A VC - Latest Comments in Monetize The Audience, Not The Content

Re: Monetize The Audience, Not The Content

fredwilson — Sat, 08 Aug 2009 08:52:22 -0000

I've not seen it done

Re: Monetize The Audience, Not The Content

Alex Salkever — Thu, 06 Aug 2009 15:33:07 -0000

I totally agree with this post and think this is probably the best future for publishing.

Re: Monetize The Audience, Not The Content

Jef Nance — Thu, 06 Aug 2009 01:06:10 -0000

Hey, Fred, great post... Your thoughts on pay blogs? Has this been done/tried? What would be the model that might work? Anybody?

-jef

Re: Monetize The Audience, Not The Content

freeloader — Mon, 03 Aug 2009 00:16:13 -0000

This is exactly my experience - I used to read the FT for the first week or two of each month, moving to other sources when the number of free articles ran out. Now I have adapted my usage - I only read the articles at FT that I perceive as being the most value added. This usually means I can stretch my free allotment through the month.

If the NYT were to adapt to a similar model, while some people would feel the need to subscribe, I believe that the vast majority would simply seek out other news sources. RSS readers make this fairly easy to do and I am sure that many second tier newspapers and online-only news sources would welcome the additional traffic and profile. Therefore, the newspaper industry as a whole faces a prisoner's dilemma as the major players contemplate moving to a paid model.

Re: Monetize The Audience, Not The Content

Aaron Klein — Sun, 02 Aug 2009 20:20:49 -0000

Some ideas: can you execute that kind of model for four weeks? Don't do a lot of fanfare, just change the security model and see how your conversion rates change?

Might be impossible without causing problems with your existing paid folks. So here's another idea: make a carbon copy of your site, give it a different brand, kill a feature or two to differentiate, and test new models with it. On this one, you can pull up the gates and stop any cannibalization of your already-successful site if need be.

The bottom line is -- this is always tougher if you have a successful site earning money on content already. The NYT has it easier than you do because they have no success in this arena. They have nothing to lose by trying it.

Re: Monetize The Audience, Not The Content

fredwilson — Wed, 29 Jul 2009 18:22:19 -0000

Some will. Some won't

Re: Monetize The Audience, Not The Content

fredwilson — Wed, 29 Jul 2009 18:22:10 -0000

Transactional overhead is too high

Re: Monetize The Audience, Not The Content

joebryant — Wed, 29 Jul 2009 10:57:42 -0000

And I should add, Aaron, we've got a little bit of a wrinkle as we're not converting 41% of all the visitors to the website. It's 41% of the folks that sign up for our Free Email List which is somewhat of a commitment barrier they have to clear. I don't know what the percentage is of all the people that look at the website online but I'd expect that % to be pretty small. Which is what keeps me wondering if we couldn't do something better.

I LOVE the idea of what Fred is suggesting. Maybe I'm too cynical but I just fear that a huge number of folks would change browsers / clear cookies to get around what effectively is not much of a wall.

Re: Monetize The Audience, Not The Content

joebryant — Tue, 28 Jul 2009 20:54:13 -0000

Thanks a lot, Aaron. This has been a really helpful topic to read.

Re: Monetize The Audience, Not The Content

Aaron Klein — Tue, 28 Jul 2009 19:59:35 -0000

I've thought about this a little bit today. Honestly, if you have a model that converted 50%, I'd be pretty happy and just focus on special promotions (maybe prorated pricing or longer free trials) to let late joiners get a better feel for the product. Not sure you need to do more than that to get a better financial result.

Correction: 41%, but still.

Re: Monetize The Audience, Not The Content

nkannan — Tue, 28 Jul 2009 16:30:45 -0000

I just figured out a simple way to erase FT's cookies on my PC and access it over the limit they may set per month, unless they save cookies in their servers.

If there is a way to get around the FT's 9 views per month limit, the users would do that than pay.

Re: Monetize The Audience, Not The Content

ak102 — Tue, 28 Jul 2009 14:52:18 -0000

let's get back to basics: news companies create articles. each article has a price that's a function of supply and demand. of course no two articles are identical. but in today's world many are effectively the same to the consumer (hence the low price). the supply of an article is a function of:
- number of writers out there on the topic
- how niche is the topic
- how in-depth is the analysis
- how hard it is to acquire the news on that topic
- how old is the article (breaking news is worth more, historical archives may also be worth more)
- etc

so each article has a VERY different price. FT exclusive breaking news may be worth a lot of money to bankers. What Paris Hilton did last night probably isn't worth much.

every piece of news is in a marketplace of it's own. companies used to package those pieces into a "newspaper" like record labels packaged songs and hits onto CDs, because they know a newspaper probably has just one worthy article that a consumer would pay for. just like a CD has just one hit.

so I don't see why content can't be sold. it's just that every article should cost a different amount. the real cheap articles can be ad-supported and syndicated in return for ad-rev-share. the expensive ones, such as breaking news or niche analysis, etc, would cost more. also note that the value of an article changes over time. time is a big factor in news after all.

so why can't news companies just write articles and sell them, like any other business? sell them to sites that can build communities around them (better commenting systems, social networks, etc). sell them to sites that can target advertising better than them (google, etc). the market forces should establish which articles people will pay for and how much, which they should bother writing, and what they can afford to spend on writing them.

and if your business is less efficient than that of a blogger (ie it costs you more to put an equivalent article together) then you shouldn't be in that business - that's the reality. there should be economies of scale, not the other way round...

Re: Monetize The Audience, Not The Content

joebryant — Tue, 28 Jul 2009 12:06:52 -0000

Thank you Mr. Klein. And thank you Mr. Wilson for this forum and chance to interact. This is a topic that hits home with me as I've been living this debate for the last 6 years. I own a business that provides information for folks that play Fantasy Football. www.Footballguys.com

Early on, we were 100% free. I knew I'd have to do that to establish a reputation and earn business. We were successful attracting an audience to the website and also with our Daily Email we'd send out each day in the spring and summer. The Daily Email contains the relevant news stories of the day along with our analysis of those stories. And also information about what new content features are on the site.

We opened up and after a few years, we had 30,000 subscribers to the Daily Email. At that point, we felt comfortable going to a pay subscription. We'd still give away almost all of the information from May up until July but around the middle of July (when Fantasy Football owners are really cranking up their interest) we "put the wall up" and started charging for access to the website. The Daily Email remained free all the way up until the regular season starts.

The million dollar question for us back then was how many of those folks that opted in for the free Daily Email update would pay us money to access the content once the wall went up? I had people tell us we should be thrilled if 5% of our free customers would pay. I didn't know but I knew we were at the point where we had to make a change and start charging. Turned out that 50% of our free customers opted to sign up for the pay subscription. We then had 30k that were on the free list and 15k that were paying us for the premium content.

That was 6 years ago. Each year, we've gone with a similar model. The website is completely free from the time that new content starts going up each year in May and remains free to everyone up until mid July when the wall goes up. The Daily Email Update starts in May and remains free all the way up until the regular season starts in September.

We've grown the Daily Email Update subscriber to around 85,000. About 41% of those folks now will sign up for the pay subscription.

But still, I wonder if we could be doing this better. I worry that a guy that finds our site in August during the heat of the Fantasy Football preseason really doesn't get to see much from us. He can see all the great content that is behind the wall (or at least he can see the titles). And he can see all the content we did last season to get a feel for what we do. But I worry we don't give him a good enough "taste". That's why Mr. Wilson's post on this topic caught my eye.

The flip side to that of course is that if we let them "taste" too much, they get all they need for free and don't subscribe.

Our audience is a pretty tech savvy bunch. My gut feel is that if all you had to do was change browsers or clear cookies, a huge % of them would do that. And laugh at how naive we were thinking they wouldn't realize that's all one had to do to "get over the wall". There is a loyalty factor involved of course and a "good will" angle so some would pay just out of honor. But I'd think huge numbers would not.

Any thoughts there? Much thanks.

Re: Monetize The Audience, Not The Content

pasta2u — Tue, 28 Jul 2009 09:10:57 -0000

Incidentally, "free" content is not unique to the internet. There are plenty of printed Newspapers distributed free (door to door local rag, on public transport, at the local supermarket, etc.) Some of these make good money, others achieve their own marketing objectives (eg customer loyalty to the supermarket) while not generating any direct revenue.

Re: Monetize The Audience, Not The Content

judy shapiro — Tue, 28 Jul 2009 00:50:50 -0000

Look at the success stories -- not the sad failures. All Things D had an article about Paltalk because we are a profitable and successful community that does monetizes its audience. In fact, we just bought out our VC, Softbank, at a premium. This can and does work :)

http://mediamemo.allthingsd...

Re: Monetize The Audience, Not The Content

fredwilson — Mon, 27 Jul 2009 22:11:33 -0000

Yeah. Mike's a smart guy. And he takes his own advice

Re: Monetize The Audience, Not The Content

fredwilson — Mon, 27 Jul 2009 22:10:21 -0000

Wow. Can you think of some more???

Re: Monetize The Audience, Not The Content

fredwilson — Mon, 27 Jul 2009 22:10:18 -0000

Cool. I'll check out your post

Re: Monetize The Audience, Not The Content

Jeff Hilimire — Mon, 27 Jul 2009 20:45:14 -0000

Lawrence, couldn't agree more. Not only would those prolific users add to and enhance the content, they'd almost assuredly drive more traffic to the content, providing a greater value than if they paid a small subscription fee.

I was on ESPN.com today reading an article and I was amazed that there was no way to leave a comment. They have a paid area as well for ESPN Insiders which is absurd in its own right. It's amazing, you can't even comment on their videos. For such a media behemoth to be so far from this type of model and so far from understanding the way people want to consume content...well, its not a good sign for us to expect progress any time soon.

Re: Monetize The Audience, Not The Content

Mike O'Horo — Mon, 27 Jul 2009 19:12:46 -0000

I am not a media maven, nor online content maven. I've only been studying this space for a couple of months. Conspicuously absent from this discussion, it seems to me, is an acknowledgment that most proposed subscription rates are rather modest amounts, with the NYT having historically earned its place at the top of the pricing heap. The motivation behind people visibly whining about a few bucks to read what they value seems akin to the famous answer to the question of why dogs lick their privates: "Because they can." Just because people don't want to pay for something doesn't mean they won't have to. We may not want to pay Whole Foods' prices for organic food, but if we value not being poisoned by agri-pesticides, we will.

As many previous posters have pointed out, those who value your content, whether you're the NYT or the Prairie Weekly, will pay for it. If they don't value it enough to pay for it, you have a product-desirability (or positioning) problem no different than that of unsalable cars or clothing.

One content model that has been successful for many years is the Harvard Business Review. They publish in-depth analysis of significant business issues, with a lot of it free stuff on their site. Yet many people willingly buy a subscription to retain access to the HBR archive. After all, while I may enjoy reading it, I don't necessarily have an important use for all their brilliant content TODAY. They sell PDFs of the articles at a piece rate that ranges from $3 to $5. When I'm dealing with that problem or challenge, and my Google results reveal that HBR has weighed in meaningfully on the topic, I want their info. What's a few bucks at the time? The Internet has changed distribution, but not economics: It's still all about degree of demand, which always translates into pricing power. Some products/services/business have it; most don't.

Most of the definitions of "timely" have referred to "immediacy" in the sense of "fresh, current, just happened." I submit that a much higher value attaches to "EXACTLY WHEN I NEED IT MOST." I'll argue that HBR's track record suggests that I'm not alone.

Re: Monetize The Audience, Not The Content

Florent Peyre — Mon, 27 Jul 2009 13:35:17 -0000

This is a very interesting model: the section-subscription. I'm facing the same problem with the NY Times where there's a lot of their sections (personally it's going to be Automotive, Sports etc.) that just don't work for me.
If I could subscribe only to the ones that bring value, I'll probably be even more encouraged to pay for it.
And would welcome a reduction of my print subscription for that matter...
Obivously, the tough piece on the print side is that the NYTimes sells the total audience as a rate base. If you start segmenting your subscriptions, the print sales team will have a tougher job selling what's already abusive rates...

Re: Monetize The Audience, Not The Content

nkannan — Mon, 27 Jul 2009 13:27:32 -0000

Fred,

I tried their pay-for-op-ed pieces and thought they should have tried a single-payment annual subscription approach rather than trying $ for access to premium content piece-by-piece.

In any case, you may be quite right. Interesting times for print news media.

Nat

Re: Monetize The Audience, Not The Content

Jason Preston — Mon, 27 Jul 2009 13:19:21 -0000

I know I'm a little late to this blog post, but I have to add that I love the FT.com model, and I've been calling it "metered content," and promoting the idea on Eat Sleep Publish for some time.

I think that I've made my best argument for it in this response-to-TIME post called How To Really Save Your Newspaper: http://eatsleeppublish.com/...

The upshot is that adopting a metered content model allows you to have your cake and eat it, too; you can control the distribution of your content, monetize both your audience and your content, all without stifling the discussion that arises naturally around news. Genius.

Re: Monetize The Audience, Not The Content

fredwilson — Mon, 27 Jul 2009 13:03:33 -0000

Its a step in the right direction but I like the FT's model better

Re: Monetize The Audience, Not The Content

fredwilson — Mon, 27 Jul 2009 13:03:32 -0000

I think it depends on what your objectives are. If you want to reach the largest audience, then you have to give a lot away for free. Even if its your best stuff