Re: Will They Pay? Part II

From: John Gaskill <jg_at_info-central-usa.com>
Date: Tue 29 May 2001 11:46:04 -0500

MICHAEL MARTINEZ <michael_at_xenite.org> WROTE:

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

Reality is today only and the past.
Tomorrow is what we plan for.
It is unknown and subject to change.

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

Agreed. But many are. I can't give you a specific
number because I have not surveyed the web to
find out. I suspect the number is in the thousands,
but I doubt if there are a million subscription sites.

>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.

I'm glad you are finally getting on board. As many of
us have stated before, the key to paid subscriptions is
the quality of the content offered by a site. Unique,
high quality content improves the chances of a site
getting paid for what it offers.

>>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.

It strikes me as understandable that the operator
of a site offering entertainment information (not porn) might
believe the world at large is unwilling to pay for that same
information. That strikes me as reasonable, especially
when the same site offers items in that entertainment category
to be purchased by web surfers.

>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.

Consumers on the web are educating themselves and as
the many early credit card scams and ripoffs decline in
number (thanks to better encryption and public awareness)
more and more people are learning to buy online.

>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.

Better for all to have them come in, try to charge, fail and
go out quickly than to have them believe that somehow,
at some time in the future, they will all become profitable
if the internet mantra changes.

>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?

Nothing I've seen indicates the meltdown is behind us.

I'm still waiting for a few more players to fall.

But, for those who remain, they don't need 90% to
survive. They need to get past their break even point.
If their offerings are priced to break even at a one
percent subscription rate, many may be surprised in
finding that a larger percentage of their audience is
willing to pay than they had imagined or you are
alleging.

>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.

The internet is about serving niches. If you develop a
product or service that helps people in some niche do
more, better, have more fun, etc., they may be willing
to pay you for it. To reach that audience one must
market and advertise. They won't just fall off the turnip
truck in front of your door.

>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.

Sites which are selling products are unlikely to be able
to charge for content because they are not offering
content -- they are offering products.

>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.

That is a function of advertising and brand experience,
something people got by spending money at Amazon and/or
maybe elsewhere.

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

One doesn't have to be an early bird to reap the
benefits of paid content. One doesn't have to
have 90% of web users willing to pay in order to
charge.

One does have to offer real, unique content that
people are willing to pay for in order to profit from
the paid subscription model. And that takes work
all by itself. The paid subscription model is not
about hope or "sometime in the future," it is about
the reality of hard work today; knowing that in the
reality of yesterday, people have been willing to pay
for lots of things in the real world, and recognizing
that people have to enjoy some benefits of the
same caliber experienced in the offline world to get
them to part with their money in the online world
today and in the unknown future of tomorrow.

Regards all,

John

John Gaskill
jg_at_info-central-usa.com
Beta Testers Wanted
Please sign on at: http://Info-Central-USA.com







Received on Tue May 29 2001 - 11:46:04 CDT