Paid Content: The latest trend?

One great thing about history, it keeps coming back around. In the early days of the Web, there were a number of paid content plays. The Wall Street Journal was one of the only successes. Or was it? has survived, that's for sure. And Yahoo! is making a big push into converting their users into paid areas, as are many other sites.

But I really question whether this is going to be a short-term fix. It seems more like a gradual, long haul. Because for all of the talk about paid content models, most of them are either small or in the experimental mode.

I believe that real success in paid content is twenty years away. That's right, two media generations from now (a media generation being ten years), when today's 8-13 year olds have their own budgets and are in their prime. I believe that in order for paid content to survive, two things are needed. One being the right frame of mind and the other being the right price.

The frame of mind is being established right now for tweens. They or their parents are buying MMOGs (online multiplayer games) that require an ongoing subscription to play online vs. others. This generation is also big into downloading individual songs and will soon be paying $1 a song to download their favorite cuts if they are not already. So by the time this groups gets to maturity, they will be as used to paying for online content as we are for magazines. The current generation of adults is conditioned to getting the Web for free and the sites are going to have to drag consumers kicking and screaming into the paid content arena. It involves changing a habit, which is not nearly as easy as it sounds.



The other is the right price. What do you pay for magazine subscriptions? Many are available for $15-30 per year. And the publisher gets much more than the original subscriber via passalong copies averaging 3-5 per issue. And while some cost more, they are targeted and have great, ongoing value to the subscriber. I believe that there is great resistance to anything priced over $5 a month. Zagats wants $15 a month for their online access. Give me a break! I'll buy the book, thank you.

As for, which many like to refer to, there is no question that they have done well. But they are not the big reach vehicle that they are in print. Both CBSMarketWatch and (and many other business sites, not to mention the finance and business sections of the portals) are bigger than So, if you want reach, is not the first place to go. In the print world subscriber success usually equals advertiser success. Not so in the online world.

Content is king. Paid content could rule eventually, but don't look for it to happen overnight. Old habits die hard. Especially when you are trying to get somebody to pay for something that has previously been free.

(One of the great things about writing these articles is that when you are right, people tell you and when you are wrong, you get the right data, so fire away!).

David L. Smith is President and CEO of Mediasmith, Inc.

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