There used to be a pub in Hong Kong called ‘The Time is Always Now’. You can’t argue with the logic and in the good old days, if I was ever wondering if it was the right time to go for a drink, it provided all the justification I needed.
Investing in a cheeky mid-afternoon beer and investing in a new paid-content infrastructure are a little different. And while it hasn’t always been the right time to bet the farm on a paid-content play, this is probably the best time in 25 years to try charging for your content.
Any ‘BEST TIME IN 25 YEARS’ statement demands an explanation, so here are five things that should help convince you that right now is the right time to invest in a paid-content strategy.
Netflix & Spotify
One of the strongest driving forces behind the rise of paid content is the ready familiarity people have developed with online subscription services over the last few years. Leading the field are entertainment streaming services Netflix and Spotify, but consumers are paying monthly for everything from socks to shaving gear. Deloitte reckons the average UK consumer will have four online media subscriptions by 2020, up from just two now.
The New York Times
The New York Times is the poster child of the reader-revenue revolution, mainly because it has $1 billion in subscription revenues. More exciting, its digital subscriptions business has been growing at an average annual rate of 47% helping the paper to radically reduce its dependence on digital advertising revenues. And it’s not just the New York Times that is seeing success with paid content – other newspapers in the US and the UK, consumer and B2B magazine publishers, and digital pureplays around the world all have a positive paid-content story to tell.
Facebook & Google
The publishing sector has woken up rather abruptly to the fact that The Duopoly have monopolised the market for digital display advertising; last year’s forecasts put Facebook and Google’s combined share of global digital ad spend at 84%. Platform publishing briefly offered some hope, but alas, algorithm changes have killed the dream of meaningful revenues from distributed content. Put ad blocking, ad fraud and ad fatigue into the mix and ad funded makes less and less sense.
Brexit & Donald Trump
For me, it’s hard to find the positives in the UK referendum results of June 2016 or the election of America’s 45th President. But both events drove up reader revenues at a number of leading publications. One explanation for the Trump Bump and the Brexit Bounce is protest purchases, people buying liberal publications as a show of defiance. But another theory has it that in times of turmoil, when the status quo shifts, people turn to trusted information brands to tell them what is going on and trust is worth paying for.
Not everyone is onboard with paid content yet. Some publishers would like to do paid content, but don’t know how. Others are terrified that their audiences simply won’t cough up. A few are just happy to milk the digital advertising cash cow until it falls over. Whatever the reason, your competition probably isn’t doing paid content yet and now is the time to get a head start. And if they are doing paid content, don’t you think you should be thinking about how to catch up?
The publishing press is full of ‘Pivot to Paid’ stories cheerleading a seemingly endless stream of high-profile paid-content projects. As I wrote in The InPublishing Guide to Paid Content Strategies, in an industry that has seen more pivots than a seesaw factory, you could be forgiven for wondering if paid content is just another publishing fad.
While there is an obvious fashion for paid content right now, it is being driven by a welcome return to first principles – asking people to pay for a valuable product.
The weakening of the relatively recent advertising-only business model of publishing has underlined the need for a mix of revenue streams, but charging people for quality content has always made sense. Advances in online payment mechanisms, positive consumer attitudes to paying for quality content and a negative advertising revenue outlook have simply conspired to remind us.
Peter is the author of The InPublishing Guide to Paid Content Strategies, published in June 2018. There is currently a 20% early-bird discount.