Pay to Play 3.0: Same Old Tune?

I am now living through the third wave of arguments for fee-based digital content models in the decade and a half I have covered the internet publishing world. The inevitable response to the dual forces of recessionary ad decline and the more tectonic and irreversible shift to digital has been: “Make ’em pay.” Almost everyone on the consumer side of the fence is talking about “hybrid” models and “pay areas.” It is hard to listen to such a conversation without someone dropping “the iTunes precedent” as an argument that both micropayment mechanisms and consumer attitudes have turned the corner on this issue. People are ready to underwrite the costly content industry. They see the ugly alternative (bad or shallow content), and they are more willing to put a cash value on digital media now.

Now to be sure, the free-for-all internet is a misnomer, especially to readers of this magazine. As most of you well know, B2B publishers have been selling subscriptions into databases, catalogs, webinars, digital delivery, and library services for years. Even the trade publishers that do rely on the ad model online aren’t complaining much this season about “freeloading users” or depressed CPMs. Instead, they are focusing on monetizing audiences the old-fashioned way—by selling leads and access to proprietary information.

Talk of the pay model is preoccupying both consumer and hybrid content providers, however, and ultimately it does affect the entire ecosystem. But haven’t we been to this dance before? Have the new testers of hybrid models discovered something new? Have the consumer, technology, and media all changed so much in the last few years that somehow fee-based models are viable?

In the first wave of fee-model experiments, we learned that users just didn’t value digital media in the same way as print. Things they subscribed to offline they expected for free online. This was not an unreasonable consumer claim, since consumers use online media differently. They click across and among so many content brands, it is hard to imagine a subscription bundle that could embrace increasingly fragmented usage patterns.

The idea of a premium content coalition has been floated in the past. In this model major brands participate in some kind of online gold pass that gives members access to premium content across many sites. Individual publishers would get a proportional share of the membership fee pool according to traffic. Nice idea, but you still need to hammer out the brand mix and somehow convince the top newspaper, TV, and magazine brands that they should share billing, revenue, and traffic with select bloggers. Such plans only work under near-ubiquitous agreement among competitors.

Many proponents of reviving the fee-based model point to iTunes for encouragement. Its pay-per-track model and micropayment method seems to work for music and now for mobile applications. Well, it works for a company with a main interest of selling hardware to a devoted band of brand loyalists. Will people really pay per article across multiple vendors? More to the point, the value proposition for music is much different from news and information and even entertainment. A 99-cent track is a permanent license to something you tend to enjoy or collect in perpetuity. The same cannot be said of news articles and even TV shows. News and information are fleeting, while 99-cent music licenses tend to give enjoyment forever. And just as a content collective would have to work across a vast number of publishers to be effective, where is the standardized micropayment system? PayPal and Google Checkout are not even close to ubiquity.

Finally, there is the revived notion that people will buy convenience in the form of specialized content “packages” such as archives or aggregated, downloadable articles. Again, we did this dance before. Publishers tried to sell everything from recipe packs to custom PDF article collections based around hot topics. At best, most of these ideas accrued incremental income.

My point here is not to discourage the search for new pay models. We need these tests. However, I don’t want to see the industry chasing the old ones again in the hopes that tech and attitudes have radically changed. Look at the content that already attracts direct revenue now: games, downloadable music, financial information, and health advice. The content that is packaged or pitched in ways that demonstrably improve how people live better or longer, have more fun, or make or save money are of value to us because they are valuable to living. Big media brands like to flatter and rationalize their massive investments by saying people will “pay for quality.” In fact, they pay for relevance.