This past week, the New York Times announced that it will move to a paid online model in 2011 to augment its display advertising efforts and declining print business. No one was really surprised by this announcement, and in fact many Times readers (yours truly included) support the experiment.
What was somewhat surprising, however, was recent news that online video companies (YouTube and Hulu specifically) are pursuing paid strategies as well. These developments definitely raised some eyebrows of those who watch the space. With online video consumption growing substantially in 2009 and spending continuing to grow at an outsized rate, why would media companies potentially stunt this momentum with pay walls?
The simple answer is: at this point, to deliver the content and pay creators and owners fairly, it looks like they're going to have to. Three major announcements this week alone support this notion.
YouTube announced that it is rolling out an online film rental service, starting with five Sundance titles. This is a major win for independent filmmakers, who can now have the ability to have their films widely distributed and get paid for their efforts. But the two major questions are, will users pay -- and will this lead to a model that the major studios will embrace?
Rumors of a paid model for Hulu have persisted for months. The LA Times reported this week that a potential structure may offer recent TV show episodes for free, and past shows will be accessible for a modest $4.99 monthly fee. Is that the best way to go about it, or would the opposite way -- charge for new shows, and give the old ones away for free -- actually work better?
Finally, Boxee officially announced that a payments platform is in the works for a summer 2010 rollout. Boxee's is similar to Netflix's successful on-demand model. Content owners will be able to charge whatever they wish for viewing of shows or films, with Boxee receiving a commission for the transaction.
It's early in the year, but this certainly looks like an emerging trend. The two biggest questions that remain: Will users be willing to pay for their desired content, and which of these models will win?