Lot of discussion recently about free content online versus charging for it -- ad-supported models versus subscription fees. Obviously, the answer is some combination of the two.
Here is a thought experiment, using one of the more powerful brands/products in online media:
What if ESPN.com put everything original they did under an Insider subscription?
Free: Commodity products like AP stories, game recaps, scoreboards (and scoreboard info like box scores) and fantasy games, plus anything video. They could also make free any hard news the site reporters break or report, which will be out there anyway as fast as they hit "Publish."
Subscriber-only: Anything original, which means -- basically -- analysis and columns, but I would even include blogs like TrueHoop or Rob Neyer or the NFL divisional blog group. And, yes, even Bill. Especially Bill. But we'll get to that in a minute.
They already put magazine content behind the Insider wall, along with a small selection of other content. Most notably and recently, they showcased Chad Ford's NBA Draft content -- not just his mocks, but his original reporting, too.
Here is the quandary of the current context, of course:
News reporting has been commoditized; as fast as someone can "break" something, I can post it here (with my take) or anyone can post it anywhere. (Happy to credit you for "breaking" it, by the way -- not sure consumers have ever cared about that. You would be much better off not worrying about the credit and making sure you got me to LINK to it. A link is worth more than "as first reported by" text credit. Much much more.)
But even as news reporting has been commoditized, commentary has been commoditized even further. You could read a newspaper columnist's take on the Dodgers in the LA Times or the Red Sox in the Boston Globe. Or you could read your favorite team blogger -- one of many that cover your team. Or you could read the message boards of your favorite team's best online community. Or, hell, just the tweets of smart fans. The terrific thing about this commoditization of commentary is that it has become far more of a meritocracy; the best stuff tends to win.
Sure, promotion on a highly trafficked site helps artificially inflate page views, but that remains in the short-term; the long-term trends point towards highly fragmented audiences going to the sources that serve them best (presumably with the best-quality analysis, however you define "quality" to you -- a cute turn-of-phrase, a smart idea, well-researched data). Long-term trends also point toward the power of passed links: What people you trust recommend you look at.
Back to my thought experiment:
Let's assume that the majority of ESPN.com's page views are coming from this commoditized "free" content -- headline news that folks come back to check 5 times per day, scores and scoreboard information, fantasy. You could continue to sell ad sponsorships on this content with little if any erosion of the audience size necessary to generate large sponsorship deals. (Take it from me: The Quickie was sponsored from time to time -- you missed out, Starbucks! -- but it was a rare piece of original content that WAS revenue-positive; compare that to the mega sponsorship of, say, Tournament Challenge.)
Now, after you have still sold out your sponsorship inventory on the free content, take everything original you have created and offer THAT for a subscription fee: Forget the piecemeal offerings currently available; this is EVERYTHING. It has incredible value -- the best columnists across every sport, real-time commentary and morning-after commentary and enterprise super-stories that are worth the investment. Everything original.
What percent of ESPN.com's 20 million unique visitors per month would be willing to pay for that kind of content value? 5 percent (1 million)? 10 percent (2 million)? More? (I don't have the existing Insider subscriber numbers to use as a baseline.) And what if you charged a nominal fee for all that content: They currently charge around $40 a year. $3 per month seems more than fair for all that high-quality content. That nets ESPN.com anywhere from $40-100 million a year, on top of the ad sales.
Now, the downside: Going behind the pay wall provides an opening to competitors to emphasize that they have FREE commentary! But if quality is going to be the differentiating factor between sources of commentary, it forces everyone to step up their game: If you're going to charge for your commentary, you better have the best stuff; if you're going to try to convince people that your free commentary is just as good (or better), you better have great stuff, too. I am somewhat convinced that most sports fans would simply consume both, even at nominal cost to them -- especially if it was only nominal cost.
(Actually, I would make everything related to Fantasy sports free, including commentary and analysis, because the fantasy landscape is SO competitive that you have to offer as many high-quality free services as possible. If you satisfy the fantasy consumer, you will make back any lost subscription revenue in selling sponsorships to reach participants; besides, it's not like ESPN.com would lack for original content if you removed fantasy -- still a ton every day.)
The larger issue is that pay walls remove the content from the wider conversation online. Set aside the issues with search discoverability -- I don't mean to minimize that, because it's huge, but our example property, ESPN.com, has never really been focused on optimizing its original commentary for search (note that I specify its "commentary"; ESPN.com's commodity content like headlines, scoreboards and team pages is VERY search-friendly, to their credit). No, it really makes it harder for people who traffic in passed links -- bloggers, message-board participants, people on Twitter -- to link to your stuff, because there's always that pesky "Subscription required" caveat you have to apply.
But here's the upside: See enough of those links -- and those caveats -- and soon consumers might start to wonder what they are missing by not having a subscription themselves. That, in turn, will create more subscribers; once a critical mass of folks are "inside" (no pun intended), the passed links generate even more value.
(Funny: You hear a lot of newspaper company executives talking very hostile about Google and Huffington Post; you haven't heard that kind of talk from online-sports-media execs... I suspect that's because they recognize the traffic that comes from Google and from folks who excerpt-but-link-back, like sports bloggers. Might not drive a TON of traffic, but it drives credibility.)
Again, this is just a thought experiment. My inclination is to say "Information wants to be free!" My inclination is to go to sites that offer me free content, rather than pay for it, because I think that every time someone puts up a pay wall, someone else creates (or can create) free content of equal value on the same subject (without ripping the other outlet off, obviously). But that's because there are very few places that have shown me that they are worth my subscription payment -- put something as valuable as, say, every original piece of opinion and analysis on ESPN.com behind a subscriber wall and I'd pay for that in a second. It would simply be too much content that is too good to be missing.
Maybe I'm cherry-picking my argument, because it feels like it would work for ESPN.com in a way that it wouldn't for other competitors in the online sports media world -- or certainly the news or entertainment world. Besides, none of ESPN.com's competitors have an existing subscription product to build off of, as ESPN does.
And, make no mistake: I see the potential downside -- what if consumers don't adopt? (It certainly would indicate something about the value of the original content -- "I like it, but not so much that I'm willing to pay for it.") What if consumers stop coming to ESPN.com, not just for original commentary, but for the commodity stuff, too? Honestly, maybe it would happen like that. But -- and, again, maybe this is because ESPN is a special case -- the brand loyalty remains very very high. I think that if anyone could do it, ESPN could do it.
And, yes, purely from an academic perspective, I would be very curious to know how many folks would pay, say, $3 a month to read Simmons. He does, what, a million or two uniques per column? Let's be absurdly conservative and call it a million uniques, in aggregate, over an entire year. If even 10 percent of those fans felt strongly enough about him to pay $3 a month, that's $4 million a year, which -- as the business manager -- I would gladly split 50/50 with my star, roughly doubling what I figure is his current annual deal. Yup, those are 10 percent of his readers.
I have mentioned this idea to folks around ESPN.com a handful of times over the years -- I bring it up every couple of industry shifts. Usually, it is dismissed as a crackpot theory -- for a lot of good reasons listed above. I'm not even going to commit to supporting it myself -- I just think it makes for an interesting theoretical discussion. You might not be willing to pay for a small fraction -- however high-end -- of ESPN.com's original content, but would you be willing to pay for EVERYTHING they do?
I guess you could file it under "Freemium" -- some stuff free, some stuff paid. Antenna TV: Free. Basic cable: Paid. "Sopranos" and "Curb Your Enthusiasm" and "Joe Buck Live": Pay even more.
Again, this is just a thought exercise, inspired by the current discussion over free versus subscription and the "value" of original content produced by high-end content publishers.
I can say this with certainty: Who in their right mind would try to make LINKING illegal? (Oh, a Federal judge? AWESOME.)
-- D.S.
UPDATE: Great tweet response from a reader about a terrific case study for successful deployment of a "freemium" strategy being Rivals.com.
How did Rivals pull it off? Three main reasons:
(1) Partly, it was the same reason that the Wall Street Journal pulled it off -- they launched with a strategy to make subscribing part of the service, right from the start.
(2) Partly, it was because they trafficked in, what was then, very exclusive information. It's the same reason finance and political newsletters still find a paying audience.
(3) Partly, it was because of the incredible message board communities -- incredible, in part, because the subscription fee was a hurdle to keep out the trolls and leave it to serious fans.
Hard to replicate now:
(1) Sites that might charge aren't launching; they are established (as free destinations);
(2) Info/intel -- even recruiting -- is simply too commoditized; you could not start Rivals or Scout in 2009 and expect folks to pay a subscriber fee;
(3) Great message boards are VERY hard to develop. They take years and dedication, which was all more available pre-Web 2.0.
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