Monetizing content now, monetizing community later
Posted: December 7th, 2007, by Mike ShatzkinI was speaking this morning with Mark Dressler, who puts together the panels and education programs for BEA. We discussed Tim O’Reilly’s very useful Radar post about monetizing content. Tim made it very clear why advertising for what we think of as book content is probably a futile pursuit and made it painfully clear that subscription and upsell models, while they are useful, are not a magic wand either. Monetizing content sufficiently to pay for creating it remains very challenging.
But Tim did not touch on a new paradigm which I think we’ll see is of increasing importance to content creators. As we move into an era when monetizing content (which, to quote half of Esther Dyson’s most famous quote, “wants to be free”) gets increasingly difficult, we have a new oppotunity: monetizing community. And, in this era, using content as bait to attract community is a new strategy publishers have to learn to execute.
A perfect example of this has been provided by Michael Cader and his Publishers Marketplace. Cader gave away Publishers Lunch — great content — which allowed him to build a community which he is monetizing through subscriptions and through a job board aimed at them. (He also sells advertising in his “free” newsletter, but that’s the old model.)
A large publisher recently asked me for an online strategy for a science fiction encyclopedia they planned to publish. I suggested it was a great community-building tool, so “give it away” to the public, wiki it at a registration layer, and use it to gather the eyeballs they will sell book after book after book to over time. But they couldn’t do that. The author contract called for a split of online revenue, so there had to be attributable online revenue. That means subscription. So that’s what they have to do. It seems predictable that won’t work, and a great community-builidng opportunity will be lost.
As publishers learn that community building is a key to survival, they’ll see that using content for bait isn’t wasting it, and it isn’t giving it away. It is the key to future monetization opportunities.
December 7th, 2007 at 5:23 pm
Community is great, and will be increasingly important — the challenge is to figure out ways to entice community.
Monetizing content is tough. Free content and upselling is one way — we at NAP are just scratching the surface. But enticing community support (a la NPR, to support your good service, via quasi-voluntary donations, “membership,” or guilt-driven giving), or via another quasi-voluntary mechanism like adboxes (implicitly encouraging your readers to click), will be a challenge.
Much depends on raw traffic, as Tim suggests. I like to hope/think that a billion+ Web users will be the fertilizer for a million sites to bloom in this new environment. That is, that the proportion of reader to content providers, and the proportion of visitors to “conversions” (=money), will even out so that high-quality, specific-interest publishing will flourish.
December 8th, 2007 at 6:55 pm
If information wants to be free, don’t communities want to be free, too?
Monitizing intellectual property does become the key issue not just for publishing but for our entire economy as we move into a real ‘information’ economy. I think we need to think of ‘free’ as a limiting end case, rather than as the usual model.
Remember, beer wants to be free too, but we don’t let it.
Rob Preece
Publisher, http://www.BooksForABuck.com
December 10th, 2007 at 3:28 pm
Mike: I agree that the payoff for community won’t come mostly from voluntary contributions for the content instead of just purchasing it. We’ll have to be more creative than that. Once again, Cader’s model is that you create a service layer and community-added content that provide enough value to make a subscription fee work. So Publishers Lunch was the bait that brought in the community; then the community’s interaction created the added value worth paying for.
Rob: the question of what is “free” and what you can charge for is driven by economics, nothing else. The net is making a lot of competitive content available free; that is challenging to the industries that have charged for content in the past. You’re right that we don’t “let” beer be free, but if somebody down the street from your bar ever decides to start giving it away, you’d have a much harder time selling it.