Sent to you by John via Google Reader:
Charging for content
Some media outfits chase scale, while others pursue premium pricing
Jul 1st 2010
IS IT better to take a little money from a lot of people, or a lot of money from a few? In Britain the Times and the Sunday Times newspapers are about to take the latter course by asking people to pay for news online. It is a bold move: the Times, which is owned by News Corporation, is a mainstream paper in a fiercely competitive national market. And the paywall it is building is a mighty one that is impervious even to Google's web crawlers.
Paywalls are rising across the media landscape as many firms conclude that revenue from online advertising alone is not enough to make ends meet. The Tallahassee Democrat, a newspaper owned by Gannett, starts charging from July 1st. Hulu, a free video website that was launched in America in 2008, said this week that it would begin selling subscriptions.
Yet there is a strong drift in the opposite direction, too. For every outfit that is trying to build a premium subscription service, another is becoming more convinced of the virtues of giving away free content.
Britain's Daily Mail newspaper, for example, is something of an anti-Times. Its website, which is heavy on pictures and celebrity news, has grown rapidly in the past two years, both at home and abroad. It had 42m unique monthly visitors in May, according to the Audit Bureau of Circulations—more than any other British newspaper website. Martin Clarke, who runs the Mail's website, reckons people simply will not pay for general news on the web, and is happy to maximise viewers and advertising. The model of giving away content is not broken, he says: "It's only broken if you are not big enough."
This is not merely a difference of opinion over whether to charge for online content. It is a divide between a strategy based on "up-selling" people to premium subscriptions, and a strategy based on scale and market-share. More fundamentally, it reflects different views about the extent to which consumers can be steered towards the most profitable products.
This crack stretches all the way from newspapers to the film business. The hot issue in Hollywood these days is whether the studios should sell DVDs to cheap rental services on the same day they put them on sale to the public. Netflix, which sends discs through the post, and Redbox, which rents them from kiosks for $1 a day, have grown quickly. Fox, Time Warner and Universal believe such outfits undermine more profitable DVD sales and video-on-demand rentals. They have "windowed" Redbox, making it wait 28 days for popular films. Disney, Paramount and Sony disagree: a person who wants to rent a film cannot be strong-armed into buying it.
Television is no closer to consensus. Hulu's decision to charge $9.99 a month for full seasons of TV shows and access to the service from smartphones and games consoles is a victory for the premium camp. News Corporation, a part-owner of Hulu, had publicly argued that it should become a subscription service. But cheapskates can take heart. In Britain, Channel 4 and Five have put their programmes on YouTube. Disney, which also owns part of Hulu, now offers many of its broadcast TV shows free on the iPad (Steve Jobs, Apple's boss, sits on Disney's board).
The big media firms are not wholly consistent. Although News Corporation champions subscriptions, it is not yet erecting paywalls around its tabloid newspapers. Disney makes its broadcast TV shows available free but does not do the same for ESPN, its lucrative sports network. Other outfits are fence-sitters that believe they can both take a little money from a lot of people and a lot of money from a few people. But the drift is towards the extremes. Few believe the future lies in premium-ish products and middling scale.
The two camps are likely to grow further apart. Online advertising is picking up, encouraging firms that have hitched their fortunes to it. As others erect paywalls, the audiences for free sites will probably grow. The Times will surely lose online readers when it begins charging. The mere act of asking people to register caused its market share to drop by half, according to Hitwise, a market-research firm. In film, similarly, the Redbox-friendly studios benefit from the reluctance of others to supply DVDs to kiosks, argues Richard Greenfield, an analyst at BTIG Research.
Apple's iPad appears to be speeding the separation. The scale outfits have seized on the iPad as a means of reaching more people and charging high rates to put advertisements in front of them. Although the premium folks appreciate those ads, they view the iPad mostly as an opportunity to sell more subscriptions. At some magazine firms, such as Time Inc, building a paid iPad app is the first step towards withholding some free content from the web.
This lack of consensus worries many in the media industry. Those who pursue scale (and their many allies in the blogosphere) claim that premium strategies are doomed. The other side retorts that the practice of giving stuff away undermines the value of all content. But it is likely that winners will emerge on both sides. Some will find a way of profiting from scale, while others will carve out dedicated audiences and lucrative niches. There need not be a single right way to do things.
Business
Things you can do from here:
- Subscribe to The Economist: Business using Google Reader
- Get started using Google Reader to easily keep up with all your favorite sites
博文
没有评论:
发表评论