Brewing the Perfect Blend of Free and Fee

Page 3 of 3


>New Tools, New Skills, New Businesses

Selling ads against free content is not enough to make a blended model really work, many warn. Business publishers must learn some consumer-side tricks and analyze their own traffic better to understand customer needs. "We are now looking at user behavior on the free and paid side so we can use it to develop better products," says Warwick. Other tricks, like iterative registration, draw more granular information from users as they ask for more free content. Professional information providers are only beginning to mine their own user data and map this against online usage patterns, says Kate Collins, director of product management for distribution and commerce at Macrovision, which supplies DRM solutions. These changes often require a shift in infrastructure, however. "As organizations think differently about data mining and depth of knowledge, they are starting to organize people behind the scenes so business intelligence and ecommerce [are] working together," she says. "The challenge for information publishers is to make sure they are integrated across vendors in order to gather this information."

Shifting and blended revenue models are not just a matter of how revenue flows, but they also transform how content gets made and companies organize and prioritize resources. Many fee-based services suddenly must grow ad sales forces, essentially get into a new business, if they want to play in the free content game. And many of these companies have never had to contend with sponsor pressure or church and state editorial ethics issues. Traditional ad-supported businesses must learn to merchandise content more effectively and think like retailers. "The fee-based guys are going to need advertising muscle and the ad-supported guys need packaging," says Outsell’s Stratigos.

New blends of revenue models are going to require even deeper mixing. The skill sets, business organizations, and budget allocations that brew up that cup of content to end customers may be as eye-popping as the potent new cup of joe. Prepare to see the pot stirred.

Page 3 of 3