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The Value of Nothing

The Value of Nothing

January 27, 2010
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Will virtual reality boost the paysite market?
Yes, it will soon
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Yes, but in a few years
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There's an old saying that "the grass is always greener on the other side of the fence," and it serves as a cautionary tale by using the example of cattle that become trapped after getting their head stuck in a fence while trying to graze on what always seems to be the ripest rewards — waiting there, ever so slightly beyond their reach — if only they could stick their heads out just a little bit more...

This pursuit of "something better than you have" can often lead you down the path of the unwary cow, causing unexpected and problematic issues to suddenly be reveled in the wake of "solving" other problems, or acquiring new "solutions."

For example, shifting business models among adult websites are seeing traditionally free access properties turning to paid content models, while some formerly premium websites are battling dwindling subscriber bases by adopting free access / ad supported business models — with varying degrees of success.

Things are much the same in the mainstream world, where a solution to one problem can pave the way for a host of other dilemmas.

For example, stymied by a drop in newspaper circulation due to readers' preference for reading free news online, New York's Newsday turned its Newsday.com into a paysite — a seemingly "perfect" solution that transferred yesterday's familiar paid circulation model to the medium that consumer's desired.

I can imagine the enthusiastic agreement around the board room as this pay-to-play decision was made: "That's great — we'll give the people what they want and charge them just like they're used to paying for our regular paper."

Three months later, the site has reportedly only subscribed 35 members and has seen a 50 percent drop in traffic. While not all traffic is good traffic, 35 subscribers is nothing for a "major" publisher to boast about — although print issue subscribers as well as premium cable TV subscribers receive free access to the website.

News of the stunningly low subscriber number came out during recent union contract negotiations and shocked stakeholders on all sides of the equation, including some staff members who were dismayed over the brand's seemingly drastic drop in prominence — with nothing to show for it.

"People were expecting it to make money," a Newsday staffer who was at the union meeting was reported as saying. "If it's not, why are we doing it?"

"Why are we doing it?" — The question is as complicated as it is simple, and while there can be value in running a loss leader, for most online adult operators, the bottom line must be the bottom line. If your current operation is making money — even if it's not as much money as you would like — think long and hard about the possible implications of making drastic changes for what could be little to no reward. Otherwise, you risk being caught by the head while trying to eat grass that really is no greener than your own.


OPINIONS & VIEWS

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