Paywalls and Tangibility

Paywalls and What Do People Own (image by Ralphrepo)

With the newspaper industry flailing, television revenues tanked (although are making up for it now), and music hoping Eminem some how saves the whole industry–in next 12 months we will see paywalls go up like the Great Wall of China.

Walls in China were popular, first put into practice by the Qin Dynasty started by the first emperor Qin ShiHuang where he sent scholars to work on the Great Wall (he deemed these people unproductive in normal life). The Han Dynasty took control after the Qin in 206BC who then extended the Great Wall westward through the Gobi Desert. Finally the Ming Dynasty who built the biggest, longest, strongest, and most ornate sections of the Great Wall. These are the walls we are familiar with today.

Modern Old Media

Media has similar dynasties which always attempts to create walls. First the printing press that destroyed the campfire. ASCAP feared that radio would kill records thus spawned massive lawsuits and ultimately BMI, video then VHS that was going to kill TV, to cable that was going to kill Hollywood and the theater.

Finally the internet which changed everything. The internet is the digital form of the great wall that we see today. The biggest, strongest, longest, and most ornate form of media out there. It encompasses it all.

That leads me to the latest buzzword for the movie, television, music, and the print world–the mighty paywall.

You Will Pay One More Fee

Each media industry is hoping to find a way to convince consumers that their content is worth a fee, subscription, or payment. One of the things I’ve learned in pricing is that when you price something you should always start high because you can always go down–very seldom can you go up.

Herein lies the problem all these media companies have essentially reset the button to zero. With the rise of technology and the internet they gave their content or the content could be gotten for free. There was a time when you expected to pay for content. It had some value, both you the consumer and the creator had this understanding. Then something changed–technology, bandwidth, and the internet.

I think something deeper has happened. It’s not only technology but it is our experience with content. In the past the content we received came in something tangible. You went to the store and bought a CD you got to unwrap it, look at the insert, put it in your music player. You subscribed to a newspaper there it was waiting for you on the front porch. You went to the store and  bought a DVD, took it home and put it on the shelf.

The Intangible Problem

We are moving closer and closer to a world of bit and bytes. A world where the content, the things we own, even our money is essentially digital. We don’t hold it, we don’t put it in our pocket, we put the things that control it or store it in our pocket. From credit cards, iPods, iPads, DVR’s, and even our phone.

Ownership increases perceived value to us: As soon as we acquire something we start to develop an attachment to it. Just the sheer fact of ownership increases how much we value it – we seem to develop a relationship with objects.

Do these digital items we purchase cross the ownership threshold? What about the movie you just streamed? Or the song you just played on Pandora?

Do I Own Content?

As your music is digital, your movies stream on demand, your news comes instantaneously your feeling of ownership and tangibility diminish as well. With technology and bandwidth near zero and as we move further away from a tangible item in our hands it’s easier for us to lose this connection.

What I see these companies hope for is that consumer will want to pay for individual services. You have your music service, your internet video service, your news service, your gaming service, and any mix therein. Add to this your cell service, your mobile internet access service (now metered if you are with At&T), and even your gym membership.

The Coming Paywall

Every major media vertical is struggling with coming up with a way to get you to pay for something that is virtually free right now. The first to traverse this was music with Itunes and now soon to be other music services. For video its HULU and Netflix. The newspapers are going to jump in here real soon and in my estimation go draconian. Although there was an interesting story about Google launching Newspass Paywall recently.

While all that is great I still think all these media companies have this larger issue at hand. Technology and to some extent the industries themselves have conditioned us to not tangibly own the content.