The Future of Selling Media Online - Free then Pay for Popular Content

Mar 18th

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I recently mentioned the Sigur Rós Hiema video, which was featured on the YouTube homepage for a day and probably got about a million pageviews. An SEO Book reader named Satish discovered that after the video built up a lot of viral media and link exposure the video was set to private mode.

Google video, as a DRM service, failed miserably. But providing custom hosting for member videos that can only be viewed from certain sites or for a certain number of views is an easy win for YouTube if/when they decide to do so. Google already owns Checkout, so it should be easy to do after they have the right relationships in place.

I predict that if that limited syndication model is available to the masses, a future media pricing system will allow publishers to offer free video for the first X views and then the videos are turned to private / members only / payment required after they get a certain number of views. All the free views build the perceived social value, while being easy to market since the content is originally free.

Sliding Price Scales Starting at Free

Seth talked about taxing latecomers by making events expensive at the end and cheaper for the first few people. And music is priced this way on Amie Street. It is basically the concept of Piracy is Progressive Taxation flipped on its head - make it free to build awareness until people really value it, then let the irrational herd follow along for the ride.

Word of Mouth is the Best Long-term Marketing Strategy

The free then paid model encourages the creation of remarkable content and ensures artists and authors are paid a fair market value for their best work. And it offers a profound business model strategy because as markets saturate marketing gets more expensive and attention gets more scarce - the easiest way to do marketing is just make it easy to use, consume, and share - and rely on word of mouth to do the marketing. And it is far better than monetizing via advertising because it is more organic, and stems from the web's strengths. As Jakob Nielsen said:

"The basic point about the web is that it is not an advertising medium. The web is not a selling medium; it is a buying medium. It is user-controlled, so the user controls, the user experiences."

When there is an unlimited amount of competition consumers are far more likely to buy what is already well trusted amongst the community.

This Type of Technology is Easy to do

The cool thing about my current content management system set-up is I can control permissions for any article on this site. It could even be automated for certain classes of information (ie: only pages, only blog posts, only book pages, only on newsletters, only on a subdomain, sitewide, etc.) ... it is entirely flexible.

Limitations

You wouldn't want to bait and switch everything you did or you would build up some serious negative karma and some people may not be willing to link at you, but most people will not care or notice. The attention comes and goes, but the links stick. If you turned 10% to 30% of your well loved featured content into premium content I doubt it would hurt your link building much, although your rear end might get sore from your wallet filling up with cash. :)

Published: March 18, 2008

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Comments

March 18, 2008 - 1:28am

i wonder as more content becomes available, and multiple sources may provide comparable information, then subscriber models for premium content will fail, as the marginal cost approaches zero... then the monetization models involve three party systems... advertising... competitive intelligence etc... or perhaps transactional models... all requiring a community... there's a great article by chris anderson in this month's wired mag about this...

March 18, 2008 - 8:55pm

i wonder as more content becomes available, and multiple sources may provide comparable information, then subscriber models for premium content will fail, as the marginal cost approaches zero

As individual articles perhaps... but as part of an exclusive collection, probably not IMHO.

The importance is not just the content or content quality, but the marketing that made it spread too. Some $500 to $2,000 info products offer far less information that sites like mine, SearchEngineLand, or SeoMOZ do for free each month, and yet they still sell.

And there is a lot of hidden cost to free information. Sometime last week after Bear Stearns lost half their value in a day some people were calling Bear Stearns a buying opportunity, but unfortunately it fell another 90%+ from there. Most free information falls under one (or more) of these categories

  • lacking in context
  • overtly biased
  • self serving
March 18, 2008 - 5:22am

It'll be interesting how algos adapt to things that grab links then die off. For instance, suppose your well linked SEO for bloggers piece suddenly saw a drop in its link acquisition rate, because it went private. How would SEs treat that?

Another consideration, obviously, is whether you'll kill of search traffic then, by hiding stuff behind 'pay-per-view' barriers. And will people just jack it off archives and caches? Theoretically, you'd be litigating against archive.org and such if the stakes were high enough (like a review of your paid content ranking, and saying it's free at archive.org).

Personally, the only paid content I've linked to was your sales page for the book Aaron (and no, it wasn't an affiliate link). And I did that to thank you for teaching me so much for free on your blog, and also for a price when I bought your book. (See my intro thread #2 comments.)

By contrast, I've linked to Jim Boykin's common backlinks hubfinder tool in the past, but would no longer do it. I'm not removing the links because he earned them at the time because of the value he provided then, but I'm not giving him any more either. And I may provide a disclaimer that the link now goes to Jim's sales page and/or nofollow the link. It's nothing personal about Jim (whom I have lots of respect for as a great SEO), but I'm no fan of the bait-and-switch.

March 18, 2008 - 9:22pm

It'll be interesting how algos adapt to things that grab links then die off. For instance, suppose your well linked SEO for bloggers piece suddenly saw a drop in its link acquisition rate, because it went private. How would SEs treat that?

It would keep ranking for quite a long time in Google's current algorithm. But that may change over time.

Also keep in mind that just because it went paid would not mean that it would stop getting links, just that the rate would slow drastically.

March 18, 2008 - 8:23am

Bait-and-switch would only work with absolutely exclusive material (like perhaps the video mentioned in your first line).

Most stuff isn't absolutely exclusive.

There will always be someone operating in the "bait" phase killing the business model of those who are already in the "switch" mode.

Once "free" is out of the bag, not even the wiliest business model will be able to tuck it back.

Can for example a video sharing site go this route? Sure. But it's gonna be killed by the next wave of totally free competitors who do not yet care about monetization (hoping they'll just find a method somewhere down the road).

Bait-and-switch is a short-term wallet-filler but also a slow death.

March 18, 2008 - 9:23pm

There will always be someone operating in the "bait" phase killing the business model of those who are already in the "switch" mode.

Once "free" is out of the bag, not even the wiliest business model will be able to tuck it back.

Consider that some people bookmarked my SEO Book order thank you page on social bookmarking pages for years. And that did not stop a dozen or so people from buying SEO Book every day.

March 19, 2008 - 12:02pm

You're not comparing like with like when you mention your SEO Book example.

In that case, the legitimate offer is far easier to find than the thank-you page. (Even if I use the query "free seobook" or "free seo book" in Google, your site comes up at or near the top.) Many people won't take the time to search high and low for a free alternative, they will settle for a conveniently available, fairly-priced product instead.

Plus, you have a one-man band image, and people don't really feel comfortable screwing individuals, while they certainly don't have the same qualms about corporations.

However, if we are talking about business models in the same context, it goes like this: legitimate, well-known pay services/resources will need to compete with legitimate, well-known free services/resources.

People will continue to migrate to the free alternative when it provides similar quality (and has more buzz thanks to being free). Past glory won't keep even the biggest players on top in the long run if they are continuously under siege from comparable free alternatives.

March 19, 2008 - 12:48pm

people don't really feel comfortable screwing individuals

I won't, but I could show you email threads where I helped people for hours, they thanked me for helping them, and then did a reverse charge on their credit card in spite of me offering them thousands of dollars worth of consulting as a free bonus with a $79 ebook purchase.

People will continue to migrate to the free alternative when it provides similar quality (and has more buzz thanks to being free). Past glory won't keep even the biggest players on top in the long run if they are continuously under siege from comparable free alternatives.

But part of comparable means the ability to have perceived value and build trusting relationships with customers. The after-purchase support matters.

The people who I help for free are typically far less greatful and far less likely to listen to or respect me than the people who pay me $1,200 for an hour and a half consult.

In fact, I have never had a dissatisfied consultation client since I put my price at $300 an hour or more, but I did have 1 reverse charge when I was selling for $40 - from another person selling SEO services who did not even know how to rank websites and even used fake testimonials from his own sites in his sales copy. :)

One "broke" slimeball who kept emailing me for unlimited free help was even featured in a book of self-made multi-millionaires - as a person who got rich selling an information product no less!

I have had thousands of people who could not get enough free advice from me via email, who were unwilling to value their own time the same way they tried to value mine - as being worthless.

There is a lot of great stuff on the web that is free...I do not dispute that, but much of it is polluted or wrapped in ads. I would rather buy from a company marketing their own products than a company marketing whoever can afford to pay the most per a click. And eventually you are buying even when it is free...your time has some intrinsic value and you can never get it back.

March 18, 2008 - 10:02am

It would have to be very very low price points and would work only if you had very loyal customers who choose to support the content provider since inevitably they could get it free anyway via torrents / file-sharing (without a doubt, any paid media is available freely on torrent sites).

March 18, 2008 - 9:25pm

I was thinking of selling it as part of a collection - like for a membership site. People might be able to download pieces, but if they don't know what all is in there they don't know what they are missing out on.

March 18, 2008 - 4:02pm

Aaron-

I think people far to often underestimate the power of word of mouth. If a business can create and deliver on a consistant basis a top notch client experience that is special surely that will create a natural buzz. It is not enough to provide customer service but to exceed expectations in product and service. Make it special and unique.

I recently had a great experience at a restaurant. That experience really made me think about how I could apply some of those charms to my own practice. I was so over the top about the restaurant that I had to blog about it (which I have never done before). Now that is powerful marketing for that restaurant, and it cost him nothing.

March 18, 2008 - 9:27pm

But, as a company, there is a limit to how many relationships you can have that have meaning and interactivity. Like free tools, etc. scales, but if you are interacting with the customer there are only so many customers you can interact with. This is why I think the free then charge model is a great strategy...it builds whatever free can get you off the start, then uses that as proof of value for selling it as part of a more meaningful exclusive package down the road.

March 18, 2008 - 4:35pm

So here is the question...

How much would the aged content on this site be worth?

If you charged $1 for every blog post over 6 months old, how much revenue would it bring you? How much "good will" & links would it cost you?

Maybe your wallet would get pretty fat.

March 18, 2008 - 9:29pm

I don't think you can charge $1 for everything though...I think you are better off charging 1% or 2% of the people $100 or $50 each, but just for your best stuff.

I think you still need some stuff that is stuck at free to enable aggressive integration in the active parts of the web.

March 18, 2008 - 5:05pm

Its not bait and switch if the product is consistent and the terms are defined at the outset re: sliding scale etc.

I think this is an excellent revenue model for the net. If the material is voted as high-quality by the net community, then it has a market value. So the premium people would then pay would be backed by the products' popularity. win win

March 18, 2008 - 9:35pm

That is how I view it as well Christen. Letting the community decide to vote on what is worth the most is an easy way to ensure you are selling what is valued the most.

March 18, 2008 - 9:44pm

Great post Aaron! Since you mentioned "this system" and subdomains.. I have an off topic question. How did you implement subdomains on Drupal? All the current suggestions on the official Drupal site are not really straightforward, but more like workarounds. Care to share? Thanks!

March 18, 2008 - 11:35pm

Hi Gemini
I have two different Drupal installs, which makes it easy for me to make the sites different. Like training.seobook.com has left rail navigation and the root domain has right rail navigation.

March 19, 2008 - 1:17am

Right, so it would keep ranking now, but then how relevant would it be? Considering the trend/philosophy of instant-gratification, how many people want to click a link to be told 'pay for this article'? My bet is that most people click back and check out the next "seo for bloggers" piece. Why?
Because:
1) They don't know what they're missing. So why pay for it?
2) The competition is 2 clicks away, and free.
3) I want it now.

And so as the clicks on the back button accumulate, that should affect the rankings. Peter Norvig, as I'm sure you know, recognized that Google track this...

March 19, 2008 - 6:24am

1) thousands of people talked about it and linked to it...so they know they are missing out on something
2) the competition does not typically have thousands of people linking to them
3) and those who won't pay deserve an inferior service

If you own an idea you become a navigational query. Nobody will outrank me for "blogger's guide to seo" in the US unless my server goes offline OR Google engineers hand penalize me.

March 19, 2008 - 7:11am

The only way to know if it works is to try it out. It would be interesting to see the results of this.

March 19, 2008 - 8:40am

I won't do it for the blogger's guide, but it may be a strategy for future featured content of some types.

March 19, 2008 - 5:03pm

Hi Aaron,

I imagine that in order to get people to eventually pay for something that was once free, the content would have to be pretty remarkable. Yould would also have to access to a large audience. However, what's the incentive? Why do I want to pay for something that I'm sure I can get somewhere else (especially if it was once already free).

As our attention spans get shorter and shorter, do you really think that you will be able to interupt people to ask for their credit card information? I don't think so. All I have to do is hit the back button. If as Chris Anderson suggests, we are moving to a free economy then I would argue that a paid subscribtion model is counter intuitive and can actually hurt the brand.

It's one thing to tax latecomers but it is quite another thing to charge for something that was once free. You are now adding an extra step that I have to go through AND you are charging me money for it.

Any other site could take the content (video, etc.) and promote it themselves to become popular in a partiuclar niche or perceived market gap. Perhaps you will make money at first but overtime as your content dilutes your revenues will decrease.

Your SEO book has been selling because you are considered an authority. You are a well known, trusted, and respected source of information. The more "walls" (barriers) you set up the the less of an authority you become, because your content will reach a smaller audience with limited attention spans.

~Jacob

March 19, 2008 - 5:38pm

But not all the content belongs behind walls. Only some of it. And perhaps many of the best pieces.

March 20, 2008 - 12:46am

I would normally be quite upset if my rear end was sore, but this doesn't sound bad at all.

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