Paid Versus Free Content Is Back in The Headlines

author/source: Miles Galliford

Paid Versus Free Content Is Back in The Headlines

Whilst I have a lot of respect for Mr Anderson, this new prophecy clearly comes from the mind of someone who has never run their own online business!

The article was published at a time when the economy was booming. VC’s had their cheque books out and online advertising revenues were growing at 20%+ a year.

Now the wind has changed direction, sentiment has taken a 180 degree turn.

Online companies offering their content and services for free have always thought that the light at the end of the tunnel was advertising revenues or a healthy profit from being acquired. They now realise that it is the light on the front of a high speed freight train.

Free is not looking like such a clever business model anymore.


Paid Versus Free

The last time that analysts and web ‘gurus’ predicted that all content on the web would be free was in the late 90’s just before the bubble burst.

Then between 2001 and 2002, when the bubble burst, the focus changed to paid content.

As the web economy started to pick up, free became fashionable again.

Now guess what?

We’re in recession and paid content is back on the agenda.


Wall Street Journal and Mr Murdoch

When Rupert Murdoch acquired the Wall Street Journal earlier this year he made it public that he intended to make all of the content on free and rely on advertising revenues. He put a team together to investigate the implications and the result…?

The pay-wall has remained in place.

Why? The team investigation revealed:

  • There was no real evidence that advertising revenue would fully replace the $75 million + subscription revenues
  • Membership preserved the brand's exclusivity
  • With a premium service they could maintain high advertising rates because they have a high quality known audience
  • They could preserve the value of the print paper for longer
  • Subscription revenues are far more predictable than advertising revenues during recession
  • Having a login helps protect content from plagiarism. When content is free, people assume there is no copyright
  • It keeps all their options open. Once they go free, it’s almost impossible to go back to paid


The decision to remain paid was a big blow to the ‘web should be free’ campaigners like Chris Andersen and Jeff Jarvis.

However it brought the truth about the paid versus free argument to the fore, which in one sentence is:

“You get what you pay for”

Every business, big or small, needs a healthy and regular revenue stream to maintain quality and continually improve what they do. Running a content website is no different. If you believe you can achieve your financial goals whilst giving your content away for free, then do it, but as Warren Buffet famously said “only when the tide goes out do you discover who’s been swimming naked”. As the recession bites, there will be a lot of website owners exposed to the harsh truth.


The Good News

The good news is a lot of the rubbish on the web will disappear and the quality content will become more visible. This content will attract increased visitors and any site with a big loyal audience can become a sustainable business.

The key to success is generating multiple revenue streams.

Every content website should provide free content. This will drive traffic, help build credibility and, of course, generate some advertising income.

Affiliate marketing will become more important in bad times as merchants try to get more bang for their marketing bucks. Online publishers need to hook into this lucrative market.

Ebooks, research and other downloadable products should be sold.

Events, webinars and courses should be created and promoted via the site.

And last, but not least, every website owner should strive to find a way of getting monthly subscription income to give their site financial stability.

Free content is good, but you need paid content to survive.



The recession will lead to thousands or maybe millions of free content websites closing down.

I think this is a good thing.

As Eric Schmidt, the CEO of Google, recently said the internet is a cesspool of false information.

A major clearout will give oxygen to quality content and allow it to float to the surface.

If you are already an online publisher producing quality content for a niche target audience, keep going, your time has come.

If you are considering setting up a niche online publication, I would say there has never been a better time to get started, since the internet began …. provided that:

  • You focus on creating fantastic content
  • You know your audience
  • You plan on making multiple revenue streams (including, if possible, subscription revenues)
  • You understand that it will take hard work and persistence



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