End of the Free Content Ride?

Posted on March 18, 2002

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by Adrian Roselli (aardvark)

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Adrian Roselli

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User since: December 13, 1998

Last login: January 03, 2012

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With the boon of the web a few years ago, sites competed with one another by acting like portals, trying to see who could post the most news and otherwise free content possible to keep people coming back. As the portal model has fallen away, and the 'net economy has tightened up, it seems some formerly free sources of information are starting to expect something in return.

Jupiter Media Metrix claims that 42% of online adults are willing to pay for content, down from 45% in August of 2000. However, there are some murmurings that the industry might be moving away from free content regardless.

CNN's decision to phase out free video clips on its new, sports, and financial sites is just one example, following ABC News' example. RealNetworks is selling a SuperPass with a monthly price tag that allows access to multimedia from ABC News, Fox Sports, NASCAR, and even pro baseball and basketball, and they've already garnered some 500,000 subscribers. Salon magazine made that move last year, moving much of its content to a premium service.

Jupiter's report suggests that paid online content will grow to a $5.8 billion industry by 2006, up from $1.4 billion in 2002. They attribute the expected growth to widespread access to broadband, as well as people just buying into the model of paying for much of their content online.

Of course, free doesn't always mean money. More and more sites are requiring registration to access content, making users decide if their personal information is a fair trade. This customer information is a form of currency you can see in places like download.com, where they now require registration to download software.

All valid points

Submitted by Shatai on March 19, 2002 - 18:54.

While all your points are quite valid, you're a little off in concept. The 'Web isn't going into some sort of commercializing shift as whole, retracting into an industrialized marketing hell where X-10 reigns high and Casino on the Net induces fear into the heart of online culture, but it is coming to time long-waited now that businesses would realize they cannot offer any content for free. Services like `Dialpad' are prime examples of stages of this realization. Firstly, Dialpad started as a service providing free Net2phone services, an amazing notion that seemed to only be the root of some form of corporate generosity! The second phase was offering the service on the condition you click an advertisement every hour or so; and finally, at the time of this article's inception, the Dialpad service is non-free and requires payments to use per phone call. Companies like Google manage to amaze me even today, keeping a brilliant marketing scheme with advertisements as well as providing a wonderful, clean service to the public online body. This was inevitable, and, can you honestly tell me that businesses (even by their definition, groups incited to make money) can give out their services and resources for free without feeling the strain and being forced to capitalize completely? Some conditions apply: Free software companies. :P.

Free software companies

Submitted by Shatai on March 19, 2002 - 18:55.

* Even they make money by provided services, and Red Hat makes their link a little out of the way for downloading ISOs, if you've noticed ;).

Paid content? Not in the gaming world

Submitted by Zaccix on March 19, 2002 - 21:13.

Ever since Download.com started asking for registration in order to download, I've stopped going there. Anything I can find there, I can just as easily find on Google.

If a site wants to offer content for a price, then fair enough. However, what I find disturbing is this “push” by certain people in the industry towards paid content. Sites that have absolutely no need to offer paid content are being made to believe that they have to — that it's the only way to survive.

I work mostly on gaming websites, and witnessed the “collapse” of the web advertising industry in early 2001. Many people wondered what would become of sites that, to be honest, they'd taken for granted as always being there. Sites like Blue's News, Voodoo Extreme and ShackNews. They're all still alive and kicking today, albeit with slightly more advertising (ironically enough).

Really, the only gaming web company that fell prey to the panic was Gamespy, who started adding masses of pop-ups, ad boxes and banners to their sites in a bid to stay alive, much to the user's annoyance. Even FilePlanet, their file repository site, introduced registration for downloads, leading many people to go and find their files elsewhere. Actually, an interesting sidenote about FilePlanet is before registration was introduced, people were lazy and depended on going there to find whatever they were looking for. Since registration was implemented, gamers in general have been more willing to find alternative sites to download from.

It all comes down to how loyal people are to a site, and how much they think content is worth. Last year, IGN, a well-known gaming news provider, started their Insider service with the idea of producing “exclusive” content for subscribers. Thing is, that content goes up on the free site anyway after a certain period of time. What's the point in subscribing in the first place?

Gamers are a fickle lot. If one site they go to is shut down or moves to paid content, they'll just go and find another place to get their information from. Quite a few sites went to a paid model last year, and lost a lot of their visitors. They'll say they're growing, but then they would, wouldn't they? If a site becomes unavailable for free, people will just go elsewhere until there are no more free sites, no matter what Jupiter might predict.

I really agree

Submitted by Shatai on March 19, 2002 - 21:21.

The services I listed are not the only ones, and I completely agree with you. The only service that has really annoyed me to this date truly has bee FilePlanet. I'm not going to ever subscribe for their special servers, and I believe personally that they flood their own servers with false lines so it will slow us in our usage of non-pay services.

Versioning

Submitted by isaac on March 19, 2002 - 22:13.

Zaccix, it's all about versioning. It's a marketing concept that can be applied easily to content. Content can be versioned according to delivery speed, quality, price, etc.

Consider the movie industry. Firstly, a movie is released to cinemas where the viewer pays approximately AU$13 per viewing. If that's too expensive, you can hire the movie for AU$6, but only do so some months later. Finally, that same movie is made available (again, months later) no free-to-air television.

Consumers ascertain the value (from marketing/reviews) of the movie to them, and each find their preferred compromise of price vs delivery time. One movie might be worth $13/viewing to me. Another might be worth AU$6 for as many times as I can watch it in a night. Another might only be worth waiting to see on television.

Many finance sites on the net are shifting or have already shifted to a similar model. Content is available in a timely manner to subscribers, and then perhaps 2 weeks later to the freeloaders.

How consumers will respond to approaches by content sites is best investigated on a per-site basis, and should always consider content (and quality of content) provided by competitors.

Perhaps the early move and perceived success of finance sites can be attributed to the direct correlation between price and benefit. What's $29.95/month when you're playing with $200 000 on the share market? Accurate and quality information in such a situation is essential.

RE: Free software companies

Submitted by djc on March 19, 2002 - 22:33.

Shatai, I've noticed that as well with Mandrake since their recent 8.2 release. Even though I recently choose to become a 'Mandrake User', I'm still having problems two days later finding an 'official' place to download the ISO's for this sweet looking release.

Me and a friend had to jump on Gnutella of all places to find the ISO's late today. I totally realize the costs these companies can see in bandwidth costs, but hiding things isn't the answer IMO.

Versioned downloading

Submitted by isaac on March 19, 2002 - 22:40.

DJC - I've heard of some free software providers having the free FTP server on a limited connection, and then a faster service for subscribers. To me, that seems to be a fairly sensible method of meeting obligations WRT the GPL, but also funding the development of the software.

What do you think?

And of course...

Submitted by gnarly on March 20, 2002 - 07:01.

http://www.theendoffree.com/

OUP reference content online at a price

Submitted by MartinB on March 20, 2002 - 09:30.

The Register is reporting that Oxford University Press is putting its entire reference collection online, at a price starting at £175/US$250 (ex VAT) a year.

It was never available free, and the paper versions are much more expensive (but you have them forever). If OUP didn't think that there is an increasing acceptance of paid-for content, then it wouldn't have bothered - this is what publishing companies do - make content available at a price. Don't see why the web is any different.

Re: Versioned downloading

Submitted by djc on March 20, 2002 - 10:14.

I didn't mean to imply that having a 'priority' download section was a bad thing :) In fact, most companies open source or not, have some type of policy like this in place. After some more digging, it turns out the FTP mirrors didn't have a chance to grab the new release before slashdot posted the announcement, otherwise it wouldn't have been such a big deal.. But ya, giving priority downloads has always been a nice idea IMO.

Not buying yet.

Submitted by headlemur on March 20, 2002 - 10:19.

Selling content is not a new concept. Nexus-Lexus in the news world, and a group of realtime stockmarket services have been doing quite well for a number of years across the Internet.

Paying for content is a viable model. It just doesn't work well on the web yet. I look at the Jupiter Media Matrix report with a truckload of salt. The primary reason is that they are not only reporting, but with their alliances and partnerships are being the ad servers as well as the counters. This makes their numbers suspect in the same way the yellow page advertisers do.

Yellow Page salesmen would have you ask customers on the phone how they got your number. The overwhelming majority would say the Yellow pages. Since you and they were on the phone it became a self fufilling prophecy. What they don't tell you is that yellow page advertising is not cost effective, by virtue of the standard behaviour of most folks to start at the beginning of the category, and if you get a busy signal, you dial the next number on the list. Or that your competitors are on the same page.

The numbers and projections themselves are suspect as the rising awareness of cookies, hosts files, banner blockers, pop up killers, and the ability in the newer browsers to manage and block cookies, make any numbers other that the request for service on the server side, in creating and delivering the page, at best a exercise in wishful thinking.

Yet these are being reported as growth in raw numbers. They are not releasing numbers on the other end as to the percentage of new users vs drop in cookie acceptance. These numbers cannot be quantified but indications can be extrapolated by the slowdown in web advertising dollars spent. As other posters have noted, drawing the line on registration as a fair tradeoff for access. With good reason, as the behaviour of most sites has been to take the registration information and sell it to third parties as fast as they can.

I have no problem in paying for content. The problem is finding the content worth paying for. There are a number of avenues being investigated. Slaon's Ad Free Model, which by their own admission is not taking off as well as anticipated. The Wall Street Journal, which is a pay site, period, which is doing extremely well.

The New York Times provides it's excellent content for an email address, with the ability to refuse newsletters or shopping your address to their advertisers, ect. They then charge for content older than 7 days. I would rather pay a subscription and get the latest news, and have access to older content as part of my subscription. Time will tell if this is a viable model. I'm not sure as news is like fish, great when when fresh, but after a few days it will stink.

The other significant point is the 'expected access to broadband.'

This is the stalking horse that is being used by the entertainment industry providing content that is controlled and turning general purpose computers into settop boxes. Service providers want to bring about acceptance of the higher cost of connectivity and the acceptance of charging by the bit for access, in addition to content.

Part of the confusion of fee vs. free is our own behaviour. We each spend money to access the web and post our personal and business websites. In the case of the biz site we hope to get enough business to pay for it and make some money. In the case of personal sites we do it because we can. The payoff here is the odd email saying 'great stuff' or 'your an idiot who should go out and play in traffic'

But as long as you and I publish on the web, selling subscriptions in whatever form they make take is gonna be tough.

Free to fee for content?

Submitted by cgware on March 20, 2002 - 11:34.

Is there's an emerging *trend* amongst our favorite online resources which is sending us a signal? Read more and tell us what YOU make of it by taking a moment of your time to answer our mini-survey.

survey ends: Mar 31 -- results posted: Apr 15.

(tx Adrian for the invite to post the survey

Another thought

Submitted by Shatai on March 20, 2002 - 16:15.

Priority downloads are a great idea for a company with dedicated lines and resources to make some extra money, but if it gets to the point where companies like Mandrake and Red Hat offer a Fileplanet-like service for mirrors, often asking you to register for a members exclusive servicee, I can see myself being one of the people to post a list of free mirrors on Slashdot like those who were oddly moderated as flame bait and offtopic (how is it off topic?). I wouldn't pay for free software of I wish "pushed" into it.

online FastPass?

Submitted by untorqued on June 19, 2002 - 16:27.

Jakob Nielsen has been contiually talking about the looming future of paying for Web content for a few years. His idea, which I quite like, is a system analogous to the FastPass system used in many areas of the U.S. (and elsewhere?) to cross bridges or drive on toll roads: a transponder in the windshield lets you drive through a lane without stopping, and the toll is automatically charged to your account

I'm not advocating some sort of tracking device for Web use. But Nielsen points out that system like this would allow content providers to charge measly amounts per page - 5 cents U.S., for example. Then accessing Web content would be analogous to making long distance phone calls - the charges rack up slowly, and we pick up the phone mindful of that, rather than spending our whole conversation nervous about how much it will cost.

I guess the main requirement that's not yet in place for such a system is a tracking and billing method. Maybe that's what M$ was trying to create with its M$Wallet system, I dunno.

I'm totally into the idea of paying small amounts for good content - the alternative (the current system) is like U.S. television - 5 minutes of program, 2 minutes of commercial, ... ad infinitum. That's not to say that I think creating a secure and private billing system would be an easy task...

collaborative e-commerce

Submitted by vtm on June 24, 2002 - 16:45.

Another way to help the acceptance of paying for content is to use the collaborative e-commerce concept. This is where buyers and sellers act as peers to create an emarketplace that benefits both parites. (Ebay runs like this) Here's a place where photographers submit their images into a common marketplace with prices they set. The system just keeps track of who sold what and pays only the person who sold something. Both buyers and sellers work together to create the marketplace they both want so good products bubble up to the top while low quality products get shut out. http://www.vtechmedia.com/home/photogphoto.asp

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