RE: Will They Pay? Part II

From: Michael Martinez <Michael_at_xenite.org>
Date: Tue 22 May 2001 09:32:56 -0500

JOHN GASKILL <gm_at_info-central-usa.com> WROTE:

>There seems to be a desire on the part of some list
>contributors to convince the rest of the list that so
>many people who surf the internet are unwilling to pay
>for content that a web site operator may not charge
>for content and be profitable.

Very politely stated. I could just as well say that
"there seems to be a desire on the part of some list
contributors to convince the rest of the list that so many
people who surf the internet are willing to pay for
content that a web site operator may charge for content
and profitable."

Let's look at reality, which comes in two parts: where
things stand today, where they may stand tomorrow.

Today, most Web site operators are not charging for
content.

Tomorrow, most Web site operators will not be charging
for content.

Maybe tomorrow's Web site operators who charge for
content will constitute a larger percentage than today's
operators. If so, the question really becomes "How do
people who are not charging for content now get into
that increased percentage?"

There will be no universal answer, except in the most
generic sense: you have to have content that people
are willing to pay for.

>In fact these reports reveal that increased numbers
>of people are paying for online content, aside from their
>internet access subscriptions. That is the first step.

In fact, these reports argue strongly that subscriptions
for content are not within realistic reach for most Web
site operators. If you're going to market products and
services to online consumers, you have to HAVE online
consumers. All the gimmicks and wishful thinking in the
world aren't going to change the fact that MOST PEOPLE
ARE NOT BUYING STUFF ON THE WEB.

If you can convince more people to buy stuff on the Web
(and I buy goods and services online all the time -- I
don't need convincing on that score), then you can work
with a larger potential market for paid content.

But right now the pie is very small. And if more people
jump into the game thinking, "Oboy! We can charge for
content! We'll make enough money to keep the doors open."
They are in for a RUDE awakening.

The dot-com meltdown is barely a few months behind us
and already we're hearing new sermons from the bush
preachers about how salvation lies just over the hill.
Who is going to pay for all this content, since 90% of
today's market is unwilling?

The world's economic elite is now mostly online. The
rest of the world may come online in the next few years,
but they're not going to be able to afford to pay for
content. So, where is the money supposed to come from?

And what is the content which is so vital that millions
of people need to pay for it? I can read newspaper
headlines for free when I visit the local convenience
store. I sure don't need to pay to read them online.

Where is the market for this online content? Why haven't
more research companies identified it? Why aren't all the
major content providers going after it? Why are people
still scrambling for new revenue streams if the gold mine
is right there in front of everyone, waiting to be tapped
dry by the multitudes?

There will ALWAYS be a few people who succeed in any new
revenue stream, at least for a while. Yahoo! is still
profitable. But now we know most companies are not going
to become big and profitable by selling banner ads. A
few companie are charging for content right now. But
that is not going to become the Way of the Web, nor
even the Way of the Business Web.

Remember, most people don't pay for the catalogues
they can get in the mail from thousands of companies
around the world. Most business Web sites are little
more than online catalogues. If they aren't going to pay
for paper, they aren't going to pay for electrons. They
MAY pay for convenience. We have always (in America, at
least) been willing to pay and extra 50 cents to a dollar
for milk at the local convenience store, rather than go
down to the supermarket and fight the crowds there.

Offer people convenience over the Web and you may get
somewhere. But then, look at online bookselling. Amazon
offered that convenience first. Barnes and Noble,
Borders, Booksamillion, and a hundred other companies are
now offering similar convenience and guarantees. But
Amazon, poor Amazon, is outselling them ALL, combined
(in online sales). People just associate convenience with
Amazon, and not with all online booksellers.

Paid content will prove to be a boon for the early birds,
not the whole flock.


Michael Martinez
 Science Fiction and Fantasy info_at_xenite.org
  Visualizing Middle-earth, a book for all Tolkien fans
    http://www.xenite.org/



Received on Tue May 22 2001 - 09:32:56 CDT