Will Consumers Pay For Online Content?

Folio: The Magazine for Magazine Management, April, 2001 by Mark Miller

Pay per view, pay by the article, or pay for a time-based pass--whatever the method, publishers aren't sure if they can or should start charging for material that, to date, has been free.

Bill Folsom

Director of Online Marketing and Technology American Express Publishing

I'm skeptical. There's so much free content on the Web, you can generally find an alternate source. I'd like to see it happen, but I don't think it's going to be soon. There are things on our site that you could potentially get people to pay for, however--we have a database of all the recipes in the magazines, for example, and it's searchable. You're never going to get that in print. I don't see actual text articles working so well as interactive data-based features. If it were an exclusive interview with Madonna or the Queen--and not being done in any other medium--maybe. You'd have to close out all other media and control it somehow. But looking at something like Napster tells you that it's hard to control things. Once it's out and someone pays for it, they'll spread it around. Everyone is passing along their passwords. Once the genie is out of the bottle, it's kind of tough.

Wenda Harris Millard

President, Ziff Davis Internet

That model has real potential versus the subscription model. It's because the consumer knows exactly what she's about to pay for. If the consumer feels that she can't get the information elsewhere, if it has the right price point and has the mark of trust either by brand or author, I think she'll pay for it. On the consumer side, the "$3 for this article" model is okay. But the pay-per-view model can be very viable in the b-to-b space. Users who can get sophisticated research that's not available elsewhere will be very happy to pay a high price. It's far more viable than paying $29.99 or $499 for a subscription and not knowing what percentage will be useful. And you don't have to pay for anything you don't want. I think you'll see many Web sites try it. So far, we've told the user you can get anything for free--but what we'll see is that brand will count more as we move ahead. People will be more selective.

John Cobb

President

Automotive/Motorcycle Digital, Emap USA

We have that set up right now with our Hotrodarchives.com. I wouldn't say it's a huge moneymaker, but it's something we believe we have to invest in. I think companies will move in that direction, just from the sheer economics of it. In time, people will pay for online content for the same reason they pay for a magazine. Magazines find all the cool things in a certain subject area and compress it. The Web is so cluttered now. So if a Web site can find whatever the coolest content is for you, for your niche, you're all set. It would be harder for general-interest magazines, but in specialist markets, people are passionate about their interests and will pay for information about them.

Michael Rogers

President, Newsweek.com

Paying for online content has some applications. But one problem is the lack of a true micropayment system--that is, having the ability to charge 25 cents or 50 cents easily. Credit cards are the only way right now. One of the great ironies is that people seem to think that news on the Web should be free, but as soon as it's old, they will pay for it. We take advantage of this by archiving our stories and charging for them after they are a week old. That's turned into not a huge business, but a nice sideilne. Users can either pay for a single story or sign up for 24-hour access or a week pass. The day and week passes sell pretty well--and that was surprising to me. It suggests that the mindset of consumers, when they look at using things like magazines, is not by the piece. It's "I'd like to pay a single fee and choose what I want." I suspect it will be hard for us to change that fundamental model. And we need to decide if we even want that model. Subscription is a pretty wonderful business. It seems to me th at pay-per-view will probably have something to do with introducing the concept of premium services as we go forward. But it's really difficult once you've been giving something away for free to start charging for it.