Charging for online content is possible
By Larry Kramer
NEW YORK– There are many who believe you can’t charge for content on the Web. They fear consumers stand firm in their conviction that all online content should be free. Therefore, you simply can’t charge.
Those who believe that are probably wrong. But most media executives are too scared to prove it to them.
Media moguls are afraid to charge for content because they fear winding up with fewer dollars and fewer readers. Right now, newspaper executives take some solace in the fact that even though circulation numbers are plummeting, at least more people are reading their content than ever before — thanks to the Web — even if the bean counters can’t “monetize” it.
Enter media mogul Steve Brill, who started a new company to create a mechanism that would help media companies learn how to charge readers for their online offerings.
Brill created Journalism Online LLC along with fellow mogul Leo Hindery and up-and-coming mogul Gordon Crovitz, who managed The Wall Street Journal’s online pay strategy. The Journal is seen as the industry leader for collecting money from readers for the right to read the paper’s content online.
This isn’t the first time Brill has been down this road. About nine years ago, he created a company called Contentville, designed to collect micropayments from people for Web-based content from many different publishers. I was one of what may have been a handful of people who actually did pay money to Contentville for access to Inside.com, a site about the media.
Too few people wanted to pay for content on the Web to make Contentville work, and it was shuttered after the Sept. 11 terrorist attacks.
In all my Web efforts, I have always advocated making as much online content as possible free to all users. I believe there ultimately will be enough advertising to support widely read Web content.
But I have also believed in multiple revenue streams to help media companies deal with advertising droughts, like the one we are in now. And for several types of niche content, audiences are used to paying a premium.
I find Brill’s latest effort interesting because there are a couple of aspects of his proposed model that are essentially side effects but are important enough to carry the entire idea.
One of the pet peeves all consumers share concerns the chaos around print subscriptions. We never know when we really need to renew a magazine subscription. From the day a subscription starts, we get blitzed regularly with renewal notices. Eventually, because we never remember when the subscription is up, we put off paying any of them until warned about damage to our credit.
How much would we all love to have someone manage all our subscriptions, allowing us to go to a single page on the Internet that tells us the status of all of our Web, print and maybe even video subscriptions? For the first time, we would actually know what we spend on information, and we could make intelligent decisions about what’s worth keeping.
Media companies could save a fortune and stop sending out their weekly letter. Instead, they would just send account alerts to our new middleman, who would alert us via email or text message, that some action is required on a subscription. For our part, we could decide to have a subscription renewed automatically — or not. We could even change our mind and cancel whenever we wanted.
All this serves the consumer well.
Business could win
The second potential winner in Brill’s plan is business. Business owners all have problems monitoring how much money they spend on information for their employees.
Giving consumers every option the Internet can offer is exactly what we should be doing.
Historically, employees find multiple ways to have their companies pay for their newspaper, magazine or Web subscription. They use expense accounts, company checks, company credit cards — you name it. If Brill’s idea takes hold, companies could manage all their content acquisition through a single place and keep track of how much they spend, as well as possible duplication and waste.
These are nice side effects of having a content clearinghouse.
But to get back to the real point, we have to assume that people want quality content, whether it’s entertainment or informational. We are watching business models develop around entertainment. Apple’s (AAPL)
iTunes is doing big business selling content to people who could watch or listen to that content for free but are willing to pay to watch or listen to it uninterrupted.
There is no reason to believe that consumers of nonfiction material won’t be willing to do the same thing. In the end, those who run digital-media businesses don’t really care who pays for what they do, just that someone does. Giving consumers every option the Internet can offer is exactly what we should be doing.
Test every alternative. Offer every alternative. As with every other business undergoing a reinvention on the Internet, let the customer choose. End of Story
Larry Kramer is the founder and former chief executive of MarketWatch, publisher of this report, and is the former president of CBS Digital. He also was a newspaper reporter and editor for 20 years. He now serves as senior adviser to Polaris Ventures.