It’s a tough question. As you might have read in the prequel to this post, there are potentially three digital publishing pricing models. Here’s a brief list:
- Make it cheap or free so that word gets around easier and hopefully encourages purchase of the more expensive versions of the same content. This hits lower price points, but may cannibalize sales.
- Charge subscriptions to view content, like the Financial Times does. Hopefully the publisher’s brand will be so well regarded the consumers will think it is worth paying for and not opt for the free version put out by competitors.
- Publish the content as though it were software. Consumers can purchase it, but there will be upgrades and such they will have to purchase as well. This will cover the large initial investment in digital and the subsequent smaller investments to keep the operation running.
But which one works?
Well, Not Paying and Not Ads
The pay wall runs up against the availability of free substitute content. This model requires a strong brand, and those are expensive to grow. Because of this, pay walls can only really work for those companies that already have strong brands. Anything less and this path is unavailable.
To treat content like a piece of software makes a certain amount of sense, if it is delivered through an app, but if it is merely available online, then the pay wall’s problem still exists. How can a company, particularly if it is not immense and does not have wide brand recognition, grow? Or will we be faced with a monopoly of large publishers as all the smaller ones die out?
Digital advertising can’t cover the bills like it used to, so this takes out many of the free content business models. As John Squires, the former EVP of Time Inc, puts it, digital advertising is worth less than the analog version because it gets around to fewer people. This is odd, considering how people pass along information via social media, but Squires writes that a paper magazine is read by 7 people but a digital version is read by only 1.5 people per copy.
The Answer Is an Infomercial?
I think publishing will take a different route. Publishers will make their money through the communities that surround their content. They can charge for people to be a part of this community or merely sell merchandise to these individuals. That’s what the new magazine Gilt Taste is doing. The cooking magazine has no ads. Instead it offers consumers the opportunity to buy the products it discusses in the content. This is actually what Cory Doctorow is doing by allowing his books to be passed freely all over the Internet. The content becomes an advertisement for something else. In Doctorow’s case it is the hardcover versions of the books. In Gilt Taste’s case, it is the cooking appliances.
I know what you’re thinking: “This isn’t pricing content! It’s eCommerce! An infomercial!” And you’d be right. That’s exactly what it is, a pretty infomercial. What’s wrong with that? Yes, perhaps the newspapers will have some difficulty with this, after all what can they sell you in an article about Obama? But they could offer you’re a chance to donate to the political parties, which in turn support the coverage.
In either event, I think free content is the way to go. Money should come from elsewhere. Feel free to disagree with me. Many do. You can do it in the comments or even Tweeting at me.
*This post was written as part of an assignment for my
but since the topic was interesting, I decided to use it for this blog.