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BREAKING NEWS & VIEWS

Will They Ever Pay? Sorry, Probably Not
Friday, June 4, 2010
Steve Smith

If a single question has distracted publishers more than any other in the past year it is the hackneyed query, 'Will users pay for content online?’ For reasons that are beyond us, the issue exploded yesterday in a flurry of columns and analyst postings on this very theme. Sorry, no resolution. This is a debate that won’t be settled unless and until the many models that so many publishers promise to launch actually make it out of the gate and succeed or fail. But there is no dearth of speculation. Legendary digital ad pioneer Dave Morgan weighed in from his Online Spin column at Mediapost. Morgan, the CEO of Simulmedia and past founder of both Tacoda and Real Media ad companies, says that most of the major media plans to monetize content directly from the consumer are doomed to failure. “Changing consumer behavior is hard,” Morgan argues. No matter what consumers say they will pay for in a focus group, don’t count on them following through when it comes time to pull out the wallet. Moreover, he says, subscription models take a long time to build and require direct marketing chops that some players like TV broadcasters just don’t have. But perhaps Morgan’s most interesting angle involves the limited budgets of consumers themselves. “There just might not be enough room in consumers’ budgets for most of these new fees,” he says.

In fact, most consumers actually are paying much more than they once did for content, argues Forrester analyst James McQuivey at his blog. Consumers consider their high-speed access fees and subscriptions to Netflix part of a growing media budget. What people will pay for is access to content, not necessarily the data itself. He is recommending that publishers leverage all of the many devices now at their disposal to create access-like services for readers. “Today, that might mean developing a beautiful iPad app for a magazine, but tomorrow that means developing a new content experience altogether, with personal clippings, recommended stories, all of it socially enhanced to reflect not just what I what to read but what my community is reading and discussing,” he says. “That is a type of access, too, and it's one that goes beyond what Google can return as a search result.

McQuivey goes on further in a video Forrester released yesterday.

And finally, rounding out the analysts tossing water on publishers’ favorite hot prospect, Chuck Richard, vp and lead analyst, Outsell argues in a brief yesterday that most publishers are running for the paid model before giving digital advertising a real effort. “With a few exceptions, most ad-supported information companies are like babies just learning to crawl when it comes to rigorously and pervasively applying analytics to get fair value for their marketing and advertising revenue,” Richard says. Few publishers made proper use of analytics tools to leverage their audience with advertisers, he claims. “The necessary commitment, staffing and deep integration of analytics into all facets of content, advertising and marketing services promises significant upside on the revenue side of the ledger, in addition to whatever successes paywall models generate.”

If you have breaking news to share please contact Steve Smith at ssmith@accessintel.com

COMMENTS

There's only one way to settle this, and that's by implementing an easy-to-use solution... one that offers the user a choice of many ways to pay - including cash and non-cash alternative options. See the model at http://www.paycheckr.com.

Posted by Allan Hoving on Saturday, June 5, 2010 @ 07:42 AM

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