How to make users pay for online content? Create scarcity, proclaimed experts at an INMA conference in Copenhagen. That is of course easier said than done.
It seems to be the most discussed topic in the media industry at the moment: How can we make users pay for content? What will it take to transfer the successful newspaper model into the digital arena?
I was priviledged to be one of the presenters at International Newsmedia Marketing Association‘s conference about the topic this week in Copenhagen. And let me tell you right away: All the presenter, including myself, made sure to include lots of question marks in their talks. Describing the trouble is easy, telling what to do much tougher. It became apparent that there are no obvious case studies out there, especially if media companies hope that user payments from digital products will produce as much revenue as the monopolistic newspaper business used to do in its golden era.
But still the presenters and participants expressed a lot of optimism. And they boiled it down to a specific point: Media companies need to create scarcity where content is abundant. We need to do things in a uniquely different way than everybody else!
Frederic Filloux, the editor of the highly recommended newsletter Monday Note, pointed out that the challenges all started out with the failure of the ad model. CPM is lower than ever, endless inventories are pushing prices down even further. And users spend their time on social networks rather than on news sites.
Filloux argued the “hybrid approach”, mixing what is free and what is paid for. His principle: The content should be free for the audience I pick, while the audiences actively choosing our content should pay.
The Monday Note editor offered five action points to revers the free trends:
- Target the heaviest users
- Focus on the type of uses, not on the old “free vs. premium” principle
- Offer a better user experience
- Find a friction free payment system
- Diversify the platforms
Ed Efchack, senior consultant at Belden Interactive gave an overview of how US newspapers are charging for online content. None of the cases he went through offered a great hope for general newspapers which may think a general paywall around their web site will lead to salvation. Most of the newspapers which had erected a paywall had only managed to get 2-3 percent to pay.
Carlos Campos, director and chief researcher at Innovation International, talked about the iPad. His answer: Yes, the iPad is IT! It is a game changer, which will revolutionize the news business. Campos’ advice: Make sure to make content nobody else makes. And find news ways to tell stories.
For inspiration he offered the multimedia specials of El Pais in Spain.
You can only charge for something that is scarce, said Campos. He strongly urged news company to reorganize to make an online-centric newsroom. “It is only from a internet base you can form a true multimedia organization”, he said.
And what is potentially scarce in content? Here is his list:
- Original story telling
- Informed comment
- Analytical opinion
- Exclusive information
- Practical recommendations
- Local reporting
- Editing (brand)
These are just a few of the presentations. Many more were held. As for myself, I talked about how Norway’s leading newspaper Aftenposten is trying to create new digital revenue streams. It is a three step strategy: Display ads, classifieds, and user payment. And it has already shown results. 2009 turned out to be a major economic turn-around for our web site, which we are quite proud about.
I also presented my thought about “five ways to make users pay for digital content”. I have already written about this before on BetaTales – click here to read.
Will users pay for content online? Everybody seemed to agree that some users will. But news companies must struggle to make sure they are truly unique in what they produce.
In any case 2010 will be the year of experiments in this area. 12 months from now we will know much more about what worked and what did net.
Because there is only one way of moving forward: Experiment, experiment, experiment!
Thanks to INMA and organizer Inge Van Gaal for putting up a great conference!
Here is one of the other presentations held at the conference. Mindpark CEO Joakim Jardenberg had the task of arguing that the future is free:
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