by Mike Masnick

Online Content Providers Recognize That Charging Is A Tough Business Model

from the took-'em-long-enough dept

Year after year after year, studies come out somehow claiming that the online market for content is booming. However, every year it needs to be pointed out that these studies are misleading at best -- as they miscount "services" such as dating sites as if they were the same thing as an online newspaper subscription. For a while, this was encouraging online publication to experiment with subscription models, even as it was becoming increasingly obvious that it was a very difficult competitive market unless you had something to really differentiate yourself. So, it's good to see a new study coming out of the UK that disproves the idea that more publications are charging for content. By breaking out just media sites, the study found that the number of publications that charge for content has dropped nearly in half over the past year. Instead, many of these publications are finding good results from advertising. The firms that are charging claim they're making money from it -- but often you have to weigh those claims against both the opportunity costs from fewer impressions to sell to advertisers and the future potential for lower readership as readers gravitate to free sources. This isn't to say that money can't be made in charging for content -- but that it becomes quite difficult in a competitive market (as the straight news market often is).

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    ZOMG CENSORED, Apr 5th, 2006 @ 4:56pm

    I run a free content site...

    ...A free art class, with free college level lessons (written by myself or another instructor). How to I sustain it? Charge for premium content (lessons assembled in books, video versions of lessons, etc.) Getting the same free stuff in another format. It allows the content to remain essentially free, while giving better stuff a small fee to support upkeep. I personally think it's worked out for the best.

    reply to this | link to this | view in thread ]

  2. identicon
    Ryan, Apr 5th, 2006 @ 5:32pm

    I agree

    I've seen many 'open source' projects where a product is made, and distributed freely open source. Then, there are books written to help use it, or cds or dvds burned of the product that are sold at a price to support the group, and it seems to work wonderfully. The books are made available online, but partially out of convenience and partially wanting to help keep a good resource like yours, or other open source projects going, people buy the books.

    reply to this | link to this | view in thread ]

  3. identicon
    Mark, Apr 5th, 2006 @ 7:28pm

    RE: I run a free content site...

    Yeah, a free art class site... but what about turning a profit. You say that they're willing to get premium content for a small fee. What you get in return is the upkeep of the site. However, if you're a newspaper I'm pretty sure you aren't just having 30 reporters, editors, etc. just for the upkeep... you want to turn a profit for the content you generate. Making a profit for how much you invest is incredibly hard on the internet. Ads? People avoid most of them like the plague. When someone advertises to you on Google and its in your search isn't your search more relevant? And not a paid ad? That's how google works.

    reply to this | link to this | view in thread ]

  4. identicon
    Daryl Meissner, Apr 5th, 2006 @ 9:11pm

    Charging for Content

    I assume we are not counting pornography content which has continued to make money charging for content since very early on in the internet era.

    reply to this | link to this | view in thread ]

  5. identicon
    Daniel.son, Apr 6th, 2006 @ 1:04am

    I try not to pay for things on the web...

    ...especially online content. Not to say that I am a pirate (not to say that I am not). What I mean is that I only subscribe to free services online and I use mainly free software.

    Btw... I read somewhere that google is getting into the online dating scene. Another free service to kill off the dying pay services, I suspect.

    reply to this | link to this | view in thread ]

  6. identicon
    Anonymous Coward, Apr 6th, 2006 @ 5:58am

    Nothing more than capatlism at work

    Isn't this the way our captalistic economy is suppossed to work? The value of a newspaper was fouded on the idea that they could deliver a service that someone could not easily get elsewhere. The internet has changed that by making news information easily accessible worldwide. The same holds true for virtually all business models that are founded on taking free content and creating value through distribution.

    Porn is an excellent example of how monetization via the web will thrive because the content in and of itself is deemed valuable. Please no slamming me on whetehr you think porn is rightor valuable since the stastics show this is a service many people will pay for. Sports, TV shows, movies, music are all other examples of valuable content that cant be had for free.

    Honestly I am not really sure why this shocks anyone since it is a fundamental tenant of the world we live in.

    reply to this | link to this | view in thread ]

  7. identicon
    Thomason, Apr 6th, 2006 @ 6:51am

    Pay for free - no.

    A really hard model to sell! If I go to the Financial Times site, they have a lot of "subscription" stories, as does the WSJ & NYT. So, I just copy the headline, paste it in a news search engine, and voila, I get the story for free elsewhere.
    Why then, would I have any reason to subscribe to or pay to see those other sites????

    reply to this | link to this | view in thread ]

  8. identicon
    Anonymous Coward, Apr 6th, 2006 @ 8:29am

    RE: Nothing more than capatlism

    This guy is absolutely right! You cannot charge for distribution of content anymore since distribution is essentially free with the Internet. Therefore, distribution channels no longer provide any added value, and industry only pays for value added.

    Only content generation and advertisement have any value. To clarify, the RIAA does not generate content. It merely is a distribution channel, and as such adds to value to the music industry. Newspapers are similiar since they all report the exact same associated press stories and talking points.

    reply to this | link to this | view in thread ]

  9. identicon
    anonymous coward, Apr 6th, 2006 @ 1:17pm

    How inciteful!

    In other inciteful news, salespeople say that actual selling is toughest part of their job while small business owners say that making enough money to show a small profit is a huge challenge to business survival. In other breaking news, water is still wet!

    reply to this | link to this | view in thread ]

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