At a recent Advertising 2.0 conference in San Francisco, Barry Diller - the chairman of Expedia and the CEO of IAC/InterActiveCorp, an interactive commerce conglomerate - boldly predicted the internet will be a ”paid system” in three to five years.
In his presentation he pointed out that so far, content and service providers had been ”afraid of being dinosaurs and slapped everything up for free". That’s true.
However, his belief that within three to five years everything of value will be paid for on the internet, particularly in these recessionary times, is somewhat wishful thinking.
First off, particularly with news sites, you are going to have to get people to pay for a service they have previously received for free. That’s a big ask.
Let’s say a newspaper decides to only allow full website access to subscribers; it has to figure out how. For instance, if I subscribe to secure full access to the newspaper site, what about my partner and two children; will they be able to have full access through my subscription? (I pay for the telephone line to our house - but we all use it.)
As such, while I and my partner are at our respective jobs and my son’s attending university, I would expect us all to be able to access the paid-for website wherever we were. It would be just unacceptable that we could only access the newspaper’s website when at home, or that away from our home only I could access it as the bill payer.
As well, if a media organisation decides to restrict access to its website by demanding payment, will the competition follow suit? Closing off or limiting access to your website, while your competitors continue with unrestricted access, could quickly lead to a situation of minimal subscription revenue, greatly reduced web traffic and no advertising banners.
A few years ago a New Zealand daily newspaper’s website placed a ‘premium access' rating on some of its online copy, for which you had to pay to read. The concept didn’t last long and I’d say the essential reason is that people just would not pay for that access.
That experiment took place when property prices were rising, the share market was booming and jobs were there for the asking. So, in these belt-tightening times (and let’s not forget the economic and social disruption of swine flu) I don’t think people are going to start paying for what they previously received for free over the next three to five years, or for quite some time to come.