They are out to steal your wallet. They, of course, being web companies who have yet to figure out a way to generate profits, or monetization. After years of running a zero sum game (and profits), companies from Google to News Corporation are no longer able or willing to support unsustainable, unprofitable business models. The answer to their woes is to launch the Great Experiment that will ultimately determine how we consume information from the Internet. The recent efforts are Great Experiment because all of the companies involved are unsure if any of the trials will work. We, as consumers of media, have been conditioned to expect web content for free. Hell, we nearly demand it.
After a decade of releasing content for free over the web, media outlets from newspapers to YouTube are reversing their business models. To this date none have completely abandoned the business of free but are, instead, pushing for a freemium model where some content is free and premium content costs.
This week is a discussion on the why, the how, and the will it work in generating revenues for the online media outlets?
Use the links below to understand the business of free and how it can even be applied to the printing industry.
Free Generation | Then & Now |What’s Your Model | How’s That Free | Psyched Out
Newspapers
Traditional news media outlets, especially newspapers, need to find a quick solution from the experiments. For years all newspapers have offered up-to-the-minute news and custom content, like editorials and exposes, through there websites at the same time as their print editions. The newspapers freely distributed this content for several reasons, but mainly due to the gold rush nature of the early Internet and the healthy revenue streams of the print editions.
During the gold rush era, media companies wanted to quickly stake their claims as the online news outlet to build a massive online following. If you build it they will come, and once they come we will figure out a way to make money. Of course, the later part has never quite panned out due to the distributed and instantaneous nature of the Web. Fast forward a decade and the situation has turned dire because the old revenue streams dried up. Advertising budgets have moved toward digital distribution and Craigslists killed the classifieds, yet all of the costs of manufacturing and distribution of a printed paper remain relatively unchanged.
The New York Times recently announced intent to launch one of the first pay-for services for accessing their online content. Although not technically the first to charge for content the Times, with an online monthly readership of 17+ million, represents the largest to try. All of the details are yet to be determined, but visitors will be able to read a certain amount of articles for free before paying and the plan will not be implemented until 2011.
The Times is probably a harbinger of paid for news content to come as the news media tries to bolster revenues, but will the public be willing to pay for what has been free? Probably not if the informal poll conducted by Mashable turns out to be true which shows 63% are not willing to pay for news. These results should not be surprising considering the organic, ubiquitous nature of the Web where the same news is found but another click away. Mix in citizen journalism for breaking news that has flourished through blogs and Twitter, and most will find it unnecessary to pay for their news no matter what the cost.
The New York Times, Boston Globe, Washington Post, and other papers, have a need and right to pursue profits. However, the pay for content model is not likely to produce the profits sought unless their is a complete media blackout of free content on the Web.
If you ran a newspaper, where would you look for profits?
