Crikey pointed out this interesting article by Lars Bastholm* about the money troubles possibly looming for the content industry – "content industry" being Bastholm's neat term for the mass of commercial media on the net (press websites, TV streaming, etc). Wait, money troubles? What?
Although the content industrialists have been hoping to support their online content via online advertising, Bastholm says this might not actually work. But if online ads aren't worth enough, where does money come from? There's two big ideas: micropayments, where people pay a miniscule amount of money every time they access content, or a subscription / licence fee model, where people a larger amount of money at regular intervals.
Bastholm's big argument is that "micropayments will never work", because Gen Y aren't willing to pay for anything. I think he's wrong, though. The whole point of micropayments is that the payments are tiny and invisible, and that's the key. There's a real psychological difference between spending $10 all at once and spending it in $0.0001 increments, the same as there's a difference between eating a whole cake at once versus eating it slice-by-slice. People don't like paying $150 for a dictionary, but paying a fraction of a cent for every definition you look up? Much easier to swallow.
If the prices are low enough and the mechanism makes it easy for you, people will pay rather than pirate. Even Gen Y kids will pay – isn't iTunes the proof? Most people are willing to spend (a little) money for legality and convenience. People bought a Nine Inch Nails album via iTunes, even though it was available free & legal via nin.com!
Anyhow – Bastholm wants to abandon paying for individual websites, and instead to implement a "content fee" similar to the television licences paid in Europe and elsewhere: one unavoidable payment to cover everything, like a tax. He admits that Americans, notoriously tax-phobic, are unlikely to accept a new fee to access what's now free. Yet he envisions every American paying an extra $20 a month or so, which is then distributed to the content producers via some kind of $$-per-popularity formula.
That might be a fair model, but wouldn't it be incredibly complicated? Not to mention, impossible to work across the net's (lack of) international borders? Or will the web of USA content just wall itself off from the rest of the world? (This might already be happening – I'm constantly pissed off that I can't watch television via Hulu, for example.)
I don't think a licence fee is practical. And mini-licence fees for each website (or network of sites) are already unpopular – people hate subscribing to websites! That might change if the big sites make it unavoidable... but I'm not convinced.
Micropayments are easier for websites to implement and easier for people to accept, I think. If the money has to come from somewhere, I'm definitely expecting micropayments.
Would you pay $20 a month for all your web content?
Would you rather pay a fraction of a cent per webpage view?
What's going to happen?
*LARS BASTHOLM: Lars the Red, Blood-Lord of the Ice Wastes of Fangthor, Chief Digital Creative Officer at Ogilvy North America.
