It seems like we're at the start of a great experiment to find what types of digital content people will pay for. The Web has been in love with The Cult of Free to the point where it's threatening the producers of content with extinction. There simply isn't enough advertising money to support everything. So what's next? The trick for content providers is to create tiers of content with value enough to get people to pay up. It's going to be tough. Mobile appears to be the first front. The Wall Street Journal this week flipped the switch on charging for much of the content available via its iPhone and Blackberry apps. Check out the reaction from those using the app -- 1000 of its 1500 ratings are one star with most are vowing to never use it again. (http://www.wsj.com/iphoneinstall)The newest test: Someecards. It rolled out an iPhone app today that costs a modest 99 cents. It's less than the cost of a Coke. It'll still be interesting to see if people take to these kind of microtransactions for content as a behavior. It would be unheard of to ask for 99 cents to use Someecards.com. But it might just work in mobile. There's quite a bit on the line. As Fred Wilson recently pointed out, "We need a scalable business model for mobile web apps. Display advertising is not likely to be that answer."
October 28, 2009
Will people pay for mobile content?
It seems like we're at the start of a great experiment to find what types of digital content people will pay for. The Web has been in love with The Cult of Free to the point where it's threatening the producers of content with extinction. There simply isn't enough advertising money to support everything. So what's next? The trick for content providers is to create tiers of content with value enough to get people to pay up. It's going to be tough. Mobile appears to be the first front. The Wall Street Journal this week flipped the switch on charging for much of the content available via its iPhone and Blackberry apps. Check out the reaction from those using the app -- 1000 of its 1500 ratings are one star with most are vowing to never use it again. (http://www.wsj.com/iphoneinstall)The newest test: Someecards. It rolled out an iPhone app today that costs a modest 99 cents. It's less than the cost of a Coke. It'll still be interesting to see if people take to these kind of microtransactions for content as a behavior. It would be unheard of to ask for 99 cents to use Someecards.com. But it might just work in mobile. There's quite a bit on the line. As Fred Wilson recently pointed out, "We need a scalable business model for mobile web apps. Display advertising is not likely to be that answer."
A few thoughts. First, while free is a buzzword, it is an unstoppable force for content. There are 85,000 Apple apps and growing, and most are free, so users flow around anyone who pays. Google just started giving away turn-by-turn GPS directions on mobile -- free.
Second, mobile apps get buzz, but they really are disposable ads. A study this spring by Pinch Media of 30 million app downloads found that after 24 hours, only 1 in 5 consumers continued to use the app, and after 3 months that number had fallen to only 1%. A few apps stick; most are soon forgotten. This is yet another reason why consumers won't pay for mobile content.
Third, however, consumers have always paid -- by spending on the devices and monthly subscription fees that support the free content. I haven't cal'd what the annual cost of my iPhone is, which I tend to replace every year with new hardware and pay too much for the voice and data subscription ... $2,000 perhaps? So free is not free after all.
Alan Wolk suggests at his blog that we're moving to a two-tiered system in which the elite/affluent/educated pay for content and the lower tiers get it for free. It's an interesting question, on which demos will pay more than others. I think Alan may have it reversed -- those with upper incomes who buy into the gateway devices get the free content, while those (boomers retiring etc.) with lower incomes and less tech interest will continue to pay for content in the form of old school magazines, newspapers and cable bills.
But will anyone pay for mobile content? No ... unless you count the constant refreshment of devices that access it, and then the answer is yes.
Posted by: Ben Kunz | November 04, 2009 at 03:29
Ipods are really cool!Great post!very informative...i learned a lot from it..thanks and keep posting..
Posted by: Best Dog Training Techniques | May 24, 2010 at 00:13
The trick for content providers is to create tiers of content with value enough to get people to pay up.
Posted by: system wide hook | June 25, 2010 at 10:00