Monday, March 2, 2009

Would You Pay to Read This?

I recently had the pleasure of listening to Patrick Coyne, editor of famed Communications Arts, give a talk about the history of CA. During the Q&A portion, there were several questions about the consequences of the economy and the design industry. There were several things said of note, but what I want to talk about most is his comment of, since when do people expect information for free? Good point, Mr. Coyne. Is the world turning into one giant public library?!

In context, he began speaking about how online news sites, he mentioned the likes of the NYTimes.com have considered introducing a micro-pay system--essentially, you'd pay for each article read--although, I'm sure they could make it much more complicated with all sort of packages and inclusions than that. But Coyne basically suggested, why do people (consumers) expect labored over content and information for free? CA has always been a pricey magazine, and people pay for it because they know the content is worth it. And they at CA charge a fee because they too think it's worth it. There is an understood value to the product. That seems to be the bottom line: people pay for things that are worth it. People pay for cable, fios, HD-whatever TV hookups even though the internet has many shows and movies for free. Although, usually illegally free. And some honest, ethical people even pay for their media consumption (TV and music) online.

I expect the online as the free medium model currently in place will soon disappear. More sites will offer more content at a high quality for a paid rate. And why shouldn't they? I would much prefer to pay a bit for NY Times journalism than have to get my news from... well, from some place, un-researched, biased and crappy. I foresee that commercial entities will start asking for payment, and more and more people will begin to pay. For example: I pay for Netflix more for the instant online stream of movies than the 1 unlimited movie I receive in the mail. I'd probably even be willing to pay a bit more if their online streaming movies included even more selections and more recent selections. (Did you get that Netflix?) But some users will continue to pirate material, but those numbers will decrease and the action will become very socially unacceptable--the Seinfeld of the future could do an episode about people stealing media off the internet. Eventually the copyright, digital and entertainment laws will catch up with the internet explosion of the mid 90s, and laws will be set in place, and paying for well done, well communicated information will be commonplace.

However, inevitably, we'll pay a low and fair price for our online consumption, and they'll raise the prices (those greedy jerks) and a new technology will come forth that disseminates great information in a new way for free, so we switch to the new technology because we all feel ripped off by the providers of the old technology, until.. yeah you can guess what I think will happen next. But I'm a cynic.

I've noticed this pay system taking root in the design industry. Such "smaller" (I don't know how I'm quantifying that) design reference sites such as PSD Tuts and Web Designer Wall have opened up for shop. (Although, PSD Tuts has always maintained a, you get more if you pay, mentality. Much like the design standards company Adobe and their Layers magazine and information. They give you a little tease but don't expect them to put out without the cash.) PSDTuts and WDW have opened up Graphic River, "a graphic art department at your fingertips," and Icon Dock, a free stock icon site, respectively. Similarly, some of the best design tutorials on the web are from Lynda.com, and yup, you have to pay for them. iStockphoto.com has recently introduced audio files to broaden their market.

I believe this trend is going to continue. Now, some would go so far as to say that I'm cheap. I proudly consider myself thrifty. I don't buy something, unless I really think it's worth it. But I also believe in ethics of creative property ownership, and I pay for media information that I may use in my designs, such photos and flourishes etc. (Just don't ask me about my online television consumption). I'm not trying to throw stones. I'm really not. I just think that people should reassess the question, is the product I'm buying worth it? Do I want the quality of this to continue to be worth it? Because in a few years, you and your wallet will be forced to address these questions.

But be on the look out for this, and I'd be interested in hearing of more examples.

2 comments:

chris said...

Salon.com tried this -- all of their articles were free at first, then in 2001 they moved to a model where you either paid a monthly fee or watched a 30-second ad every day. The net result: they lost a lot of traffic, but they remained in business. I don't think there are any numbers out there that state exactly how successful that transition was for them, however.

Slate.com, their direct competitor, has never charged for access, but then they're owned by Microsoft.

I actually would argue, though, that things are moving in the opposite direction. Nytimes.com originally charged a fee to read their archives, which made sense to me -- they function essentially as a research database, and research databases always charge money for access. But they got rid of their access fees to try to increase traffic and thereby advertising revenue. Hulu is also gaining a ton of momentum, and you don't have to pay a cent there.

Micropayments are a nice idea, but there is one big problem: credit card fees. There's a reason for those signs you see by cash registers that read "MINIMUM CREDIT CARD PURCHASE $5." Every time you pay via credit card, your company takes a flat cut of the transaction plus a percentage. Even asking for a micropayment of $2 (most discussions of micropayments suggest paying less than a dollar) is a losing proposition.

h. van de mark said...

I knew NYTimes had tried and switched, and that people didn't like it, but that was then and this is now. As revenues and ad revenue decrease they'll have to come up with something--what this change in business model will be is anyone's guess.

It's hard to consider because we're talking about multiple types of content. I think we agree about the information content, that people are somewhat used to paying for. But maybe micro-pay won't happen in entertainment sites because they can rely on advertising revenue (and they know people can get their entertainment in other forms--i.e. free). I wonder how much momentum there is behind buying tv on itunes or amazon...?

I hadn't thought about the minimum card purchase, and I wonder how credit cards fees work in online processing... maybe it's low/minimal now, so the micro pay thing works. As it rises, I imagine prices would too...?

I bring up a lot questions, because mainly I'm just speculating the possibilities that exist.