Six Pixels of Separation - The Blog
December 30, 2010 3:09 PM

Content Pays

Here's a newsflash: people will pay for content online.

You may think that the statement above runs contrary to everything we know about the Internet. From music and the torrents to pay walls at newspapers and magazines. Mostly, the people who are complaining that consumers will never pay for content are the ones who are simply taking their content from its traditional form and migrating it to the digital platform. Beyond being able to deliver true value online (more on that here: People Pay For Value - Their Value, Not Yours), consumers have not really felt the need to pay for content.

But all of that is changing.

Today, MediaPost ran a news item titled, Pew: Two-Thirds of Web Users Buy Online Content, based on Pew Internet's latest report, 65% of internet users have paid for online content. Here's what we've learned: "Among the 15 categories the study asked about, music and software were the most commonly purchased types of content, with one-third of users having paid to download or access each online. Those were followed by mobile apps (21%), digital games (19%), newspapers, magazines or articles (18%), videos, movies, or TV shows (16%) and ringtones (15%). E-books, which have gained popularity with the emergence of Amazon's Kindle and other e-reading devices, have been bought by one in ten Web users to date. A quarter of Web users have bought only one type of content and a majority (61%), three or less."

It's just getting started.

While this was the first time that Pew surveyed people about paying for online media, this particular finding "roughly matches the proportion that pay for tangible goods online like books, CDs or clothing," says the research company. There are many mitigating forces at play here. Although it only ranked at 21%, mobile apps and the app economy is probably one of the bigger reasons people are getting more and more comfortable with the idea of virtual goods. Having access to something useful anywhere and everywhere (and this includes in the palm of your hand) is a big (and still relatively) new idea. The smaller the devices, the more portable they are and the more simple they are to use (re: ubiquitous), means the more value there is in paying for content.

Think about it this way...

If you can now buy a magazine subscription, have it downloaded to all of your devices with ease on the day of publication (sometimes earlier) and then be able to go through it on a myriad of devices (computer, laptop, smartphone, tablet, etc...) the ease of access adds a valuable premium to going down this digital route. Couple that with the ability to have countless titles on one small device (and not creating stacks of paper at work and at home) with a highly interactive experience embedded within it (live links to to everything that is being discussed and multimedia extensions and additions through bonus audio, video and images), and you can better understand this big shift that Pew is talking about.

All media must be digital.

There's no lie there, but all media that wishes to extract money from a consumer must do much more...

  • It must be mobile.
  • It must be asynchronous.
  • It must have added multimedia value (bonus material).
  • It must be easy to access.
  • It must be easy to download/stream.
  • It must do more than simply being a digital version of the traditional platform.
  • It must be able to make itself more shareable, findable and social.

Where there is value, there are consumers willing to pay for it.

*UPDATE: here are two new Blog posts that are directly related to this topic that well-worth checking out:

By Mitch Joel


Comments Comments Feed
  • Hi Mitch, a great post and a great blog.

    What you share here (and in the other post about paying for value) is very commonsense, but so many people are doing it the other way round. It is still a long way to go to make them understand, but maybe it's just better for those who already know (in terms of competitive advantage).

    All the best from Poland.

  • Posted by Simon
    Mitch Joel

    Interesting post. Undoubtedly, music, apps and - to an extent - computer games have jumped the perceptual barrier to become acceptable to the mainstream. Despite the 18% figure however, there is still a big barrier to jump before print subscriptions will be accepted by the masses. They retain that level of tangibility (and mobility - folding up in a bag or lying on a beach is different to transporting an expensive e-reader) that will be hard to trump with digital media's strengths.

  • Posted by Richard
    Richard

    I believe that one of the reasons people will pay for content is convience. If you understand how easy it is to buy something from iTunes and have it straight away in a consumable form, that's a huge attraction for most people. Contrast that with having to find it on a torrent site, choose a file to download, wait, transfer it to your media player etc. Most people will find that too difficult.

    Kudos to Apple, they have reduced a lot of barriers to consuming digital content so that busy people will be happy to make small payments to get their content. It's convient and people will pay for convience.

    • It's not just Apple. Look at Kobo, Amazon and many others. I frequently find myself in a book store window shopping but buying at the same time (off of my iPhone). I'd hate to see the retail debate there about attribution ;)

      • Posted by Richard
        Richard

        Indeed, other organizations have done great things - it's all about removing barriers to make the consumption of paid content easier than free content.

        eBooks are totally interesting. I would argue, given today's technology, ebooks are more convienent than paper books. They are easier to make notes in, you can carry many around with you at one time and easier to search through. Now add to that the ease of discovery and purchase, it's a very attractive form of content to purchase.

        Amazon has done a great job in building a buy-consume-manage platform around the Kindle and Kindle reader software. Their decision to support Kindle ebooks on all platforms from the iPhone, iPad through to the Kindle itself was inspired - build a platform not an ereader!

  • Mitch Joel

    You reminded me of the first time I used the Kindle store on Amazon to buy a book for the iPad reader. Having the content always available on my iPad and iPhone, always sync'd, included bookmarks and comments, that's something I personally consider invaluable.
    I am often reminded of how printed press is doing badly nowadays, and quite honestly I think most publishers are struggling to find a new place in the new digital content era. Those who did are facing a new source of profit, and people who didn't regularly buy books before are doing it more less regularly.
    Innovation drives content fruition.

  • Mitch Joel

    I have been thinking a lot about these issues so your post is timely for me and thought-provoking. I think you're right but the angle I've been thinking about is scale.

    I can certainly see how the New York Times or the band U2 or Apple can consistently create content that checks all of the boxes you have here. But is this really available to an individual author or artist? Can this model be profitably deployed by an individual entrepreneur trying to compete with Avatar-type content coming from major corporations?

    You've helped crystallize some of my thinking in this regard -- blog post coming soon!

    • The good news is that the tools and platforms are readily available. I don't think it's going to be easy for the non-superstars, but it never was. Prior to these channels the gatekeepers (traditional publishers) really had a lock on what the public had access to. Now - in a world where anyone can do it - the question becomes how do we filter all of this?

  • Posted by Jean
    Mitch Joel

    I'm very new to all of these but can already see that being able to purchase & quickly access content is clearly the way of the future. I love the fact that I can directly buy things like an operating system from Microsoft, download and install it. I don;t need to wait and it's also much greener, no packaging, no UPS truck burning fuel to deliver it to me, there's also the added benefit of cost savings which savvy companies pass along to consumers.

    Thanks for pointing out something really important that so many brands are missing!

  • Posted by Tom Owens
    Mitch Joel

    Glad to see you added meaningful subject lines to your daily e-mails. Much appreciated. Cheers.

  • Mitch Joel

    I think permanence should be added to the list. In particular when I think about books and ebooks, my anxiety has been about accessibility to my margin notes.

    With my printed books the risk is lending it to someone and not getting it back, or a house fire. Both improbable. I'm highly organized in the physical world. Although my notes aren't searchable, there's a system in place for quick referencing. (You should see what I've done to my copy of Six Pixels.) With ebooks (and digital files in general), I feel highly disorganized. Even with search, I don't get the sense of the quantity of notes and context, number of books read, or hierarchy of importance (There's no big font, doodle in the side--all digital notes feel of equal visual weight). My digital files also feel less permanent. Where do I store them? What happens as file formats change? What happens when Amazon wants to pull the book back, no warning?

    I'm totally in agreement with your post. I frequently pay for online content. I'm just lacking the satisfaction of permanence in these purchases. I don't yet know what to do with them so I keep them all, whereas with books, good ones stay, others get passed on. All the apps on my phone, they never go away, I don't sync ones I don't want but they just remain. It's like having digital garbage orbiting me.

    So my addition to the list (which I'm having trouble articulating) is:
    It must be well behaved

    (Does the file behave as I want it within the scope of how I want to interact with it.)

    Thanks for this post Mitch.

  • Posted by Wolf Pascoe
    Mitch Joel

    What Mitch said. Would anyone reading this post who knows anyone with clout in the NY Times marketing department please forward it to them? I love the NY Times and get a lot of value out of it for free on their website. I would gladly pay them something reasonable for their content IF I could have it wherever, whenever, and in whatever form I want. I hope they get this before they go broke.

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