February 02, 2010

Think I Won't Pay for Quality Web Content? Think Again.

Yesterday, Dave McClure got the tech blogosphere talking, once again, about the debate between free products, largely built on advertising, and subscription models with consistent recurring revenues. His post, summed up as "Subscriptions are the New Black" frustratingly said an entire decade of Web focus has been on inefficient revenue models, and that the successful exits for "free" services were dwarfed by the deaths and ugliness from many more. While I believe that there are certain parts of the Web that should come for free, without a paywall, I have been happily paying premium dollars for many different services, and would hope that there are many more like me, willing to reward services and developers with real money for a positive experience.

Despite the rage and gnashing of teeth over the New York Times' recent move to put more content for subscribers only, and other news showing that Newsday's revenue from subscribers was practically invisible, for-pay content has thrived online, if the content is differentiated and valuable. For years, I have happily paid for a premium subscription to ESPN.com to get "insider only" access to premium columns and features. For almost a decade, I have paid, on an annual basis, for online access to the Wall Street Journal. Meanwhile, in parallel, I am, of course, paying for content from companies like Netflix, TiVo and Sirius Radio, as well as the many, many purchases I make from Apple through the iTunes store, for both music and video.

I am more than happy to pay for quality at a good price. As I have mentioned many different times on this blog, I am not a fan of untargeted advertising, either as a consumer or as an advisor to companies looking to make revenue dollars. I believe that if you can find a premium version of a product that delivers value, and can be promised a professional experience, then you should pay. I did not blink at the $2.99 price for Tweetie 2 on the iPhone, despite free alternatives, and I have paid for my MobileMe account, forking over $99 a year to Apple, for several years, for the privilege of keeping my Mac.com e-mail address, and access to their other online products.

As my own Blippy.com activity will show you, I pay about $10 a month to have my blog content converted to e-mail distribution and sent out through Feedblitz. I have paid for TypePad access. I even recently paid money to try out RowFeeder, and paid for premium versions of TwitterCounter and UnTweeps, to test out and use those Twitter-related ecosystem products. Every year, I pay TurboTax online to send my taxes to Uncle Sam and the State of California.

I pay because I receive value. Value is why Ecademy has members paying $40 a month for premium membership in its social business network, why SmugMug's members are happy with their annual costs and why many users are paying SocialToo for daily e-mail updates or other premium features. I've paid for higher bit rates on streaming radio stations online. I've paid Slashdot money in the past to remove advertising. I have paid to make donations to sites that might otherwise have gone out of business.

Major sticking points with many parts of the Web in terms of monetization come from differentiation, or the lack thereof. I have paid for many of these services because they offer something that nobody else does. If free alternatives exist, then paying for a full subscription is harder to command. It becomes a challenge to change something to a paid model if it has once been free, and you could rightly anticipate massive screaming if popular sites that are free today, including most social media sites, were to start charging for access we get free today. But if the reason sites are just posting up simple ads in lieu of subscriptions is due to the belief I wouldn't pay, they are wrong. I believe many others like me want to get the opportunity to find high quality products, and they wouldn't shy away from paying a fair price.

Disclosures: I am an advisor to SocialToo and have done premium work with Ecademy.

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