Are We Ready to Play With Pay? The Content Value Reproposition

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This year, the question is being bellowed from every podium, in every digital media conference panel, in reams of articles, and in exabytes of online commentary. Will users finally start paying for their online content when so many alternatives crowd a search-driven, user-generated, all-you-can-eat buffet of free?

It's time to pay up, sometimes angry and struggling media moguls have proclaimed. News Corp., The New York Times Co., and many newspapers and magazines are planning some kind of new or tighter pay model in the coming year. Consumers, you are officially on notice: Journalism costs money, and the current online advertising economy doesn't even come close to supporting big media in the lifestyle to which it has become accustomed. As we were told in the mid-1990s, and again after the dot-com crash of 2001, the "free ride" is over. And we really mean it this time.

So are readers ready to pay up? Well, we'll spare you the suspense. The short answer is: Online, users already pay for content:

• At dating and community sites such as Match.com and Classmates, where visitors spend nearly $1 billion a year even as Facebook and many free dating sites proliferate

• At Rodale's MensHealth.com and WomensHealth.com, where subscription-based weight-loss programs help drive the business

• At subscription gaming sites like Club Pogo or World of Warcraft, where millions pony up monthly fees for casual and role-playing genres that have robust free versions everywhere

• At ConsumerReports.org, where even if you aren't one of the 3.3 million monthly subscribers, you can be one of the thousands who pick up $14 "New Car Price Reports," even though Kbb.com and Edmonds.com among many other free sites provide deep and authoritative car content

And we aren't just skimming the cream of exceptions that prove some rule that users really won't pay for digital content. HarvardBusinessReview.org, FT.com, Kalmbach Publishing hobby magazine sites, and Meredith's scrapbooking services and online quilting clubs all sell access or packages of content to willing audiences. Even an offbeat startup like U.K.-based BouncyCastleOwner.com gets $47 a year from each of the merchants to whom it proffers inflatable kids' party gear.

In fact, according to Subscription Site Insider's first comprehensive survey of paid content online, consumers spent $5.88 billion in 2009 on digital subscriptions to content. There is nothing new or surprising in these successes, because they reflect what we have known all along about the online paid model. Specialized content, or content that provides unique tools, convenience, or money-saving value to users, will sell despite "good enough" alternatives from a smart Google search. "People will pay for content, people are paying for content," says Anne Holland, author of the report and founder of Subscription Site Insider.

"What people won't pay for is ‘generic.' People pay for things they have a deep passion for, and most people don't have a passion for anything that is generic."

The question isn't whether people will (at last) pay for content. It is whether the publishers of general news, information, gossip, and how-to sites can create the kinds of content and-more importantly, experiences-people are already paying for.

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