Last week, writer and consultant Mark McLaughlin had a great article in the Huffington Post about the current attempts of newspapers and others to get audiences to pay for on-line content. McLaughlin points out that audiences usually don’t pay for content, but rather for distribution. It is the advertisers who pay for content.
McLaughlin cites the old print newspaper delivery system as an example: newspaper readers didn’t pay for the content in the paper, but for having the paper delivered to their door every day regardless of whether they read a single article in it or not. Advertisers were the ones who subsidized the expense of gathering the news and writing it up in story form.
In broadcast TV, consumers paid for the TV and antenna, then got content free. In cable TV, they paid the cable company for cable service, but paid the same amount regardless of whether they watched one show, many, or none.
And now consumers pay their Internet Service Providers for access to the Internet, and then download as much free content as they like.
Consumers pay for electronic media without linking their investment directly to content. The idea that a consumer would challenge his cable bill because NBC dropped his favorite prime time show is incomprehensible.
Another example is Netflix, which sells a distribution service that costs the same amount per month whether one sends back DVDs right after watching them or keeps the same DVD for three months. McLaughlin also brings up the Kindle and similar devices as a way to get consumers to continue paying subscription fees for content, and points to what the iPod did for music.
McLaughlin suggests that content providers should look at new ways to tie content and distribution together in terms of finding a happy medium between charging piecemeal fees that customers will be reluctant to pay, and overcharging for delivering far more content than customers will ever actually use.
It is time to think about distribution and content holistically. Digital technologies are not the enemy, they are an enormous opportunity to improve the relevance of content to the individual consumer. Don’t think so small as micropayments for one article at a time and don’t take for granted the current ability to charge a big fee for massively over-delivering irrelevant content. Look in the middle.
He further suggests that, if ad revenues are dwindling in the transition from print to digital, media providers need to look at shrinking their overhead costs to match.
This is a great article, and I would hope the print journalism industry will read it and take it to heart. It seems to me that current paywalls are built on a foundation of optimism, with newspapers believing that customers will pay this amount because the papers believe themselves to be worth that.
What they ought to do is work out what customers are willing to pay, and figure out how they can provide that.