The Cult of Free

Over the next several weeks, I’m going to explore some of the tough challenges that face those of us who are attempting to do business online. A few sacred cows are going to get slaughtered, sliced up into steaks, and tossed onto the grill (with a little of my secret marinade for flavor), so if you’re a vegetarian, you may not like some of the issues I raise.

On the other hand, if you believe — like I do — that the Internet is a fabulous medium for launching and growing a profitable business, think along with me on how we can creatively overcome some self-imposed barriers that have held us back from profitability.

Here’s my first obstacle. It’s what I call “The Cult of Free.”

We have this nice little mantra going online that everything should be free on the Net. All articles, research, music, news — EVERYTHING should be free.

Here’s my question: Why?

I pay $21 per month to get The Boston Globe delivered to my doorstep, despite the fact that I can read all the same content for free online at its web site.

I pay $30 or so per month for cable TV, despite the fact that I have “free” TV available via the major networks.

I regularly shell out $3 to $10 per copy for various magazines, almost all of which are available online, again for “free.”

I regularly buy CDs, despite the fact that I could download the MP3s for “free.”

I’m happy to shell out $20 to $40 for a business book any time I find an interesting title.

If you are at all like me, you feel no compunction for PAYING for good content OFFline, but consider anything other than “free” content ONline to be unthinkable.

Is online content somehow inferior? I think in many ways it’s better. It’s fresher, far more navigable, searchable, and researchable than offline content.

Is it because it’s free to produce? I can assure you that it still costs money to produce original, high-quality online content, just as it does for offline content. OK, we don’t have to pay for print runs, but we DO have to pay for editors, servers, ad-management systems, and email delivery services.

Actually, I think the real problem is that we are spoiled. We’re spoiled rotten, and we’re addicted to all that free content.

Not too long ago, we published “The ClickZ Guide to Online Advertising” in a PDF format — initially for free. It contains 200 pages of great content. Lots of updated ClickZ articles, all pulled together in cohesive, well-thought-out chapters. It has a well-organized directory, too. Quite a bit of value built into that rascal.

Since it was “free” (actually, the sponsors paid for it), a number of recipients felt somewhat entitled to it.

I got email from some people who actually whined that it was too long to scroll down on the screen! Well… isn’t that why God created laser printers? Sheesh! It was as if we owed them something.

So the cost of “free” is manyfold: You can’t get yourself out of it because that’s what people are used to. Your content does not hold the same value to your readers vis-`-vis the same content that people pay for, and people start getting that entitled feeling.

But the most important problem of the “free” Internet is that it knocks out a HUGE revenue stream: sales of content.

Just think how much more prosperous most online companies would be if they could figure out some way to get even a nominal payment for their content.

I’m not sure I have the answers here but will attempt to point out an example or two of those who have dared to break the mold.

Just down the dial from us (oops, wrong medium!) is a New York-based outfit called eMarketer. It wasn’t that long ago that it was striving to make a buck in the ad-supported, free-content game catering to online marketers. It did OK, but nothing worth writing home to mom about — until it came out with an eMarketer Report that was essentially a review and analysis of all the research companies’ reports on a particular online topic.

It offered the report in both PDF and print versions for just under $800. The first one did well enough to encourage eMarketer to keep producing more, so it did.

As time went on, it abandoned the free-content biz and, if I’m reading its web site correctly, has basically gotten into the biz of creating a site whose content acts only as a magnet for whetting the appetite of potential buyers for its myriad of reports. It has built a huge sales team selling a whole bunch of reports to corporate America.

And it has reproduced that content in a number of different ways in order to sell it in whatever way is most palatable. Why, you can buy a particular chapter or just the table of contents if that’s all you need.

Some online publications make their content free for one day, but if you want to read it in the archives, you have to pay a nominal fee for each article you read. Search Engine Watch, Wilson Internet Services, and the Internet Stock Report have all successfully maintained free ad-supported content AND separate, paid subscription-based content.

Unfortunately, there aren’t a whole lot of other examples to point to.

I’ll confess to being a total wimp on the issue. We haven’t developed a paid newsletter model at ClickZ. We don’t charge for viewing archived issues. Heck, we’ve put two books out, and both were free.

So please don’t look to us as a shining example in this regard.

Perhaps I could look to you. Do you know of any successful examples of online publishers who have developed nonadvertising means of monetizing their content? If so, please email me at I’d like to profile several examples in the near future.

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