trying to search for some specific content, and I didn’t come up with anything that wowed me- some stuff, but not fabulous.

    The topic relates to my business, and is important enough that I might be tempted into paying for content.

    For instance, I’ve read all of Patrick Lencioni’s management books, and have been applying them in my business. I’ve been impressed, and people I know who should know also say he’s a good bet in his area of expertise.

    If he offered a paid subscription newsletter, membership site, or something similar, I would be awfully tempted to sign up, depending on the cost of course.

    I think if big business is looking to sweep in millions of paid subscribers, that’s definitely a push. But I think for those of us in small business, who are working with the long tail can build up a good case for offering paid content… if we are willing to put in the effort to make it worthwhile.

    However, just putting up a few blog posts a week is probably not going to do it.

  2. [...] vuelve a la actualidad con un par de posts de Scott Karp en Publishing 2.0 y Richard Perez-Peña en NYT y Cnet que me han parecido interesantes, hablando sobre el caso de [...]

  3. Hi Scott,

    I have thought and wtitten a lot about the problems that arise from the current main stream web 2.0 business model. It leads to network monetization, walled gardens, user lock-in, data hogging etc. But turning that model around and making people pay for services is difficult as well, partly because they are already spoiled with “free” services, but mainly because most of these services do not provide enough value to the user. Whole industries are going down over that. Just look at the way the music industry has dealt with music downloads. Instead of adding value to the music and getting people to pay for that, they tried to protect the one thing that has no value whatsover, music distribution.
    If you want to get out of the “free but ad based” trap there are several options. You can look at financial transactions (eBay). You can make a living out of search. There is the free and professional account option (Flickr does a really good job at that). You can get a community of fans to pay for your content (look at RadioHead making money of their latest CD).
    But the real killer is that you need to provide the user real value, people will always pay for real value.

  4. [...] Paid Content on the Web Is Not Impossible, But It’s Hard – Publishing 2.0 “The problem with paid content on the web isn’t that it’s not possible – it’s that it’s HARD to do, because it requires that the content not be a commodity – and content not being a commodity typically means it’s not available anywhere else …” (tags: paid-site) [...]

  5. [...] Paid Content on the Web Is Not Impossible, But It’s Hard. Scott Karp reacts to the recent publicity Consumer Reports got for its success as a subscriber-based web service. My take: the problem with those who think they can replicate the subscription success of the WSJ or Consumer Reports is that they don’t have a “blockbuster online brand” or content that’s so compelling that it has value beyond free. [...]

  6. I run a weekly online newsletter publishing business and the difference for me has been operating in niche areas and having solid business relationships. I sell subs to peeople I meet and know in the industry. I write about individuals and the more I do, the more they want to sign up and pay for stuff. On the back of this I run events and promote those through the newsletter and publish print books. I guess its become the usual publisher model without the weekly magazine or newspaper in print but it started with one humble online pdf newsletter (and it was crap!)

  7. [...] Paid Content on the Web Is Not Impossible, But It’s Hard [...]

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