Pay-Per-View's Payback: Cashing in with Content

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The chance to cash in, big time, selling content online is just around the bend. "We are seeing a real opportunity for content providers to start charging," says Jonathan Hurd, an analyst with Adventis, a Boston-headquartered consulting firm.

More and more of that sentiment is being voiced. "Without a doubt, there is substantially more interest in selling content today," says Leslie Poole, CEO of Washington, DC-based Microcreditcard. com. "Even a year ago, content owners weren't talking this way. They were still giving content away. Now, they definitely believe they can get paid."

For starters, know there is at least one problem that needs unraveling before this gusher of dollars breaks-pricing of content needs to be rationalized. Nowadays-mainly because few content owners genuinely thought it worthwhile to do the market research needed to set valid pricing policies-prices are all over the map.

That needs changing, and the fuel for this reassessment of pricing is the new optimism that, indeed, there will be buyers. Impetus for this rethink comes from the convergence of many factors:

  • Many competitors with free content have vanished. "There have been over 270 dot com bankruptcies; that's reduced the amount of free content available," says Andrew Burroughs, chief marketing officer at Apogee Networks, a Saddle Brook, NJ provider of collection tools to online content providers. "This makes it easier to charge," says Burroughs.
  • A byproduct of the Napster litigation is heightened consumer awareness that content indeed has value and is copyright-protected, says Microcreditcard.com's Poole.
  • "Consumers have become increasingly comfortable with online payment," says Hurd, and-as their comfort with buying books from Amazon or phones from Verizonwireless.com grows-so expands their comfort with buying anything, content included.
  • "Technology advances are making it easier to sell content for providers and easier for users to buy," says Ranjit Singh, president of Bethesda, MD-based DRM company ContentGuard.

Still, the big question hangs: Will consumers buy? Chew on this opinion: "When content is monetized-when consumers are paying for it-this genuinely benefits the consumer," says Burroughs. "That's because more, better, premium content will go online. The Internet will be very much like cable TV. At first, many analysts said cable TV would never catch on, that people would never pay for content. The same will happen with the Internet, particularly as better content goes up for sale."

Research is less immediately optimistic, however. When Newtonville, MA-based Lyra Research, publisher of Content Intelligence, asked Internet users if they would pay for content, only 15% agreed with this statement: "I think that Web sites will eventually have to charge visitors for access to their content."

When Lyra asked users if they had ever paid to access content on the Web, only 19% said they had. One key finding: When users did pay, it was "because they had to-the site was the only place where they could get what they wanted," reports Lyra's managing editor, John McIntyre.

That distinction is key: Users will not pay for content that is readily available free-of-charge at other sites. "No one is going to pay for commodity content," says Therese Wells, director of solutions marketing for Seattle-based Qpass, developer of payment collection tools used by media from the Los Angeles Times to USA Today.

"When the value of the digital offering is clear-when the user perceives the value-the user's readiness to pay increases dramatically," says John Kannappell, an analyst with New York-headquartered ebusiness consulting firm Proxicom. That may seem obvious, says Kannapell, but many attempts at selling content have failed precisely because "the offerings weren't compelling enough to motivate buyers."

But when the consumer clearly perceives value, analysts increasingly are confident that cash registers will ring. "We are a society of instant gratification," says Singh. "That is why sale of online content will prosper. We want what we want now, and when it's convenient to buy information we need online, we will."

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