2015 saw the return of the paywall as a respectable source of revenue: Niche sites like Pando went all-in, The New York Times hit 1 million digital subscribers, and ad-free digital behemoths like Netflix continued to charge past their traditional brethren. In 2016, we’ll finally stop wringing our hands over whether or not the strategy works and embrace the evidence: People — lots of people, of all ages, incomes, backgrounds, and nationalities — will pay money for good content.
The diversity in income streams is nice, but the real benefit of paid content is what it does to the audience. Dollars are a proxy for engagement; when you hand over a credit card, you value the product you get in return more than you value the brief, transactional moment you enjoy with a listicle that drifts past you in your Facebook feed. And when you’ve got an audience that values your content enough to pay you a monthly subscription, then suddenly you’ve got a pool of reliable revenue to make even more content that you know your audience will love. It’s a wonderfully virtuous cycle.
At Midroll, we launched Howl, our premium audio subscription service, for precisely this reason; with a devoted, paying audience, suddenly we’re free to produce content that wouldn’t work as ad-supported pieces — shorter-run series, elaborately produced fictional drama, experimental shows, etc. We’re not alone; companies like Crunchyroll, Audible, Pando, Hulu, Netflix, Spotify, and others are building a future based largely on the notion that if you produce good content, people will pay for it. Companies like HBO and organizations like public radio have known this for a long time, and in a new digital environment, they’re finding new ways to prosper with this model. And some traditional players are starting to adapt to this paradigm; witness Seeso from NBC Universal and Shudder from AMC.
Much of the anxiety around paid content centers on the idea that digital subscriptions won’t be able to replace traditional revenue streams so that traditional media operations can carry on as they did before, employing the same organization models, content strategies, and business approach that helped them once become the dominant players in the industry. But that anxiety is misplaced: Instead of worrying about how to sustain their existing operations, media companies would be better served thinking about how to organize to produce content for this new world. If they don’t, legacy media will find that while it’s busy worrying about whether or not a paywall is a good idea, newer entrants will be out making good stuff — and the audience will pay for it.