The future of paid content

The hopes of newspapers to shift their Web users from free to paid models suffered a fairly substantial setback this morning with word of a new study from the folks at Nielsen. According to a report in Online Media Daily,

A new Nielsen survey says 79% of users would no longer access a Web site that charges them. The finding also assumes that consumers can find the same information at no cost. The new report from Nielsen surveyed 27,000 consumers from 52 countries.

Looking at new fee-based areas, the survey shows that 71% of global consumers say that if have to pay for online content it must be considerably better than what is currently available for free.

Paid Content conference logoObviously, media companies need to get paid for their efforts, so this disconnect between users (let’s remember that they’re real people, see below) and the copyright community needs resolution somehow, and fortunately, there are smart people trying to work on the issues. A lot of them will be on hand this weekend at a new conference in New York on the concept of paid content by the people who report daily on the subject, PaidContent.org. The scope of “Paid Content, Discussing The Economics Of Content” includes:

  • Business strategy and models that are working across news, information and entertainment
  • The people and companies driving innovation
  • The cross-platform approach to developing these diverse revenue streams
  • Music, TV and movie downloads
  • Subscription streaming
  • À la carte payments, micropayments, subscriptions, donation models, subsidy models, and mobile payments

Staci Kramer, courtesy James MontagueIn other words, just about everything involving people paying for content. I caught up with ContentNext Media EVP and co-editor of paidcontent.org, Staci Kramer, with some tough questions about the idea of paid content:

Q — What is the future of paid content? Content that used to be ad-supported is now competing with content that IS advertising, and I’ve read from many knowledgeable observers that “content” is no longer king. Given that this is the namesake of your company and your conference, what are your thoughts?

KRAMER: Our flagship site, paidContent.org, was founded by Rafat Ali in 2002. As we added sites and other elements to the company, the corporate name became ContentNext Media — chosen in no small part to reflect a constantly changing area. To me, all content is paid content — the differences are in who pays for it. With our sites and newsletters, advertisers pay to gain access to our readers. In theory, and often in practice, readers pay for “free” and ad-supported content with attention. Cable, newspaper and magazine subscribers pay for access and delivery, usually subsidized by advertisers; some are willing to pay more to get media and entertainment without ads. You get my drift.

So what is the future of paid content? Nothing that makes money now is going away any time soon. We’re in an age of maintenance mixed with experimentation — keep as much money coming in as you can while you look for solutions. It’s also an age of opportunity. That’s one reason we’re having paidContent 2010 — to hear about what’s working and to explore the possibilities.

Q — Your speaker list is a veritable “Who’s Who” of the content world. Do today’s “content” people really have a handle on what’s disrupting their world, and, more importantly, what to do about it? I’m partly referring to the issue of aggregators, like Google.

KRAMER: A lot of them do — or at least are trying very hard to get one — and our speakers reflect that. John Squires, for instance, is heading Next Issue Media, the joint venture of five major magazine publishers looking for a solution together, They want to create an electronic newsstand that gives each publisher control over its own pricing, customer relationships, etc., but solved the technological and marketing issues as a group.

Google News’ Josh Cohen is on the news panel so I expect we’ll hear a fair amount about why Google doesn’t think aggregation or search should be the bogey man. Most publishers want to use search literally as an engine for traffic to their sites so cutting it out completely isn’t an option but the “solutions” are all over the map. The FT’s Rob Grimshaw will talk about how they’re limiting full “first click” access from Google, while the New York Times has already said it won’t block in-bound links.

Q — Do you think content people will be able to successfully pull back on “free” content to bring about another revenue stream? This must be a constant source of your attention, so your view is pretty important (I think).

KRAMER: Thanks for thinking my view is important. I’ve been through this drill before. When I was at Inside.com, the site had an enormous amount of buzz from its free content, which was meant to fuel subscriptions. When we went behind the paywall, the buzz died down. If you can calibrate the launch of a new product with a blend, you have a chance at success.

As for “successfully”:– that may depend on your definition of success. If you’re trying to take back something people already get for free — like Newsday did late last year — be prepared to pay the consequences in lower traffic and possibly lower relevance. Newsday and parent Cablevision think they can win by creating a higher-value, more targeted local audience.

On the broadcast/cable side, because so much cable video is out there, most people don’t realize that more than 80 percent of full-length cable programming hasn’t been available free. When Hulu’s’ investors talk about subscriptions, they’re not looking at making everything on Hulu’s’ pay only. The focus will be on video that isn’t out there yet or is made available in different ways That has a better chance of succeeding. Disney’s Bob Iger has already said broadcast programming won’t be moved to pay only.

Q — Finally, like so many people who’ve been around this for awhile, I’m proud to know both of you and to have watched your business — and stature — grow. How have things changed for the PaidContent empire?

KRAMER: It’s been about 18 months since we were acquired by Guardian News & Media, which is the biggest change for the company. We have the resources of Guardian to draw on and share a CEO, Caroline Little, with Guardian North America and operate independently editorially. But our focus and that of paidContent and ContentNext remains the same: doing our best to keep up with this crazy space so we can help all of you keep up with it. We’ve come a long way from 2004 when I joined — with Rafat working from his home in California and me from St. Louis — to a full company with a nice (but not glam) office in New York and staff in Seattle, LA and London. One of the best parts is so many people like you have been on the journey with us.

We’ll be watching the conference closely and hope to report on it next week. Like last week’s conference with Gordon Borrell’s company, this one is being organized and planned by people who really know the space. And the exciting thing to me is that neither conference existed last year. It should be good.

(Originally published in this week’s AR&D Media 2.0 Intel Newsletter)

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