|
|
 |
 |
An inside look at how content payment models and systems are evolving in an era of rapidly changing markets and publishing requirements.
|
ContentBloggerTM - Content eCommerce |
|
|
| Monday, January 26, 2004 |
Paradox of Choice--It's a Pricing Jumble Out There
A recent book by psychology professor Barry Schwartz, titled The Paradox of Choice: Why More is Less, has received a good bit of media attention. I saw Professor Schwartz interviewed on The Newshour with Jim Lehrer on PBS in December and immediately connected Schwartz' observations and research to what I see occurring in the field of pricing for professional content. There are so many options open to publishers at the present time, that most seem to be falling into the "choice overload" trap that can make you question the decisions you make before you even make them, it can set you up for unrealistically high expectations, and it can make you blame yourself for any and all failures. In the long run, this can lead to decision-making paralysis, anxiety, and perpetual stress. [From the book description on Amazon.com.]
In fact, the glut of choices goes beyond just pricing options; nearly every product marketing decision would be paralyzed by indecision if every option were debated. What content for what audience at what price point in what format with what archival and redistribution rights through which channel are just a sample of product choices that spring to mind. Add to that new developments in online advertising, coupled with a resurgence in ad spending, which have created even more monetization options for digital content and the permutations and combinations start multiplying exponentially. Content management systems, XML, e-commerce systems for content that allow for a wide-range of pricing options are all important improvements in the production efficiency of digital content. Nonetheless, along with the productivity benefits, these technical developments create more opportunities for slicing and dicing content for a growing number of platforms, channels, and applications, which leads to the "more is less" paradox.
So, to avoid paralysis in this article, let's focus on just the pricing options for archival content. Currently, there is an odd mix of pricing available for the same content, depending on where you look for it. An article downloaded from commercial online services like Dialog or Lexis-Nexis costs upwards of $3.00. The same article may be available on the Web for free. Or, the article may be available only to subscribers on the Web. Perhaps the article can be accessed for a fee to non-subscribers. Then, there's ad-supported free access, registered user-only access, hybrid models where an article is free for a short period, then walled off in a for-fee archive when it ages. The list goes on....
What is most perplexing about the current jumble of prices is that very little emphasis seems to be placed on the value of the content, rather pricing policy seems to be dictated by following the status-quo that often developed due to past technological constraints. In the early days when print was the only medium used by original publishers for distributing their magazines and journals, a fee was associated with providing a reprint of an article, because there were costs involved in copying and distributing the physical copy. When electronic access became available via commercial aggregators in the late '70s, essentially all articles (abstracts only in the earliest days) were archival, since they were by-products of the print publication, and had to be rekeyed and formatted. Aggregators naturally charged for their services. But, flash forward to January, 2004, with original publishers posting their articles on their own Web sites, the same logic for charging for articles from past editions doesn't hold, yet it seems to be the norm. Ironically, some publishers are offering free access to archival content via services such as LookSmart's Articles service, even when they charge a fee on their own site.
So, how can an individual publisher, whose content can be found on its own Web site, as well as through a variety of channels, make sense of which pricing tactics produce the best results? The quick answer is: it can't--not with the current melange of options available. However, as the rationale for working with aggregators shifts to finding a partner that can provide the tools to merchandise the content effectively in an online medium (see John Blossom's analysis on Content Aggregation Models), publishers should make it a priority to reevaluate their current channel partners to determine if their channel partners are adding value to the content or creating pricing conflict.
In keeping with the theme of this piece--choices, new aggregators such as KeepMedia and the newly renamed HighBeam service, formerly known as Alacritude, offer additional options to publishers who want to monetize their archives. Then, there's Prism Media Network's Concert service, which uses archival content in a contextual ad service.
There's no doubt that options abound for publishers. In future entries of this Content eCommerce Weblog, we'll continue to track developments that provide monetization options to publishers and focus on providing a compass to lead publishers though the eCommerce jumble. I'd like to hear from you to learn what choices are causing you the most pain in this time of "too many options". Write to me by clicking on the link below.
|
|
posted by Janice McCallum at
7:27 PM |
|
To top
of page |
|
|
| Friday, January 16, 2004 |
Newspapers Recovering, But Some May Miss Out on Major Growth in Online Classified Advertising
The Wall Street Journal Online [sub.req.] reports that analysts expect most newspapers will post profit increases when quarterly earnings reports are made in the coming weeks. Given the general upturn in advertising expenditures in the second half of 2003, it would be a surprise if newspapers' profits did not increase in Q4 2003. The article points out that lower interest rates and tax rates also contribute to the expected improved bottom line for newspapers.
Earlier this week, Borrell Associates Inc. released a study that finds that job recruitment advertising is moving away from print to online services. Newpaper print job classifieds still account for about 2/3 of the total US market, but as the share of recruiters' expenditures devoted to online continues to increase, who will get those dollars? Monster.com and HotJobs.com (owned by Yahoo!) are the leaders in online recruiting. Newspaper companies are wisely creating partnerships with online recruitment sites, such as the WSJ's CareerJournal and NY Times Company with Careercast.com, and Gannett, Tribune Company, and Knight-Ridder with Careerbuilder.com. But, are they doing enough to retain an important source of revenue that has high profitability?
Local newspapers, especially the Sunday editions, have a longtime reputation for being the place to look for regional jobs. But, that reputation can change as job seekers and job listing companies discover the advantages of online recruitment sites, most notably the ability to search by a variety of parameters, and the ease of posting a listing. Advertisers want to know that they are reaching the right demographic. With online career sites, the expectations are even higher, since the reach goes beyond the local market. Newspapers need to find a way to continue to leverage their position of strength within their local (or vertical) community in order to attract employment advertisers. Cross-promotion between print classifieds and online ads that provide more information and functionality (such as applying online) is one obvious route. Additional promotion on the online version of the newspaper is another route. To maximize the benefit of exposure on the online newspaper site, it is important for the newspaper sites to maximize the number of visitors to the site. Which brings me to the real point I wanted to make:
Newspapers need classified ads in order to have a viable business. In order to have a successful online classified business, newspaper sites need to attract a wide audience of visitors (especially regional visitors), who continue to think of the newspaper, whether print or online, as the place to go for job listings. In order to attract a wide audience, newspaper sites should offer local news and features without a subscription or per-article fee.
Note this doesn't mean that local newspapers shouldn't offer special features or services (e.g., fantasy sports games or detailed statistics on local sports franchises) for a fee. But, local newspapers fit squarely into the "broadcast model" that was introduced by Shore in the Contextual Ads paper. As described in the paper, publishers in the broadcast model segment should focus on building a large, loyal franchise in their region (or vertical) that they can monetize through advertising and sponsorships. With online advertising growing faster than print advertising (which is declining in some B2B segments), the opportunities are there for online newspapers to grow their businesses. But as Rich Gordon says on the subject of paid newspaper sites on Poynter Online E-Media Tidbits, "Go to a subscription model if your primary goal is to protect your existing [print] business. ... Over the long term, though, it guarantees a shrinking franchise."
|
|
posted by Janice McCallum at
7:07 PM |
|
To top
of page |
|
|
| Thursday, January 08, 2004 |
Micropayments Gaining Acceptance As Digital Content Currency
Any eBay buyer or seller knows how popular Paypal has become for settling small online transactions. The popularity of Apple's iTunes service, which charges $0.99 per downloaded song, has helped accelerate interest in the market for low-cost digital content. Peppercoin, a newcomer on the scene, is benefiting from good timing and effective PR [sub. req.] in introducing its micropayments transaction system in late 2003.
With new micropayment options from PayPal, which charge a lower fee per transaction, along with the new offering from Peppercoin, as well as systems from Yaga, BitPass, and others, content providers can now consider micropayments as a viable option for low-priced content segments.
Peppercoin's CEO, Robert Kiburz, says in a Boston Globe article: "The lesson from the last several years is people generally don't want to deal with prepaid plans. It's dead money." I disagree, although the form, ease-of-use, and content options certainly affect the success of pre-paid plans. Has he heard of pre-paid phone cards? In fact, I think sponsored pre-paid plans may be the magic bullet to drive usage of micropayment systems. Pepsi is about to sponsor 100 million Apple iTunes downloads in a massive promotional campaign that will be kicked-off (pun intended) with a SuperBowl ad on February 1. What a great way to steer music downloaders to the Apple iTunes site. And, what a great twist on standard publishing business model for advertisers. Now it's: "buy the product, get the associated content (of your choice)" rather than "buy the content, get subsidized by advertisers whose products you may or may not be interested in". The advertiser (Pepsi) adds a benefit to buying its softdrink (the chance of getting a free song).
As more and more content is made available in small segments, and more software is provided as Web services, we can look ahead to more creative packaging and sponsorship of digital content and services. It's not too far-fetched to imagine that what we purchase at the grocery store or the office supply store may determine the size of the balance in our micropayment account.
|
|
posted by Janice McCallum at
5:17 PM |
|
To top
of page |
|
|
To top of page
 |
|
|
|
