The Value of Free Content is Up For Debate
Posted June 2, 2011on:
What if all content were free?
With all the discussion going on about pricing in my Digital Publishing course at Hult International Business School, I had to ask this question. There are people, like Cory Doctorow, who maintain that content should be free. He publishes his books for free online using the Creative Commons license. I actually agree with him since I think that piracy in terms of entertainment materials is just too rampant to fight, and who would want to? Often the pirates are the publisher’s biggest fans, and fighting fans is just weird.
But I can’t lump all publishing together. Entertainment is one thing while business, news, and other more factual writings are distinctly separate. When this information is provided for free, does it maintain an intrinsic value or gain the value of its price – nothing?
John Jantsch from Duct Tape Marketing has outlined 5 pitfalls of free content for a business. Hartley Brody with the Inbound Marketing pros over at Hubspot posted a reply defending free content. This exchange made me ask some very important questions about the value of free content:
How Much Value Do People Get from Free Content?
Jantsch points out that show-up rates for free events are around 25-30%, much lower than would be expected to a paid-event. I can’t speak for everybody, but I can say why I don’t show up to free events I RSVP for: I just can’t be bothered or something else comes up. That something else has more value in my eyes than a free event, and nothing happens to me if I don’t show up. No lost revenue without a gain, for instance. And if I do show up, how much attention will I pay? Will I be more likely to skip out if I hear a friend is having a party nearby?
Brody’s reply to this issue was to say that the event holders (or newsletter senders or whatever flavor of content you produce) should include a coupon or other incentive for people to do what they said they would, such as show up or read, but this isn’t always possible. Newspapers can’t necessarily give out coupons when all their content is free, for instance. And this coupon must be pretty valuable to outweigh my laziness before an event. After all, it’s a gain, not a loss, and humans react more strongly to potential losses than potential gains. They will trudge through snow when sick to attend an event if it means they would have “wasted” their money if they don’t go, regardless that the cost is sunk. This is hard to duplicate with a coupon.
This lack of effort to attend or gain the benefits of free content versus paid means that when someone has actually paid for content, they will actually get more value out of it. If I have paid for a NY Times online subscription, you betcha I’ll be reading most of those articles! When I pay for a single magazine, I go through each page not to miss anything, even when most of it is uninteresting. I feel I have wasted money when I don’t. Do I read all my RSS feeds with such zeal? Nope. I lose nothing by doing so, even though my feeds routinely pump out great information.
How Can We Judge the Value of Free Content?
Jantsch also raised the point about “eroded value.” In his words, “How good can something that’s free really be?” He was more worried about the lack of differentiation between quality content and slapped-together “pitch fests.” When all the prices are the same, telling the two apart is hard. This probably contributes to the lack of effort people will put into attending a free event. Without prior experience, it’s hard to tell if the event is really worth going to.
Brody counters by suggesting that publishers need to build a reputation for quality and then show that reputation off by displaying how many other people have signed up for your content. This still doesn’t display how much the content is worth, however, since it doesn’t answer how many of those newsletter recipients are actually reading the e-mails or have just forgotten to opt-out. With the Internet being so huge, it isn’t that hard to get a large following. Just look at some of the “gurus” on Twitter.
A higher price signals the higher value. The retail industry has known this for ages. They have known that if you want your store to be considered high end, make the scarves expensive. Even though they are really rather cheap to produce, the price gives the items caché and the brand, value.
Prices Might Help
Pricing your content will help you avoid these pitfalls. If you charge for your events, people are more likely to show and truly listen to what you have to say. The price can be used as a way to judge value, too, so the more expensive – to a point – the more valuable.
Now, like Jantsch, I am not suggesting hiding behind a paywall. For instance, displaying ads for expensive items would associate your free content with the value of the displayed merchandise. You can encourage event attendance by having people pay with digital currency received through a game experience. Perhaps a more common and direct system, however, is the freemium system. A newspaper could have its more general reporting up for free and its in-depth coverage behind a small paywall. Longer reports and such could be paid for one at a time. eConsultancy does something like this with their varied level freemium memberships.