by Niki Fielding
Mashable posted the results of Pew Charitable Trust’s survey on digital content purchases, and I was excited to see its findings. The report said that 65 % of people have paid for digital content. While music and software downloads are no surprise (33% each), it warmed the digital publisher in me to see that people are indeed paying for subscription content from news and other information sources—18% according to the survey…until I l read the data more closely. The 755 Internet users (surveyed between October 28 and November 1, 2010) were asked if they had [ever] purchased various types of content, not if they were regular purchasers. So the 18% seemed much less exciting and reminded me what my company learned the hard way over the course of 2009 and the questions I’ve been asking ever since…
In 2009 my company launched our first consumer-facing service line, Jump Start Social Media. In essence, Jump Start was an e-book that walked business professionals (whom our research showed were clamoring for individualized, affordable social media support) through setting up profiles and strategically managing their social media engagements via LinkedIn, Twitter, and Facebook.
The e-book sold for $9.95. Each time we updated the guide, purchasers would receive free updates for a year. We were fortunate to have coverage in The New York Times, The Wall Street Journal, on NBC-TV, and through lots of other media outlets, but sales just limped along. Then, to confirm my growing suspicion that most people didn’t want to pay for most online content, we offered just the Facebook portion of the book as a free download. Within two weeks, with no more promotion than we’d done for any other offer, there were more than 400 downloads—well over the number of sales of the entire book for the preceding 8 months. When we asked people what they thought of it, they were very enthusiastic. When we offered them the Twitter and LinkedIn guides (the rest of the book) for $6.95, there were ZERO takers. None. Zero.
With no business model to support it, we shut down Jump Start and resurrected some of the concepts in the form of highly customized, one-on-one social media training for executives with a price tag that starts at $1,495. The market was there, it just wasn’t there for the solution in the form of digital content.
So with the Pew research and the demise of Jump Start in mind, I’m wondering more and more these days about who is buying digital content, what content is paid for by subscribers, and what content is supported with other business models. In other words, what are the business models for content, especially text content, and what does the future hold for the advertising industry?
I have some thoughts to share, not in any particular order:
Is Print a Hard Habit to Break? Seventeen years ago, when I headed digital publishing for private investors at Dow Jones (The Wall Street Journal), I got into a heated argument with a long-time print journalist who simply couldn’t imagine people not, literally, reading “the paper” in the morning. It was such an ingrained habit with him and so many of the Journal’s readers that nothing would persuade him that digital viewing could be a replacement to “reading the paper.” Behavioral therapists say you don’t break habits, you replace them. So perhaps it’s just now, with our mobile phones and iPads and other hyper-mobile displayers of text content, that the habit of “reading the paper” can really be replaced. But does that mean we will pay for that convenience? What is it about digital content that seemingly makes it less valuable? Are we less willing to pay for it because it isn’t tangible? Do we pay for print out of habit? What if there were no more print sources, would we be willing to pay for quality content if it was ONLY available digitally?
Is Advertising a Hard Habit to Break? The first ad appeared in the U.S. in the Boston News-Letter in 1704 and it was deemed a success that spawned an industry. The assumption has long been that advertising works, but it was difficult, until direct mail and then Internet marketing, to prove the 1:1 relationship between marketing and closed sales (and repeat sales). With the growth of digital marketing channels, it has become much easier to track sales generated from specific channels, e.g., SEO, paid search, email, and even social media and tie them to the bottom line. But does the ability to see those connections mean that’s the best business model going forward? Are there other models that will replace the habit of advertising?
What Happens to the Marketing Mix When People Are No Longer Tuning In? What if broadcast evolves away and along with it passive reception to advertising? How hard will advertisers work to truly engage and how receptive will people be to that engagement via narrowcast?
The Rise of Social Media. People still trust other people, and they trust the brands that act like well behaved guests in their lives. Social media connects people to other people and facilitates conversations around brands. Will word of mouth and other forms of social media play a larger, more structured role in the integrated marketing mix? How do brands and their stakeholders collaborate to ensure trust remains high in this channel?
Can Ad Models Like TalkAhead Be an Answer: Transparency at Its Finest? When brands can immerse themselves in their communities of interest, they are welcome participants. TalkAhead enables advertisers to participate in the comments sections that follow newspaper and magazine editorial as advertisers, not as consumers. Very transparent. The advertisers’ comments are clearly marked as such. If the consumer has interest, he or she clicks through. The publication gets paid, the consumer is in control, and the savvy marketer reaches another potential customer.
Cost to Produce. If it costs less to produce and distribute a digital publication than a printed one, and those costs remain the same as the subscribership goes up, wouldn’t it be a cool incentive to see consumers’ costs going down as their favorite online publications acquire more subscribers? Might one business model for paying for content be to encourage people to promote their favorite published content sites both to share that content and to reduce the subscription cost they themselves pay? In the new “new world,” the publisher becomes more profitable through volume and returns a portion of the profits to the subscribers. This, in turn, generates more buzz and more subscribers and helps the publisher continue to build a better product.
More Questions. When I step away from the “where we have been” and “where we are now” and try to look forward with a fresh eye, I keep wondering: is advertising going to last, morph, or bite the dust? And what do any of those answers mean for quality content that has traditionally been heavily supported by advertiser dollars? I’ve shared some of my thoughts—what are yours?
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