Lou's Commentary

Gated/Premium/Paid Content Online?

Tuesday, July 21st, 2009

Many sites gate their content for lead or customer management purposes. This is a solid marketing objective. Examples of successful publishing sites doing so include ConsumerReports.org., Taunton.com, Chemweek.com and eRepublic.com.

There is ongoing discussion among publishers about why gated content might not make sense for websites. This thinking is predicated on sharing content as broadly as possible. Putting content behind a wall cuts off conversation. Using editorial content to drive traffic can be an audience development tool. But this is done within boundaries of business rules. 

Key questions to ask include what are the business goals, i.e. how do you convert the increased traffic into more members and/or more revenue from existing customers or members?

At the same time, some sites that have relied on site advertising as the primary source of revenue are qustioning whether this is a sound business model. The reason cited is that CPMs (cost per thousand) are going lower and the bar is rising higher on how much traffic is needed to generate online advertising revenue. Creating online revenue in addition to advertising is highly recommended.

Online veterans Jeff Jarvis and Alan Mutter had this to say in March 2009:

Point: “In the old-content economy, one could make maoney selling many copies of a product. In today’s link economy online, we need only one copy, and it is the links to it that give it value. We should be spending our effort figuring out how to get more links to original reporting to support it” [Jarvis]

Coutnerpoint: “It is vital that publishers produce content that is sufficiently unique, authoritative and valuable to motivate customers to pay. If there is powre in the brand, consuemrs recognize quality and value.” [Mutter]

To read more, go to http://www.latimes.com/news/opinion/opinionla/la-oew-mutter-jarvis19-2009mar19,0,5832874,full.story 

Trend? 

According to a December 2008 business to consumer (B2C) paid content five-year forecast conducted by Forrester Research, an independent technology and market research firm, there will be a decline in transaction based content sold online. There will most likely be a rise in sites that rely on advertising revenue to provide free content in two ways: 1) most content free and ad supported with premium services available for sale and 2) give content away and drive purchases in a more profitable channel such as events or products.

Sabatier Consulting recently queried several database fulfillment companies to ask if their publishing customers are gating content online. All responded that they are noticing an increase in both gating and charging for premium content. Approximately 25 to 30% of their clients are following these practices .

Member OrganizationsSNAP, the Society of National Association Publications that serves several hundred publishers providing publications to members in print and online, conducted an e-publishing trends survey in 2007 [most recent]. When asked how content is made available online, 64% indicated that they place some content and/or publications behind a gate [password protected] while 11% put almost all content behind a gate.Information provided by SIPA (Specialist Information Publishers Association) indicates the following reasons why people pay for access to some niche sites. These include:   

• When the organization has privileged access to source material, e.g. insider industry information
• When the site has a specific personality
• The site aggregates information which saves the visitor time
• The site hosts a specialist community
• Charging acts as a filter to ensure members have a reason and interest in participating
• Exclusivity
• Passionate about a subject and want to submerge themselves
• Training
• Help sites

SIPA goes so far as to say that the future of internet publishing is niche.

News and Portals

Primarily news sites [pure play and some publishers] and portals are the group dominating the conversation about gated/premium/paid content. They have legitimate concerns and face big challenges, but their issues are not quite the same as those of most consumer, B2B, and publishers serving membership organizations.Closing

Let’s stop wringing hands and focus on sound business principals: strategy and planning with clear voice and value proposition online supported by additional sources of online revenue. This is the challenge, not free vs. paid.

 

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