Nearly everyone in the newsmedia industry has weighed in on the debate of paywalls, metered models, and/or free versus paid content online. As I have watched, listened, and participated in the debate, I came across an interview with Mark Cuban and his candid response to this very question. In a few seconds, he framed the entire debate in a way that makes perfect sense.
The question is very simple: What is your strategy or endgame for payment for your online content?
When it comes to online, I suspect the word “strategy” coupled with “online” is an oxymoron to most newsmedia companies. With great intentions, I suspect most of us just started placing the content online years ago without any real online strategy or endgame, other than hope. I would submit that hope makes a very poor business strategy.
At first, that wasn’t much of a problem because the online frontier was quite slow and cumbersome. Speed forward a few years, however, and the introduction of broadband and other higher speed connection options made the Internet much more navigable at breakneck speeds. Now it actually makes sense for tech-savvy youngsters and even those in middle age to read much of their news online, on tablets, and even on smartphones. The inadvertent trap had been sprung, our content was free, and the audience had been trained that free was the name of the game.
The Facebooks and Googles of the world have a viable online strategy based on hundreds of millions users and page views each day. Even at a penny a click, hundreds of millions of clicks add up to a substantial cash flow. It should be pointed out that even with this model, it took them many years to monetise that massive traffic. Most newsmedia companies, while carrying a very strong presence in their local markets, will never see the amount of proportional traffic to make buckets of money using that penny-a-click method.
That leaves two additional sources of revenue. First, the new and expanding digital frontier, which in many ways is a replay of the online game we lost years ago. Hopefully, we are smarter this time around and dive in to the innovation fray quickly. Second, the option of paid content. Realistically, we can add a third option, and that is a mix or hybrid combining all three of the above methods.
Newsmedia companies don’t have many more years to get it right; the window during which we can incorporate strategies for capturing online revenue is rapidly closing.
Back to Mark Cuban’s comments. Giving away your product for free is foolish if you have no viable way to be compensated for that content. We have tried for 20 years to rely on sheer traffic to bring us the dollars that never materialised. Once most newspapers charge for that content, those wanting the content will be forced to pay or forgo that information. As Cuban suggested, we need to find our audience, even if it is ultimately smaller, and then cater to it aggressively and at a price.
But then the million-dollar question must be asked: Have all the holes in the ship been plugged? If every newspaper in the country had a meter or paywall, but we still continued to provide all the information to the Associated Press and similar organisations, would we really solve the entire problem? All that information, unless we hold much of it back, gets fed to our competitors to be used in their various media broadcasts and feeds. I guess we have to cross the first bridge, however, before we worry about the second.