Passionately paying audiences?
Last week the Financial Times editor, Lionel Barber, predicted that “almost all” news organisations will be charging for online content within a year.
This week sees the announcement that Microsoft will close down their online video-sharing service, MSN Soapbox.
At the end of last month, Joost announced it will change from a consumer strategy to one of technology licensing to 3rd parties.
Although Google executives said last week they expect YouTube to soon be profitable, you really wonder just how much those overlay advertisements yield. I, for one, have never clicked on one of them, except to minimize it from view.
So the owners of online video services seem to be checking their balance sheets much like newspaper publishers are, and it’s a lot more expensive to be serving up video files.
What the revenue model is going to keep them alive? Most agree the money could come from three sources - the producer/creator, advertiser or the user/viewer.
When Livestream recently introduced producer fees they received a backlash from people saying it is too expensive to be worthwhile. I can imagine most people accepting a monthly fee for uploading clips to You Tube, but will those fees be enough to cover streaming costs? Would users be willing to pay for the amount of times their content is viewed? Highly unlikely given the spontaneous popularity of some obscure clips… what would Fred do!?
As far as advertising goes, it seems there is a crisis in the media as advertisers are losing confidence in the power of television to spread their message. Especially given the web is proving people will largely ignore and sometimes actively avoid advertising messages.
So that leaves the user/viewer. Can online video have revenue models from subscription or pay per view?
It’s early days in this evolution and there have been very few examples of success. What we do know is that if user payments are going to work then two things need to be really clear.
Firstly, the content has to be highly valued. That means the general click and view stuff will be unlikely to earn money. The Financial Times is an example of a provider of content that is highly valued and with the right offering, something people would be willing to pay for.
Secondly, the payment must be drop-dead simple. If the user has to pull out the credit card, or go through lengthy sign-ins and shopping carts each time they want to buy, then forget about it. The holy grail is to have them buy into a subscription model that takes out a monthly automated payment.
There is no doubt we are standing at the edge of a new frontier, where only the bold fear to tread. Any brave steps taken will be keenly observed by the content industry who are eager to see sustainable strategies emerge.
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