Paid content: Love it or hate it, we’ll have it

This has been called The Perfect Storm, as in the confluence of three weather systems that caused historic disaster:

1. The dot.com meltdown, which eliminated all that cash for Internet startups;
2. The recession, which has hammered media advertising revenues and dimmed owners’ enthusiasm for anything that isn’t making money;
3. The 9/11 terrorist attacks, which have made it hard to focus on any longer-term plans.

Well, when this storm is over, there will be less competition for those of us fishing with a different ‘net. This is the time for bold moves toward getting paid for content on the Web.

We’ve now proven that ‘everything free for everybody’ isn’t a sustainable business model. And just as newspapers depend upon a mix of advertising and subscription revenue, Web sites are moving in the same direction.

• Item: Some 12% of Internet users have lost a favorite Web site, and 17% have been asked to pay for something that used to be free online, according to the Pew Internet & American Life Project. And about 2.2 million Americans have begun paying for content that they used to access for free. www.pewInternet.org.
• Item: Leading Dutch publisher PCM has announced the consolidation or closing of most of its Web sites. Previously, each of its print publications, including four major national titles, maintained a news site. The company has declared that any Internet site will have to pay its own way -- so for now, PCM will only finance teletext-type Internet editions of the newspapers www.europemedia.net.
• Item: As reported by the Wall Street Journal Nov. 1, Jupiter Media Metrix forecasts the market for paid content will grow to nearly $5.7 billion by 2005, from $1.1 billion in 2001. The WSJ piece lists sites offering a mix of free and premium content, ranging from Audible.com and Billboard.com to Britannica.com and Economist.com. Sites going the subscription-only route range from WSJ itself to The Gazette of Cedar Rapids, Iowa (Gazetteonline.com), which charges $60 per year – but is free to newspaper customers. http://interactive.wsj.com/fr/emailthis/retrieve.cgi?id=SB1001972562136825120.djm

The Journal article points out, however, that none of the top 10 news sites, including MSNBC, CNN and NYTimes, charges for its core Web site. Is it possible that they’re all waiting for each other to go first? And is it a breakthrough that Yahoo! plans to charge users for its astrology service?

The Times of London last summer began charging 10 pounds for access to a printable version of its famous crossword (and confirmed this would be the first of many paid-for sections). This set the stage for the Sun, Telegraph and Guardian to quickly start charging for their crosswords as well. The New York Times has 35,000 customers paying $20 a year for access to crosswords.

Media properties are looking well beyond crosswords for ways to generate revenue from users. Britain’s Telegraph in Y2000 had 75,000 users playing its Fantasy Football game for free; this year it introduced fees of 5 to10 pounds (depending on level of features) and now has 35,000 paying customers. The Irish Times charges $30 a year for users who covet a distinctive e-mail address ending in @Ireland.com.

Canada’s Bell Globemedia offers a free financial site at Globeinvestor.com – and a premium, subscription-based version called GlobeinvestorGold. [Disclosure: The author is a consultant for Bell Globemedia]. BGM’s sports site, TSN, similarly has a level of free content, and the enhanced subscription-only TSNMax. And its employment site, Workopolis.com, will generate US$10 million in revenue this year, a majority of that from selling employers e-recruitment tools.

Famously, Salon.com offers premium content at $30 a year. Only 23,000 of Salon’s 4.5 million monthly users pay up – but represent 35% of the netzine’s revenue.

The ‘holy grail’ of paid content continues to be a working micro-payment model. While it’s more commercial than editorial, Germany’s AutoScout24 is generating DM50,000 per month by charging DM5 per photo placement in its auto classifieds, using the micro-payment services of Firstgate.

Many of these initiatives were discussed Nov. 6-9 in Zurich at Norbert Specker’s Content Summit, where a reduced but eager audience reflected the online publishing community’s somewhat desperate search for a profit model. (You can read summaries and view presentations from Zurich at: www.contentsummit.com)

Will we be able to build a business out of charging our users? Evan Williams says we’ll have to. He maintains a Web log following this topic at www.theendoffree.com. Williams is CEO of Pyra – creator of Blogger, a software application that started as a free service…but applies fees for more advanced features.

For now, at least, you can check his Web log free of charge.

Links
Pew Internet & American Life Project
EuropeMedia.net
Salon.com
The Wall Street Journal: "Make 'Em Pay!"
Norbert Specker’s Content Summit
Evan Williams' Web log