The End Of Free Content?

Stephen Yagielowicz
XBiz' own SeeSea started a thread on our Content Corner message board, asking "Are The Days of Free Content Gone?" Her post was in response to Gretchen Gallen's recent article on the subject, and I'd like to add a few thoughts to the discussion:

In Gretchen's article, she states that "In the early days of the Internet, users were given free content and services from nearly every online business sector. But today, OPA says, as increasing numbers of web sites have switched from a free to a fee-based model, those "privileges have become history," and only a "pleasant memory" for the user community."

While focusing on mainstream, the trend of the Online Publishers Association's findings are clear: web site business plans that rely on advertising revenue to monetize their traffic need to be re-thought, and in many cases, abandoned. "Fee, Not Free" should be the online publisher's battle cry, as we move into an ever more mature market.

Need convincing that subscription rather than ad-based revenue models are the way to go? Ask any webmaster how effective banner ads are in comparison to other advertising vehicles such as text links: You'll typically hear "Banners don't pull like they used to, but text links are increasingly effective..." Know why? Surfers rightfully see banners as "ads" – and not the "graphic enhancements" or "site features" they once might have perceived them to be when they were Internet neophytes; and since they've been taught to "get it online for free," they now shun banner ads, and may even use filtering software or customized browser settings to prevent their display. Text ads? They're more often perceived as information or navigational aids than as advertisements.

Finding A Balance
While I'm not saying that there's no future for ad-supported free content on the Internet, it's clear that subscription based revenue models will become more pervasive. Keep in mind, however, that I'm also not saying that revenue models should be an "all or nothing" proposition – in fact, I think that having a tiered approach is the best way to go. Let's look at an example of this in practice:

Thumbnail Gallery Posts (TGPs) are one of the most popular places for surfers to find free porn. "High end" TGPs run by webmasters who care about their product and their customers develop a substantial base of "bookmarkers" or repeat visitors who come to trust the brand and return for daily updates. Given the volume, diversity, and quality of the free adult photo and video content available on these sites, it's an uphill battle to convince the surfer to actually pay for more porn, especially at some of the price points being asked. The TGPs popularity due to its abundance of free content makes it unlikely that this type of site will ever disappear, although it will doubtless evolve due to regulatory and market forces.

A TGP (especially a niche or micro-niche one) that develops a loyal user base, and that features high quality static galleries, might do quite well, however to offer surfers paid access to its archives. These folks might never be monetized elsewhere, but for say $4.95 a month or $14.95 one-time, surfers might want to see not just today's 100 new galleries, but "all" of your listed galleries. Add a little content of your own and maybe a few feeds and call it your "members area" – at an upsell to $9.95/month.

Ratchet up the content level, and the price, with each successive membership tier, and add ala carte pricing to individual content 'items' so that the surfer can get just the membership he wants at the price (and in the currency / method of payment) he wishes to pay. "Under $10 a month" is close enough to free that if you can produce a quality product, and provide compelling reasons for its purchase, then no matter how much free material is available, a subscription model will work.

Free Adult Content Is Here To Stay
So the question is not "Based on the glut of free content, will a subscription based revenue model really work at this point in the game?" but one of "Given the glut of free content, can we afford to continue relying on ad based revenue models?" But these are concerns for webmasters and marketers. The consumer has another idea.

Frankly, with the file-sharing Genie out of the bottle and the "Napster Generation" not caring about the legalities of copyright infringement, and despite webmaster's best efforts including the increasing use of DRM, terabytes of erotica will eternally circulate throughout cyberspace, posted to P2P networks, newsgroups, message boards, and sent via e-mail to friends and family alike by the folks who paid, or refused to pay, to look at our porn.

So no, we haven't seen the end of free content – but for an increasingly large share of online publishers, we've seen the beginning of the end of free content in the hopes that the surfer will click a banner. So what then will convince a surfer to pay for content when there's no end to its free availability in sight? Quality, and interactivity, of course! But that's a story for another day... ~ Stephen