Posted by Bill Haenel on 17-May-05

Paid Content: On giving away razors in order to sell razor blades

When will they ever learn?

I've been watching the great and complicated irresolution (whether or not to charge for content) for several years now. My first exposure came while I was working as Web Manager for North Country Public Radio in Canton, NY. There was a stink in the air because it was getting difficult for many of the big city public radio stations to come up with enough money to pay for their live streams, and they needed ways to generate revenue - fast. Naturally, the inclination was to look for hidden opportunity.

"Well, guys...we need some dough."

"Yup."

"Where can we get some?"

"Dunno."

"Any ideas?"

"Nope."

"Wait...hey..I've got it!"

"What?"

"Well, you know all that material we put online that people love to read and listen to and stuff?"

"Uh, yeah."

"OK. So they already use it, right?"

"Uh, yeah."

"So instead of giving it away, we can..."

"Yeah..."

"We can..."

"Uh-huh..."

"We can sell it!"

"..."

"Good thinking, right?"

"Well kind of. Except, they already get it for free...so why would they want to pay for it. I mean, really, we've already convinced them they have a right to get it for nothing. Now we've got to convince them it's a privelege worth paying for. This seems wholly illogical and will ultimately leave us with less traffic and result in our patrons mistrusting us."

"Oh. Okay. Well, let's do it anyway."

"Yeah. Good idea."

And so it went. About that same time, other folks were thinking the same thing, tried it, and failed. Good thing, too, because it gave some pubcasters a moment to pause and think about what they were getting into before they got into it. There's still a buzz about it now with the big NPR crowd, but it seems to dull by the day.

The thing I really don't get is why, when ad sales and values are up, does the New York Times need to start locking up portions of their news, keeping it only for those who can afford it?

There are a number of problems I see with this strategy:

1. "Information wants to be free." Although they are a commercial organization, they do provide a Constitutionally protected service to our citizens. Our nation's fourth estate is key to our properly functioning democracy. For details, see any search engine for keywords, "What happens to democracy when public information is only to available to rich people", or some such thing.
2. Online ad sales are up, most likely due in great part to the increasing value of internet traffic of all kinds. We are willing to pay for value. Reducing traffic to portions of your site seems to me a funny way of maintaining the value of your ad space. Maybe I'm missing something that much smarter folks see clearly.
3. Visitors expect the content of your website to be available without limitation. To most visitors, the web is like a library. Putting a locked gate and a toll booth at the end of your driveway leaves visitors feeling unwelcome and excluded. That is, of course, unless they are exclusive members. Either way, the revenue to be gotten online does not come from "special delivery", it comes from "free delivery" of your product, in an ad-wrapped package.

Here's my recommendation for folks who want to make money online: Create something of value (the razor). Make it available to people who see the value clearly. Let them learn to depend on it. Now, when it's finally going well, turn that value into revenue by telling other folks that they can advertise in your space (the razor blade), to your visitors, who also see the value of your advertisers' products and services. Sell your content to the advertiser, not the visitor. Increase the value of your website by making your content essential and easily accessible. Sell razor blades, not razors.

Well, maybe I'm wrong. Without a doubt I'll be watching to see what happens next. Then I'll know for sure.

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