News and Updates on Quantum Partners and Projects
• The Future of the Freemium
July 14, 10: Quantum Media principal Carla Graubard recently attended the “Future of Publishing” event organized by the Wharton School of the University of Pennsylvania. At the event there was much discussion on the best way for media companies to get paid for their online content.
While much of the publishing world continues to scramble to figure out how to make money with online content, Gordon Crovitz, a former publisher of The Wall Street Journal and executive vice president of Dow Jones, and current co-founder of Journalism Online, has a plan.
At the recent event Crovitz contended that it’s not a question of if one should charge for online content, but of how. According to a November 2009 study by Boston Consulting Group (BCG), 48% of Americans said they would pay for online content, though few do so now.
Crovitz favors a freemium model, under which much content remains free, but consumers can opt to pay for additional content, or certain articles. He claimed that the most engaged users will be willing to pay for full access, while the less avid readers will be satisfied with the free content. Crovitz suggested that if publishers could convert just 10% of their most avid readers to paying customers, they would have a profitable model - and a great way to restore the value of original content.
In order for the freemium model to work, it needs to be easy for consumers to use. Crovitz suggested the simple solution of placing a small icon next to content that readers have to pay for, so with a few clicks the deed is done.
Crovitz stressed that the core relationship is between the reader and the brand - not the medium or device. The time to start charging for online content is now, said Crovitz, not only for the added revenue stream, but for the future value proposition of the print model.
Crovitz concluded his presentation with a warning about “What’s at Stake,” - the need to develop a sustainable business model for creators of original content who can no longer rely on advertisers alone to cover the costs of creating valuable content.
*All slides displayed in this article were taken directly from Crovitz’s Wharton presentation. Credit and thanks to Press + 's Crovitz.