The title of this post is a little homage to paidcontent.org, the wonderful chronicle of the digital media business that started life four-plus years ago as an advocate of subscription-based media Web sites. At the time, paidcontent published several excellent essays by a consultant named Robert Spears, under the title Spears and Daggers, pointedly asking why Web publishers were so loath to charge for their content.
That’s still a very good question, because the situation really hasn’t changed very much. Top-notch Web media content remains largely free, even though Spears, in provocative essays such as “The Seven Deadly Sins of Free Content” (which is sadly gone from paidcontent’s archives) did an excellent job of lampooning the tendency for content to be offered for free.
The heresy of paid content is a mystery to me. Why would publishers give something away online that they charge for in print? Why leave money on the table?
Free content had its origins in the mid-90s, when publishers first moved to the Web. “Information wants to be free,” went the mantra. Yeah, well, my car wants to be free, and so does my dinner, but I still have to pay for them.
In following this foolhardy notion, publishers managed to do to themselves what Napster did to record companies: condition the audience to getting everything for free. That effectively established that expensive-to-produce Web content had no value because it was offered at no price. And so, with some notable exceptions, it continues to this day.
Yes, I know the arguments: If content isn’t free, then it doesn’t receive enough visits and page views to sell advertising against. Hogwash. Just as in print, subscriptions can work in concert with advertising to provide revenue. Web publishers complain all the time that online advertising doesn’t pay the bills. Then why not seek out additional forms of revenue—like, oh, say, subscriptions?
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, whose wsj.com site has more than 800,000 paying customers (that makes it larger, in terms of paid circulation than all but FOUR of the printed newspapers in America. At an average price of around $75 per subscription (depending on whether the customer also subscribes to the printed Journal), that means that Dow Jones is taking in something like $60 million a year on WSJ.com before it sells a single ad. Not too shabby. And craftily, the Journal has convinced the Audit Bureaus of Circulation to count its paying online accounts alongside its paying print subscribers, instantly adding several hundred thousand subscribers to its overall circulation. Nifty.
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.
And then there’s The New York Times’ much-vilified TimesSelect. For $49 a year—free if you’re a subscriber to the print newspaper—the Times makes its columnists and some other features available, as well as free access to its archives. One might quibble with putting the columnists (rather than something else) behind the pay wall in an era of blogging, but the Times hasn’t backed away from its plan, and TimesSelect now counts more than 600,000 subscribers, 200,000 of which are online-only. That’s $10 million a year in revenue that didn’t exist 18 months ago.
TimesSelect is by far the highest-profile effort by a Web publisher to switch from a free model to one that at least partially depends on paid subscriptions, and it's been roundly criticized by people who somehow don't think they should have to pay for the Times' excellent content. 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.
Not every print publication should be charging for its Web site, and I’d argue that there are very few that can successfully put the bulk of their online offering behind a subscription. But I’m shocked that there hasn’t been more experimentation with focused paid models, a la TimesSelect. One notable failure was the Los Angeles Times’ attempt a few years ago to put its online Calendar section behind a pay wall. That was just a bad idea, because the entertainment listings and content in Calendar just weren’t unique enough to warrant asking people to pay for them online. You can’t charge for commodity content. That makes no sense.
Rather, media Web sites should take a hard look at what’s unique about their content and think about ways to charge for access for it. An interesting potential example is my old company, Washingtonpost.com, whose leadership is absolutely adamant about not charging for online content. (Indeed, privately they believe that position gives them a competitive advantage over the likes of TimesSelect.) But Post.com provides some amazing features, such as its discussions, multimedia galleries and blogs, that aren’t available anywhere else and might be the core of a premium subscription service.
Or look at it another way: Fully 90 percent of Washingtonpost.com’s traffic comes from outside the Washington area (yes, you read that right, 90 percent). Yet aside from some syndication, there is virtually no other way to get access to Washington Post content outside of a 50-mile-or-so radius of Washington. Unlike The New York Times and Wall Street Journal, the Post doesn’t have national print distribution. Yet the Web site's traffic demostrates that there’s broad interest in what, in print, is a regional newspaper.
Doesn’t that argue for some sort of an online subscription strategy, to monetize all of that out of town traffic? It seems completely obvious: Create scarcity, then charge for it. The demand is clearly there for the Post's content, and moreover, the Post has always had trouble monetizing its national traffic with advertising. A subscription plan to at least get some revenue from that 90 percent of non-local traffic seems like a no-brainer.
There are other models that Web publishers have followed and can follow in contemplating charging for online subscriptions. In my next post, I’ll talk about them.