Thursday, September 15, 2011

DIGITAL NEWS: Paid Content Versus Free Content

To pay or not to pay…Is that really the question?  Ok, then I’ll have to go ahead and go with ‘not to pay.’  Got any more brain busters?  Seriously, I understand that print companies are seeing a steady decline in ad revenue and so have their backs against the wall.  It only makes sense that these companies find new, creative means for generating revenue, but I still find it interesting to see moves like this one where starts charging for their Globe content. 
I’m guessing everyone reading this post is like me and just naturally assumes that there’s not a reading, listening, watching, consuming soul out there that would dare spend a dime on digital content, especially online newspaper content, when there’s an overabundance of similar if not the same content out there for free.  I mean, right?  Well, upon further review, it appears this assumption is far from statistically accurate. 
I built the chart above based on stats from the 2011 Pew Internet & American Life Project.  I know what you’re thinking, but you’re wrong (I did not accidentally switch Adult Content and Digital Newspaper).  Ok, so I’m wrong about the general public.  There are plenty of people, unlike me, who are willing to purchase content. 
But, I still can’t say with confidence the Globe is making the right move by charging their customers.  Here are a couple thought-starters & observations about this effort and efforts like it.

Question:  How Will Paid Content Grow Globe's Business?
Ok, so let’s see why Globe and other properties are even considering a move toward paid content.  If you’re creating content, you can charge readers for that content and/or sell the content’s ad space to advertisers.  Either way, you need to grow your user base to achieve scale and maximize profits.  Again, to grow your business, you need to GROW your user base. 
It seems inevitable, especially once my generation takes over, that demand will continue shifting towards free digital content and so long-term strategy would suggest that these properties promote that aspect of their business with a limited ‘members-only’ strategy for paid content.  Assuming Globe employs basic game theory, thinking at least two or three plays ahead, they know they’ll eventually (like, in maybe year) need to stop charging consumers to maximize profits.  So, that leaves us with my next question.

Question:  What About Globe’s Avid Digital Readers?
Reader: I love you all’s articles, but it really sucks that I have to pay now.
Globe Exec: Ah yes, we’re testing the market for new revenue streams.
Reader:  You’re testing me?  What if you don’t make any money?
Globe Exec:  Right.  If we lose money and market share, it’ll be free again.
Reader:  Is there a ‘Suggestion Box’ here or should I just punch you in the face?

Thought:  Hey, Privacy Cry Babies…SHUT UP!
Ok, since I’m getting tired and don’t want to spend an hour writing about these dorks, can we just all agree that people who complain and complain about digital advertising and behavioral targeting are idiots?  Ok, good.  Thanks for playing. 
I just hope, I mean I really pray, that there is some privacy-concerned anti-advertising freak out there who went to his/her computer this morning to read their favorite Globe content only to find a screen asking for their credit card information.  I have a question and comment for those users:

·        Now do you see why we need advertising? 

·        Nothing is free, idiot!

That’s all for now. 

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