Will paid content work?

This iPhone app is truly for the birds
Three technologies I’m hoping mature this year.

But can we learn anything from paid content attempts in the past? After all, this has been tried at varying levels before. Until The New York Times opens the books on its mothballed Times Select service, which kept certain content — mainly columnists and archives — behind the pay wall, these two examples, from 2003-2005, will have to serve as examples

via Will paid content work? Two cautionary tales from 2004 » Nieman Journalism Lab » Pushing to the Future of Journalism.

Here’s one more. A long, long time ago in a Galaxy far away, one of my first jobs in Silicon Valley was with a startup (see footnote 1) doing interactive services for cable TV. We’re talking almost 30 freaking years ago, folks, and teletext-type technology, which was state of the art then. And the goal of all of this was — ta da — value added services. Online banking, news tickers, weather, etc etc. And of course cable companies wanted customers to pay for them.

But every pilot test failed miserably. 100,000 people in Ohio were given the services free for six months, and surveys showed very positive responses to it. They liked what they saw. And when they were asked to pay even a nominal fee for it (a couple of bucks a month), about 2% signed up for it.

Nothing new under the sun.

This long predates the “consumers have gotten used to things being free on the net” problem. Hell, for the most part, it predates the net (at the time, I think it’d just been renamed the Internet from Arpanet, but USENET was still modem-based.

Thinking about it, the reasons for this problem go deeper than “we expect it for free”.

One is that both television and radio have made people think this stuff is free. Yes, there are commercials — advertising subsidizing the cost so the consumer doesn’t have to pay anything. That’s likely one of the strongest reasons there’s resistance to paying for things, a multi-decade history of things being “free”.

And with cable? well, consumers are already paying for cable. Any surprise people resist paying for things that come on the thing they’re already paying for?

Advertising long subsidized the true cost of that newspaper or magazine, making them artificially cheaper to the end consumer.

Circle those ideas back to to the internet today — and people pay for their internet connection, so are we surprised they resist paying for stuff they get off of what they already pay for? Those of us on the distribution side of the equation understand the details of how this all works, but should we be surprised that the consumer only sees it as a double-dip? And we’ve seen this resistance to this pay-again mentality going back decades. Look at the resistance we see today to the airline’s tacking on fees for things like checking bags. Consumers see this stuff as bait and switch (and in some cases, I’m not sure they’re wrong). Perhaps one problem we’ve had here is we’ve done a bad job of teacing the general consumer how all this works and why the ISP charges don’t pay for things.

But the bigger issue is that issue of “free”; and that goes back to the early days of commercial radio. 80 years, mulitple generations of “this is free”. It’s really not — the cost is watching/listening_to commercials as part of the programming. And now advertising isn’t paying the freight, we’re trying to shift the burden on the consumer after decades of subsidizing content (long before the internet!) — and the consumer resists it.

Surprise.

Just a thought: I’ll bet, and I have no data to back this up — that if you do a study of people who primarily watch network television and compare that to people who contribute to PBS or NPR, that the PBS/NPR crowd is a lot less resistant to paying for content online, because they’ve already made the decision to pay for content rather than sit back and take what the advertisers are willing to pay for and have them watch “for free”. And amybe down that road lies some answers, not in technology or micropayments or nag walls or whatever, but in working to educate users why what they (and their parents, and grandparents) were used to: free content, with commercials they used to go to the bathroom during…

(footnote 1: the startup was founded by Paul Baran, one of the people who invented packet switching networks. Which is the underpinning allowing you to read what I’m typing. It didn’t make it — but in the back room was another startup called Telebit, which invented the first modems that did data compression and error correction, and which ended up playing a key part in the growth and success of USENET and Email back in the days before everyone was hooked up to the net, and basically allowed for the growth to critical mass that eventually made the internet mainstream. This just reinforces my view that Silicon Valley is really just six people, but they all moonlight….)

This entry was posted in The Internet.
  • John Baxter

    Not only did USENET mean modem in the electronic Pleistocene you discuss, but USENET content traveled to and from Australia on reel-to-reel tape aboard ships. Which led to the elaborate quoting rituals that so confused the new breed of USENET users accessing via commercial ISPs.

  • John Baxter

    Not only did USENET mean modem in the electronic Pleistocene you discuss, but USENET content traveled to and from Australia on reel-to-reel tape aboard ships. Which led to the elaborate quoting rituals that so confused the new breed of USENET users accessing via commercial ISPs.