It’s understating things a little bit to say that “the internet” has disrupted the market for content and information. If you subscribe to the adage “you get what you pay for”, it’s not surprising that the quality of content, measured both by production and accuracy, leaves something to be desired in today’s market.
Internet users, for better or worse, have been conditioned to believe that “content is free”. From it’s early days, when no models for securely exchanging funds existed, necessity required that publishers turn to monetization models based mainly on advertising. The result is the status quo we live with today.
The downside of the advertising model
Ads are starting to smother content in the market, and it’s not just afflicting smaller publishers. How many times have you been annoyed by pop-up ads on Yahoo or Forbes? How many 30 second pre-roll ads have you sat through to watch 30 second clips on CNN? Publishers: ads annoy your users and drive them away. As you try to increase your ad inventory, your readership drops as those users flee the insanity.
For the vast majority of publishers, the advertising model doesn’t work – mainly because of the way the internet advertising industry (Google) has evolved. Google, who produces and publishes very little, earns the lion’s share of revenue off the backs of millions of small and large publishers. In the process they learn a tremendous (and often scary) amount of information about consumers. Consumers are becoming more and more wary of the “big brother” nature of internet advertising. As a result they seek other information outlets.
Will they pay?
One of the earliest warnings we received when we were contemplating nibl was that we were likely trying to swim upstream. Paying directly for content was preposterous. People expect things to be free and trying to get them to pay for it was folly. However, people are paying. Examples like iTunes show that people will pay as long as you price the content appropriately and don’t require long term commitments.
This sentiment has mainly arisen in the market because previous attempts at getting users to pay for content online have had fatal flaws. Publishers are stuck trying to fit the square peg they were using in their legacy print businesses in the round hole required by todays electronic consumer.
The rise and fall of “Registration Required”
The earliest attempt at alternative monetization was the “registration required” model. Gather email addresses, build lists and demographic information, and sell that as a way of subsidizing content.
The problem with that model is that they often find that Google can provide that same information to their competitors at a lower price, and they also found that users hate giving away their email addresses. Whole cottages industries have sprung up to battle spam – when users see “Registration Required”, they think “SPAM”.
Subscriptions and Paywalls to the rescue (or not)
The industry is currently in what I call the “Paywall” era. For the first time they are building direct commercial relationships with their consumers through subscriptions. Many large publishers are finding moderate success with this model. However, it’s not working for everyone, and the bounce rates for subscriptions are extremely high.
My local paper, the Austin American Statesman, recently implemented a paywall for their content. I have no idea how it’s working for them, but the last time I tried to view an article the lowest I could choose to pay was .99 cents for a day. This doesn’t sound like much, but when you add to that the requirement that I share my credit card information and email address it sounds like quite a commitment, and more often than not I’m going to bounce. It’s the equivalent of turning away cash customers at a store – it’s insane, but that’s the way the business works today.
The nibl Model
The fact is that for small transactions consumers do not want to commit to a long term relationship with a publisher. The internet needs the equivalent of a newsstand. I should be able to buy something from any publisher without having to repeat the process of registration and payment, unencumbered by a long term commitment. Over time, as I begin to see the value of individual publishers, I might subscribe to save money, but that shouldn’t be the only way I can access content. Incidentally, that’s what we designed nibl to facilitate.
nibl acts as a trusted third party facilitating transactions between publishers and consumers, protecting consumer privacy and adding commercial value to publisher content. We turn paywalls into pay bumps that consumers are more likely to step over.
Wrapping it all together
Advertising with be part of the information industry forever. However, it needs to be balanced with other methods of monetization or the content will get lost in the noise and consumers will go elsewhere. nibl provides a new method for monetization that bridges the gap between advertising and subscriptions, and allows publishers to monetize content in a way that consumers will more readily accept.
If you want to see how well nibl works, give it a shot as a consumer. Add $5.00 to your nibl account (it’s still your money, refundable if not used after 60 days), and spare a guy a quarter by clicking below!