- log in
Posted by James McQuivey on February 19, 2010
Just came off the stage at PaidContent 2010, a day-long summit here at The Times Center near Times Square, dedicated to the question of if/how/when people will pay for content. The timing is good -- as I wrote in January, The New York Times is planning to charge for content within a year or so, Hulu is considering a subscription model (not necessarily in place of but, I believe, in addition to its free service), and the eBook pricing dilemmas are causing sleepless nights.
I opened the conference with a brief assertion that fretting over whether people will pay for content is based on a mistaken assumption: that people have ever paid for content in the past. They actually haven't. Instead, people have paid for access to content. But in an analog world, access was gated by physical form factors like vinyl, newsprint, and movie theaters. As a result, the coincidence of form factor and content made us believe that people pay for content.
But people have never paid for content. Even when a daily newspaper was a necessity for the average home, the dime you paid a day (in the 70s) for a newspaper did not cover the print cost, much less the reporting. Instead, it was classified ads and auto dealers who footed most of the bill. And the hours we spent on TV and radio every day through the last half of the last century until the explosion of cable in the 90s, were all free. When cable finally asserted itself, people did not pay per show or even by channel (with the exception of premium movie channels). Instead, they paid for overall access.
Move to today, and the shift to paying for access has nearly completed the transition away from paying for content directly. Below is a slide I shared at the conference where I compute an average monthly cost of content for a typical American home. What you're looking at is a bar chart that shows what percent of people do a typical thing in an average month, then an estimate for the average amount they pay in a typical month (this was the hardest part to calculate and the numbers are approximate). We weight the spend figures by the percent of people who do it to come up with an overall spend by the average US household. The big takeaway is on the bottom of the slide.
That's right, a whopping 77% of what the average home spends for content each month is spent on content access, not content itself. As a result, if I were making media company decisions I would immediately reevalute my strategy in light of this, asking myself these questions: 1) what unique content can I provide and expand access to? 2) what connections and devices must I support or partner with to make sure my content is in the right access venues? 3) what experience can I wrap around my content to make access to it feel worth paying for?
Search Forrester's Blogs
Forrester Insights for iPhone
Key research and data points when and where you need them »
Forrester's CX Index
Predict how actions to improve CX will affect revenue performance.
Measure the customer experiences that matter most »
Key Takeaways From Mobile World Congress »