When it comes to free content, do you get what you pay for?
Posted by Sandra Cosser on 21 Apr 2009 | Tagged as: Social Media
Content is …. freaking expensive. Just ask any of the newspapers who are battling to stay afloat in the digital age, or YouTube, which is massively popular with massive profitability problems. Econsultancy looked at the ongoing problem of profitability vs. content in an age where everyone wants everything and no one wants to pay for anything. Immediacy is the new drug of choice. And according to Econsultancy’s Patricio Robles content can be viewed as poison: it’s up to you to pick the manner in which you limp towards your death by using either professional or user-generated content.
Of course it’s not nearly as dire as that, but I can’t resist an opportunity to be melodramatic.
In the world of profitability and content, YouTube is a wonderful example of the contradictory nature of popularity vs. value. Farhad Manjoo compared the world’s favourite video sharing portal to one of America’s foremost newspapers, the Boston Globe. Using figures from Credit Suisse, Manjoo asks us to consider the case of YouTube, which stands to lose $470 million compared to the Boston Globe, which stands to lose a mere $85 million. YouTube is touted as the way of the future, leading the digital age in a blaze of technicolour glory, while the Globe is only one of many old fashioned, traditional newspapers that is too set in its ways to cross the digital divide.
But in pure monetary terms, the Globe is outperforming YouYube hands down, and to be perfectly honest, its performance is dismal. So, how much more dismal is YouTube? Why is YouTube still so lauded? Why does Google persist?
For one thing, Google is like that kid at school who brings chips and sweets to share with the other kids for the sake of acceptance. The ingratiating one no one really likes but who everyone puts up with because no one else provides so much free food, and who else are they going to mock, ridicule and deride at private get togethers to which said sycophant is not invited? Google craves acceptance. It gives all of its treasures away to keep people happy and coming back for more. Why else do we put up with the glitches on email, the inconsistency of analytics and the algo updates that everyone panics about and that then amount to so many storms in so many teacups? 
For another, people are achingly simple. We like to be entertained; and we are so very easily entertained. Want proof, I suggest you see I can haz cheezburger. It’s senseless, it has no value whatsoever and isn’t even very clever, and I just followed it on Twitter because, like 431,502 (at time of writing) other followers, I like cute kitties. So, YouTube stays.
According to Manjoo, there is a very clear and simple reason why YouTube consistently fails in its monetizing attempts: “Advertisers don’t like paying very much to support homemade photos and videos.” He says that while newspapers are able to generate advertising dollars on the basis of their readership (which is generally indicative of good credible content), YouTube experiences the exact opposite. “… videos that get the most clicks—and are thus most expensive for YouTube to carry—trend toward the sort of lewd or random flavor that doesn’t sit well with advertisers.” In other words, grainy home videos of your toddler playing with doggie do, and instructions on DIY face lifts using dental floss don’t inspire advertising deals from companies like Pedigree dog food and Oral B.
In an effort to redress the situation, YouTube is mimicking more profitable video sharing platform, Hulu, by purchasing licenses to broadcast professional videos, movie clips and episodes of Star Trek. Quality content that is far more likely to bring in the advertising millions.
In an article on Slate.com, Jack Shafer says that after much trial and error we have learnt what internet addicts will not pay for, but that we been slow to learn (or assimilate) the lessons that teach us what they will pay for. He covers his backside a bit by saying that ‘not all successful paid sites are alike’, but concedes that they have similar attributes: “They are so amazing as to be irreplaceable. They are beautifully designed and executed and extremely easy to use. They are stupendously authoritative.”
All of which is, of course, easy-peasy to achieve. But Shafer points out that some sites that have, indeed achieved it all and have attained online profitability: The Financial Times’ FT.com (which irritates me immensely when it won’t let me access interesting articles – proving that not all people are willing to pay for content not matter how sterling the quality) and the Wall Street Journal’s WSJ.com (same frustration, same result).
Going back to Econsultancy, Patricio Robles proffers his own suggestions for solving the poisonous content problem. First and foremost, he says that no matter what you do, what your aims are or whether you’re in the online game as a professional or use it as an amusing interlude, you need quality content to make your ventures work. It’s the same old song sung to the same old tune; but until quality content becomes the norm, and people cease to wonder why their shoddy, badly cobbled together frankenstain content isn’t bringing them the returns they want, we’ll keep on singing it.
Secondly, cavernous content archives do not translate into value. Robles highlights YouTube as an example: more videos than God has time to watch, and precious few that would hold even Paris Hilton’s attention for long. Thirdly, and perhaps somewhat controversially, access to content shouldn’t always be free. This can be applied in two ways: people who wish to access quality content can be required to subscribe to it, and those who wish to distribute content may have to subscribe to a distribution platform in order to do so, to discourage idle time wasters (and those dog poop videos).
And, despite my reservations regarding have to pay actual money to read informative news, I have to say that I agree. Paid subscriptions would go a long way towards cutting the massive amounts of drivel that contaminate so many potentially promising sites and cause so many good ideas to flounder before they have even properly begun. Some rewards are better enjoyed if they require some work, sometimes all of the work that is required is reaching into the wallet to fork out a little cash. So long as what you offer is truly rewarding, people won’t mind paying a little bit extra for it.
