Content already is free

Oh, I’m so tired of the ages-old argument that we are all thieves because we don’t pay for content.

My friend Mark Potts trots out the meme once more. The standard arguments are there:

Why would publishers give something away online that they charge for in print? Why leave money on the table?

And…

In fact, several publishers are doing very well charging for content on the Web, even as the majority of their brethren avoid it like the plague. Exhibit A: The Wall Street Journal. . .

And…

But that quality content is expensive to create, folks. You should be paying for it, even if you don’t want to. That’s just not a good enough reason. There’s no constitutional right to freeload. The First Amendment guarantees a free press–not a “free” press.

This argument makes it seem as if it’s our fault that we’re not paying. Shame on us. Well, I don’t buy it. For neither is there a constitutional right to avoid the essential economics of media and change. The arguments not given in this plea:

First, this is a post-scarcity media economy. Most news is a commodity. And that which isn’t faces no end of competition. OK, so I can get the Wall Street Journal only because I pay. And, yes, it’s good. But there is plenty of other media coverage of business out there, covering mostly the same news. And I don’t have an expense account anymore. So I’ll find plenty that is good enough. If your content is not free, you have to compete with free, and that’s damned hard. Ask every classified manager who’s competing with Craig’s List.

Second, charging consumers cannot come without marketing. Subscriber acquisition costs are high; just ask any magazine publisher (or AOL, for that matter). In the back-of-the-envelope calculations on the value of the very limited number of paid services, I never see lines for acquisition costs and churn.

In addition, the value in media is — and always has been — the relationship, not the sale of the physical product (the manufacture of which also brings considerable cost not included in these envelope-calculations). If you cut off that relationship, you diminish your value — just ask those Times columnists trapped behind their wall — and cede that value to your many new competitors. Indeed, if you are really smart, you’ll realize that our “consumption” of that “free” “content” — our remixing and tagging and linking and recommending and correcting and behavioral-data-making — adds value. But you have to be quick enough to capture it.

Who cares whether content wants to be free? It already is. Deal with it.

: Mark comments and emails and says I’m being unfair; he’s not criticizing readers, he says, but publishers, for leaving money on the table. We still do disagree about that. I criticize publishers for still whining about circ revenue and not figuring out the ways to go with the flow and find their cash flow in new ways.

  • http://scripting.com/ Dave Winer

    Jeff when I started writing DaveNet in 1994, people wer ealways speculating on when I’d start charging for it and how much it would be. They thought I was building an audience before foreclosing, and csahing out.

    This forced me to think about whether I wanted money and if not, why not.

    Of course I didn’t — because that’s not why I was writing. I wanted to influence people’s thinking, if possible bring them around to my way of looking at things, and if that’s not possible, to at least serve as a catalyst for thought.

    Given that was my motive, charging money would get in the way of accomplishing my goal.

    Your freind is wrong to think that it costs money to create writing. I’m not spending any money writing this, and none of the other writing I’ve done cost money. People accept these things w/o even thinking. That’s the problem! (And the answer to the question of why we’re fighting an ill-conceived war in Iraq now, that no one seems to have supported when we were getting into it.)

  • http://www.recoveringjournalist.com Mark

    Jeff: You characterize my post quite unfairly. I’m not calling anybody a thief—I like free content just as much as the next guy. What I’m criticizing is media companies who whine that they can’t make enough money online—without ever trying to charge for content. As I said, they’re leaving money on the table. As with so many things involving media companies, it’s just lousy business thinking.

  • Mary Specht

    Jeff, I would agree with Mark that you’re mis-characterizing the post. No one would shame people for taking advantage of free content–that would be silly.

    While I’m not as hot on the subscription model as Mark, I think his call for experimentation resonates.

  • http://www.phillyfuture.org Karl

    Dave, you’re being unfair. Think about it – to write something takes time. Time spent – for those of us that are not millionaires – without earning income – well… is time not earning income.

    Something the rest of us folks need to umm…. live.

    It definitely costs money to do investigative, in-depth journalism (time spent, legal protections, marketing resources, etc), and since no one has come up with any sure fire business models that work – Mark is doing the right thing by questioning conventional wisdom.

    No one has any answers and the search for business models – past advertising related models – has yet to really begin.

  • http://www.thepomoblog.com Terry Heaton

    The Wall Street Journal illustration is not valid for this or any argument about paying for online content, because the paper’s subscribers (and online subscribers) are people with expense accounts. Business pays for the paper, not individuals. Hence, this argument belongs in the fish tin with the other red herrings.

  • Mary Specht

    Terry, Mark addresses that directly, if you read his post. From the post:

    “Yeah, I hear your arguments—as did Spears in Spears and Daggers four years ago: The Journal is a unique publication, because its subscriptions generally are paid for by businesses and/or are tax-deductible as business expenses. Leaving aside the fact that WSJ.com is one of the best newspaper Web sites (I gladly pay $99 a year for my subscription), that argument crumbles in the face of several successful consumer-oriented subscription sites, such as consumerreports.com, Zagat.com and ESPN.com’s premium service, Insider. Not to mention a hardy group of smaller newspapers around the country that have put their Web sites behind subscription walls.”

  • http://www.VenturesWithoutCapital.com Bruce Judson

    Jeff:

    I agree. There’s no point in media companies, or media professionals, yearning for the good old days. They are gone. The technology industry is used to rapid change, now the media industry must deal with the same dynamics. We have no choice. As you said, deal with it!

    There’s no question in my mind that over the next few years (or less given the pace of change) we will see some clear winners and losers. About a year ago, you wrote about how HarperCollins, in a first ever test, put my front list book online for free, Go It Alone! with ad support, at the same time the paperback was offered for sale in book stores. What I really admired about this project was both HarperCollins experimental attitude and the company’s ability to move quickly. Both attributes are critical in the evolving media age.

    As an author, I also wanted to learn about the dynamics of pure content online. One result is that I am in a soft launch of a new blog Ventures Without Capital. It was was developed as a direct response to people who read Go It Alone online and contacted me with requests for specific types of timely information. And, Ventures Without Capital has a clear business model. So, if I, as a book author, had never taken some risk and participated in an experiment, I would never have moved forward.

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  • peter

    If the self-important media types think what they wrote or report are so valuable, why don’t they go on a collective strike and refuse us of these great works of theirs and see if the world will even yawn? Secondly, I don’t ever remember paying for terrestrial TV and radio. Have I been stealing “free” TV and radio all my life? How did all these stations and networks survive, even today? Yet, I pay to go to the movie theaters and buy or rent DVDs. So are movies being paid for by company expense accounts? Economics 101, folks. Btw, I pay for my own WSJ online subscription while “stealing” contents from thestreet.com and stockpickr.com. But I don’t hear any complaints from them. In fact, I think they welcome my grand larceny. I have their emails welcoming me and confirming my registration as proof. Strange.

  • http://www.paradox1x.org Karl

    A great article to share. Some papers are figuring out paths to profitability:
    http://www.iht.com/articles/2007/02/18/business/papers.php

    While portals like Yahoo and search engines like Google dominate most markets, Schibsted was able to build http://www.vg.no into the most popular site in Norway, attracting more than two million unique visitors a week. Four other Schibsted-owned sites are in the top 20, and the company has a comparable presence in the Swedish Web rankings.

    By dominating so much traffic within each market, Schibsted has managed to avoid one of the biggest problems plaguing print publications elsewhere: Because many visitors to newspaper Web sites arrive there simply by following links from search engines, they depart as quickly as they arrive. So advertisers choose instead to spend their money with Google, where consumer eyeballs linger.

    The growth of the company’s Web sites shows the benefits of bringing visitors in through the front door and then keeping them in the Schibsted house. At vg.no, occupying the prime banner advertising space for 24 hours costs an advertiser 210,000 kroner, or $34,000 — more than a full-page, full-color ad in the paper — and the next available slot is in June, Aamot said.

    Schibsted even started a Norwegian search engine, Sesam, in competition with Google.

    The strong position of VG and Aftenposten, another site in the Norwegian Top 10, has helped Schibsted build up new Internet brands like E24, which has Norwegian and Swedish sites. A link from Aftenposten or VG, with which E24 shares some resources, immediately brings thousands of readers, said Hans Christian Vadseth, publisher of the Norwegian E24.

    Though the Norwegian E24 was started less than a year ago, it already attracts more than 450,000 unique visitors a week, far more than the Web sites of the country’s two established financial newspapers, Finansavisen and Dagens Naeringsliv, he added.

    “Until this experience, we probably didn’t understand the enormous potential if you control traffic machines,” Aamot said.

  • http://www.subhub.com Evan Rudowski

    Jeff,

    There is money to be made charging for content — especially niche content that is unique and of real (or perceived) value to its target audience. We’ve built SubHub on that premise and we see proof of it in the performance of some of our clients. For example, there are many many people who are happy to pay £79 per year for the observations and tasting notes of one of our clients, the leading wine expert Jancis Robinson.

    Jancis, interestingly, is a featured columnist in the weekend Financial Times, yet a subscription to her website costs the same as a subscription to the entire FT online. That’s because, as you point out, business information is largely a commodity, whereas the wine tasting notes and observations of someone like Jancis are rare and hard to come by — and are recognised as such by the many wine lovers, wine merchants and wine makers who have no problem parting with what is essentially the cost of a case of good wine for an annual subscription to Jancis’ site.

    So the key to charging for content is to have content that is actually worth something to a small but well-defined niche.

    This is not a mass media model so it may not be appealing to some. Revenues can be in the four, five or six figures. However, the cost of production for someone like Jancis is so low on the internet (sadly for us, our fees to Jancis are only a fraction of her revenues from the site), that it is a very viable model for an individual content producer.

    Not all content lends itself to subscription. Subscription content needs to be unique, highly targeted and regularly updated. It helps if the content creator already has a brand or reputation in his or her niche. It also helps to have a mailing list or some regular marketing access to the target audience. Jancis, as an example, has all of this.

    For those who do not, some of these assets can be back-filled or supplemented (for example, digital marketing can help to cost-effectively build a brand and an audience). Some (perhaps the majority of) content lends itself more to an advertising or transactional model than to a subscription model — and so, after focusing first on subscriptions only, we’ve begun to build those other models into our platform, so our clients can have a range of revenue options.

    It isn’t necessarily an either/or model — free or paid — but some combination of both. Even a subscription website should give away lots of content for free and on a regular basis in order to attract and retain an audience. Over time, as the site establishes its quality and relevance, people will subscribe if they feel there’s value for them.

    Best wishes,
    Evan Rudowski

  • http://www.paradox1x.org Karl

    Yep. Here is a great example – the Freemium model:

    http://avc.blogs.com/a_vc/2006/03/my_favorite_bus.html

    What folks need to keep in mind is that the concept of ‘content’ or the services that newspapers traditionally provided their communities doesn’t exactly equate to text publishing, and nor should it.

  • http://scripting.com/ Dave Winer

    Karl, I don’t get it. Are you saying that you are making money every minute of every day? You never write anything without the idea of making money from doing the writing? I don’t believe it. So why is it surprising to you that someone else might spend time not making money. And the bit about being a millionaire is unfair. When I was broke I spent a bunch of my time not making money (actually a lot of it, that’s why I was so broke).

  • http://scripting.com/ Dave Winer

    Continuing the question — how much money did you make writing the comments in this thread?

    If you weren’t being paid (and I assume you weren’t) why were you writing them?

  • http://editor.blogspot.com Howard Weaver

    It costs more to produce and distribute a newspaper than newspaper companies receive in subscription fees.
    That’s being paid for content?

    It’s always been about doing work that builds an audience and then selling access to folks who want to reach them.

    How is this changing?

  • http://www.subhub.com Evan Rudowski

    Howard,

    It’s changing because, on the internet, the production and distribution costs are now negligible. Offline, they remain considerable. So without those costs, it is possible to sell content profitably online via subscription.

    Since the costs of production and distribution are now so low, it also means that content creators can disintermediate the old distributors and market their content to their audiences directly. The power of the press is for those who can afford it — well now almost anyone can afford it.

    Not all content lends itself to being sold via subscription, but when it’s appropriate it can now be sold profitably and directly by the content creator.

    This may never work for big media companies who are merely the aggregators and distributors of content created by others (including staff talent). In order to maintain profitability, the big media players must sell content in mass quantities (and produce it for the mass audience, the lowest common denominator). In those cases it may indeed be more effective to give away the content and sell access to the audience.

    But with audiences fragmenting, this may be easier said than done. There will be a lot of wreckage on the side of the road. The smaller, more nimble, more niche players will be better able to prosper. How long will the content creators settle for aggregation by others when they know they can deliver it directly themselves?

    Best wishes,
    Evan Rudowski

  • http://www.paradox1x.org Karl

    Dave, you’ve made good points with your questions.

    Of course I’m not making any money participating in this conversation, and the millionaire comment is unfair.

    However, too many blow over the fact that acts of journalism are more than just acts of writing.

    Acts of journalism are acts of research, information aggregation, information sharing, and information marketing. And are only successful if the the product of that work or passion is actually is communicated – successfully – to the audience it is intended it to reach. Otherwise it’s pissing in the wind.

    That requires money.

  • http://mediavidea.blogspot.com Pramit

    MediaVidea has a related post, titled “The Future of news publishing”
    http://mediavidea.blogspot.com/2007/02/future-of-news-publishing-opinion.html

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  • Steve Davis

    Content that is supposed to be free should be free. And people who enjoy that content should do it freely without guilt. And the media world has changed fundamentally so that there are a variety of new channels and audiences for the expoitation of content, and for access to news and other information. What hasn’t changed is that working artists still need to make a living, and there are many, many of them — freelance writers, photographers, musicians — who aren’t part of big media companies, have families and need to make a living, and who do valuable journalistic or creative work as their vocation — and should have to right to both control and be compensated for their contributions — if they want their content not to be free. And much professional content is not free, nor should it be.

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