Searching for new models to make content pay online

Companies that sell content are finding themselves under tremendous pressure. Old revenue models are crumbling before our eyes, their demise seems to be accelerated by the recession and we are grasping for new ways to monetize content. This is especially true for newspapers, which have been failing at an alarming rate this year.

Chris Brogan [1] wrote a blog post this week called "The Next Media Company [2]," in which he outlines his manifesto for a new media company, and throws down the gauntlet to challenge others to build on his initial brain storm. I would like to take up that challenge this week and discuss how content providers can find ways to make money online.

Content has value

Let's start with the notion that content can have value. It's not as simple as it seems in a day when so much content (including this newsletter) is available for free, but there is an underlying value in free and it can itself drive revenue. Free content drives traffic, which sells ads and publications can make money as they have for the last hundred years.

The problem, as Michelle Manafy [3] (whom we interviewed recently [4]) points out, in in her May column called "News Unfit for Print [5]" in EContent Magazine, is that "the digital advertising model can’t be sustained with less content than we’ve produced in print; it arguably requires more. So how do we make more with less?" Ads alone won't provide the same income, so we need to do more.

Moving forward

For the last couple of weeks I've talked about the notion of micropayments in a couple of posts (including Micropayments certainly won't hurt [6]). I don't see this as a panacea by any means, but it could provide a revenue stream for certain types of value added content, especially when packaged with other desirable content. A few weeks ago, I paid $10 for a music magazine. It included interviews with Little Steven Van Zandt from the E Street Band, interviews with other rock stars, in-depth record reviews and so forth, but it also included an insert with a map of key Bob Dylan dates throughout his career and a CD with songs chosen by Bruce Springsteen. As a package, I thought it was neat and was willing to pay a premium whereas I probably would have left just the magazine on the shelf.

It's possible to package content like this online as well. As I wrote in a comment [7], in response to Daniel Tunkelang (whom we interviewed in our One on One series [8]), what if we offered an interview with Bruce Springsteen online and packaged it with an exclusive mp3? Would people buy it? I think they would. Can we apply a similar model to non-entertainment content? I think we could.

The idea is to provide a package of content that adds value over and above the content everyone else is providing for free. Product tie-ins are nothing new. Burger King is trying to get us to buy Whoppers in exchange for a Star Trek Movie glass. There are ways to apply this same type of promotion online--buy this and get this free.

Finding ways to keep the eyeballs

In a recent post, on my DaniWeb TechTreasuers blog called, "Mayer Says Google Not Responsible for Newspapers' Demise [9]," I wrote about Google's Marissa Mayer's testimony before a special Senate Committee on the future of newspapers. Mayer defended Google against critics who suggested it was Google's success that was fueling the failure of newspapers and has limited their success online. Mayer suggested publications weren't doing enough to understand online models when she said:

"When a reader finishes an article online, it is the publication's responsibility to answer the reader who asks, "What should I do next?" Click on a related article or advertisement? Post a comment? Read earlier stories on the topic? Much like Amazon.com suggests related products and YouTube makes it easy to play another video [9], publications should provide obvious and engaging next steps for users. Today, there are still many publications that don't fully take advantage of the numerous tools that keep their readers engaged and on their site."

She's exactly right, of course. You can't just slap up the content and hope for the best. You have to find new ways to keep visitors on the site, to keep them engaged and to look for ways to make money beyond the ads including specialized classifieds, packaged content, product tie-ins and the free-fee combo, where you give away a taste and hope to sell the package. I like Brogan's ideas around print on-demand copies of publications, and indeed there are companies doing this today.

All politics and news is local

I also believe there is great value in local content. People want to know what's going on in their own sphere of the world and they want to participate in the news. See iBrattleboro.com [10] if you doubt this. News outlets with a local bent can be successful once they get themselves out of the clutches of profit-driven shareholders. Local businesses certainly see value in getting the attention of an audience of local readers. There has to be money in that and, indeed, there always has been.

What's clear is that publishers have been far too complacent for too long and now they are scrambling to build models they should have been exploring for at least the last 10 years. These publications are not necessarily able to achieve Brogan's dream of the perfect model for the new millennium, because they are simultaneously trying to hold onto the old one. Maybe that's part of the problem. Newspapers are like IBM trying to placate the typewriter division while introducing the PC to the world--the device that would render the typewriter division obsolete.

I don't pretend to have any magic answer. I'm just another humble scribe continuing the discussion while watching institutions crumble before our eyes. But maybe the demise of today's models will be a good thing in the long run. Maybe people like Brogan can fill in the void and build new models. The content itself is not dead; the old revenue models are and we need to be creative to find new ways to succeed moving forward. - Ron [11]