Could one answer to paid content be found in a bottle of water?
According to the Financial Times:
“When people really want or need something, they will pay for it, one way or another. If today’s publishers cannot convince their readers to do so, they will be overtaken by others that can.”
Setting aside the “should we or shouldn’t we?” questions biting at the ankles of Paid Content, let’s stipulate, for the moment, that eventually we’ll all pay in some way for news content. It’s a big assumption, currently untested in a major market. But making that assumption prompts what, I think, is a more interesting question:
Is news content gasoline, or is it bottled water?
That is, is online news a necessary commodity that people will begrudgingly pay for, because they have to, or is it a necessary commodity that’s packaged in a way that finds a happy and willing customer base?
The growth of bottled water in the past decade — a commodity available free pretty much everywhere in the developed world — is the story of consumers willingly shelling out real dollars in exchange for convenience and branding. Can the news industry — which also sells a largely commoditized product — learn anything from the success of Aquafina and its ilk? Why is it that consumers cheerfully pay more for thirst-quenchers than we do for the fuel that moves our vehicles and our economy?
Such a freeing of virtual pocket-change has been suggested within the news industry to be an iTunes challenge: If people will pay a buck for a song, surely they’ll pay a few pennies for the sweat and shoe-leather of America’s newsrooms.
But news, like gas and water both, is a consumable: Once it’s used, it’s used. Unlike a song on iTunes, yesterday’s news report is not a moment to be savored over and over throughout the years. Which is why the bottle water example is so intriguing.
Presumably, the same people buying water by the half-liter are spending the same disposable income on the latest digital Green Day single. Yet, almost universally, when asked, they say they won’t pay for digital news content at any price.
So what have Pepsi and Coke — both huge water-bottlers — figured out about selling packaged commodities that the collective minds of the newspaper industry have not? How do you sell something when so much of it is being given away for free?
The news is an experience good, highly unpredictable from one article to another, the ramifications of which I explain here:
http://networkednews.wordpress.com/2009/05/23/not-by-links-alone-google-news-experience-good/
The news is also what economists call a “public good”:
http://en.wikipedia.org/wiki/Public_good
It’s not all like a song, water, gasoline, or virtually any other good.
It may sound overly simplistic, but even when you buy a bottle of water or a can of Pepsi, you DO actually get something. You can hold it in your hand, you USE it. And those industries have been successful after years and years of clever marketing to make us want what they’re selling.
I don’t have the answer either, but surely it’s not as simple as turning on the tap, putting it in a container, putting a cap on it and expecting people to buy it.
Unfortunately, because of the serious cutbacks to many North American newsrooms, most media outlets would be offering a bottle that is only half full, but charging a premium for it.
You may be overstating the ease of access to clean drinking water in the majority of the world, but I’ll punt on that angle and offer this, instead:
If you follow the Aquafina/Pepsi Dasani/Coca-Cola analogy a bit further, you find that these major producers of a generally unhealthy product (soda!) decided to repackage the healthiest part (tap water!) to capitalize on a trend (people will *buy* bottles of water!).
Take that to news and you get something like Salon : Evian :: Major Metro w/Paid Content : Aquafina.
Then again, I have a tendency to pay for a water bottle once, then refill it from free fountains. I guess that makes me some sort of water bottle pirate.
The thing is, tap water is not given away free. People pay for access to tap water. And, very importantly, you cannot drink from the tap in every water, so the only way of getting purified water is by buying bottled water (or boiling it, or adding disinfectants, but this takes time, and is not as efficient or convenient).
On top of that, in the case that you happen to live in a place where you can actually drink tap water (it’s not as common as you might think), as Ryan has pointed out, you may buy it once, and then just refill it…
The bottled water analogy also assumes that there is a clear distinction between form and content or content and container. We would have to look at that more closely if we want to use it as an analogy for news.
I meant to write “you cannot drink from the tap everywhere.” (Meaning every country, or every city). Apologies.
Selling news as if it’s bottled water would be a disaster: It’s an admission that the content is just another commodity — which, last time I checked, hasn’t been a good strategy for journalism. Far better, I think, to sell news like wine: lots of local vineyards growing individual varieties of grapes that have their own flavor & appeal. (No one would ever mistake a Boston red for a New York white.) Or if that’s too high brow, think micro-brewed beers.
If you still think journalism needs help from the brand managers at, say, Pepsi, then it might help to remember John Sculley and his rather, ummm… *uneven* experience as the CEO of Apple. http://tr.im/mucl
This is an incredibly weak analogy. Someone who buys bottled water is buying convenience. How exactly are you going to make paid news more convenient than free news?
The analogy is flawed. If people could grab a bottle of water off the same shelf that held bottled water that cost something guess what would happen? right. The free water would fly off the shelves, the water with a charge would sit there. That’s the situation that more closely describes news these days. it’s as easy for me to type in one URL as another, so if I can get the news for free and it’s substantially the same as the paid version… why pay?
Too many news sources act as if this is still the middle of the 20th century when we had a couple of papers and 3 major channels of TV for news. In the 50 years of my life I’ve gone from being reliant on 2 papers and 3 networks carried by 3 local stations on a predefined schedule to a world where I have hundreds of newspapers, TV station and audio from around the world all available on demand. Yet news organization still all cover the same half dozen stories as leads – and then wonder why I’m not interested. Give me something unique. Not a difference face on the same product, give me a product that’s unique. Or, of course, you can fade away. Your choice.
Rick,
Interesting that you equate value with something physical. I guess this points to the unfortunate truth that we don’t “value” news/information that causes us to “think.”
I can only “hold” that idea in my brain. Hopefully I can “use” it for something that benefits me or others. But typically that does not result in “immediate gratification.”
Maybe that’s the real difference – the timing on the satisfaction and payback for the investment. Since we appear to be living in a society that doesn’t value waiting for anything this may be the ultimate hurdle to the payment model for news.
And yet, people do pay to attend higher education institutions, and scholars of all disciplines have to pay to read online journals and even to publish books (or their institutions do). People pay to attend conferences. Granted, there are other values added to these beyond information (a lot of people think that “networking” is more important than any “abstract” knowledge obtained).
We don’t live yet in a society in which all types of information are free.
A very obvious strategy is to deliver different kinds of news on different formats. So you get something online, something different on the paper. You want what is on the paper? You have to pay for it.
I know this has been and is being tried, but I don’t know how successful it has been.
I do pay to read the newspaper. Not every day. But I do. There must be more people out there who do. Unless Americans, of all peoples in the Earth have decided to stop paying for anything.
People buy bottled water for two main reasons – the erroneous perception it’s better/safer and because of convenience(public facilities no longer offer water fountains as they once did). First, it will be interesting to see what happens to sales of bottled water as people begin to realize how environmentally unsound the practice is (and that it’s not safer). Concerning news, the “better” argument is dubious in an era when even the New York Times continues to miss or misreport on the biggest stories of the day (weapons of mass destruction, the current financial meltdown). Second, the convenience article doesn’t apply. It’s as easy to click on a competing online publication as it is the print newspaper competing online. And working against newspapers is that they continue to misunderstand the web. There is an ethos about information being free that runs deep. It is also annoying to have to sign up and type in credit card data time after time for new products when competitors are willing to trim budgets to live on what advertising can provide. The only model is value-added – sell me a special membership where I get a t-shirt and a “press pass.” But force me to pay for what others will give me for free is a bad strategy. The danger in a model of paying for premium content is that it walls off your best stuff from groups like college students, your future consumers. Give it up, guy. Move out of those marble buildings downtown. Pay people from the neighborhoods freelance rates to report on the communities they know. Dump your print version of the paper – ecologically unsound and you are funding your own competition. That kind of old thinking is killing you.
Bonnie,
Your points are well taken if the focus is the web. You are spot on with no convenience advantage. However printed newspapers win on convenience in the physical world. The very fact of their ease of disposable and the no risk of losing or damaging gives them the advantage over any e-reader. Once paper becomes connected to wireless via cell phones the remaining speed and non measurability disadvantage goes away.
I think the water metaphor is just right. The value is convenience. The perception of value is about “people like us” drink Perrier etc etc.
Likewise the value of print is sharing and convenience. The perceived value is “people like us” read the New York Times or the “Smalltown Courier.” or the “High School Times.” An under appreciated function of print is to create in a community a more open and flexible notion of “people like us.”