Paying For Content ... Has It Been Free For Too Long? - Steve Yanovsky

I recently read an article about the trend to make consumers pay for the content that they used to get for free on-line. The New York Times started doing that with a modified pay wall a few weeks ago. They will allow us a certain number of "free" articles a month and then they have us pay. Being the "paper of record", many of us are used to reading it every day, and will miss access to it on-line unless we pay up. So, they are betting that we will.

The vast majority of web sites are still free and we can access them whenever we choose to. We can read the same news covered in The Times, but not written by the same people with the same point of view. Point of Difference will be key to the success of on-line subscriptions. Because there are a myriad of choices on the web, that we don't have to pay for, we will only pay for those sites that have a strong personality; one that we like and probably agree with.

TheDaily, Rupert Murdoch's latest product introduction, does have a point of difference. Brought to us by the same company that owns the Fox News Channel, which has a distinct personality, there will no doubt be many people eager to pay to read theDaily on their iPads. The Daily potential audience needs to get used to paying for an on-line version of what is available elsewhere. As with all new ideas, changing behavior takes time, but eventually, if consumers see a value in what is being offered, they will do so. Electronic banking took a long time to take hold, as did hybrid cars. Now they can't make the cars fast enough.

Paid content in digital is not going away. It will become more pervasive in the next few years as publications look to generate the lost income from the reduction of off-line subscriptions. They will be forced to charge for pay walls altogether, or for specific content that they deem as premium. One hiccup in all that will be double charging their off-line subscribers. If someone is already paying for their favorite magazine, or newspaper, off-line, will they expect to get access on-line for free? Or, at a deep discount? It appears that the publications have not addressed that expectation in their model. The current model says you pay for the hard copy and then you pay again for on-line access. I don't think that the consumer is going to accept that.

I recognize that basic cable networks generate income from two revenue sources, subscription fees and advertising. It was only a matter of time before publications translated their off-line dual income streams to the on-line world, but how fast the adoption is, and how much it will cost remains to be seen

Steve Yanovsky is a senior partner at Brand Strategies LLC, a marketing and branding consultancy focused on media and entertainment companies. Steve can be contacted atsyanovsky@brandstrategiesllc.com

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