• by P.J. Bednarski , Staff Writer @pjbtweet, July 12, 2013

A fun thing to think about:  What if watching an online video—let’s say a movie or an episode of TV show—cost you $1.99 a crack?  OK. Big deal.  

But what if your price got lower as more people watched?

That’s sort of the idea floated by John Battelle, founder of Federated Media. I saw it first on paidContent.org.  which liked the logic. You pay, but the price potentially gets cheaper, for you and others, as more people watch. That gives you an incentive to hook your friends into watching the video too, giving social networks a role in the economic model.  Maybe this form of crowdsourcing makes sense?       

PaidContent’s Mathew  Ingram would like to see somebody try it: “It’s pretty obvious what the benefit of this kind of model would be for readers, but would publishers want to embrace it? They might get more social engagement because of the incentive to share — and they might be able to convince advertisers that a more engaged and paying audience is more desirable, and therefore should cost more. But I think the biggest problem with the group-buying idea is that it goes against the traditional economic principle that when there is more demand for something, the price rises.”

On Battelle’s blog, he’s playing with the idea of getting Website users to pay for an imaginary article at Esquire. com, but the concept could easily transfer to a piece of video, especially--perhaps only--for more esoteric video, or investigative journalism pieces.

Here’s Battelle's basic pitch:  “Perhaps a model could work like this: The piece costs $1.99 for the first 5,000 articles sold, garnering $10,000 in revenue (Ok, $9,500 for you sticklers). Once that threshold hits, the price adjusts dynamically to maintain at least $10,000 in overall revenue, but adjusting downward against the paying population as more and more readers commit (which also earns Esquire additional advertising revenue). A “clearing price” is set, perhaps at 50 cents, after which all profits go to Esquire. In this case, the clearing price kicks in at 20,000 copies sold – everyone would pay .50 at that point, and it’s a win win win for all.

He also factors in advertising, which, in theory, you’d buy into. The ads, I suppose, could be as “premium” as the content somehow.

I like the idea.  And I think it could work. But in my opinion, the resistance to paying for content is not insurmountable anyway. It’s just that the product being offered is often not very enticing.  Actually, a generation of Internet consumers has become a pretty easy touch. Users already pay for lots of stuff they could get for free.  

At the same time AdAge writes about  a “soft pay wall” some Websites are now experimenting with, in which users are asked to “unlock” certain videos by watching an ad first. For me to watch a sexy video piece on Maxim.com, I first had to watch a 15-second commercial.

This doesn’t sound very radical to me; I’m often forced to watch commercials before I see lots of videos. The difference with this thing, called Content Unlock, is that by agreeing to see one ad, I’d see a somewhat longer piece of content. In my case, Maxim got me to watch a 15-second  commercial for Acura. In return, I got to see a collection of  women deliberately wearing “sexy skin-tone tops,” which, frankly, was a wildly oversold photo clip job.  

Mark Yackanich, CEO at Genesis Media, which is testing the service with a few well-known Websites including Maxim , Guitar World, Radar Online and USA Today Sports Media,  tells  AdAge,  "In effect, the brands become sponsors for a readers content consumption, in a very direct and memorable way."

It’s not a very radical solution but not all solutions have to be. Maybe essentially explaining the transaction—explicitly telling the user that watching the ad pays for the content and perhaps more of it—is better than not.

pj@mediapost.com