on charging for content

15 September 2010

Rupert Murdoch has sent shockwaves through the publishing community with The Times new pay-wall.

Whatever people think about this, Murdoch’s decision is a response to a challenge that we, in the think tank community, share with publishersfree content costs money to produce.

What are the options?

A number of business models are available and could be considered:

Freemium model: the freemium model involves providing users with alternative ‘plans’ to access different levels/layers of content or services. For example, all users may get a newsletter but only those who pay get to read the latest articles; or only those who pay get guaranteed seats at events; etc.  Free, Silver, Gold, Platinum think tank membership?

‘Free’ helps to build market share. Once you have a good share of the market you can monetise it via upsells or adding new models. Chatham House is a good example.

Subscription model: the subscription model provides a standard service for a cost per day, month, year, etc. It is similar to the Freemium model only that it does not include free content.

Affiliate model:  the affiliate model refers to organisations that ‘drive’ traffic to someone else who charges for specific products (goods/services) or who values traffic and is willing to pay. For example, we could redirect to Amazon or to other researcher portals that need hits to get funds from donors.

An organisation like ODI could be an excellent affiliate of traders and users of development knowledge but also of short- to mid-term programmes that might not have time to direct sufficient traffic to their sites without a strong global brand like ODI’s . IDS has done this via its knowledge services (ID21 and Eldis, for instance. Other think tanks could re-publish their articles or blogs or ‘advertise’ their websites so that their users may be able to find their way to them.

Virtual goods model: the virtual goods model involves developing ‘online’ products such as online publications, downloadable programmes, network services, online platforms, M&E tools, etc. User would pay for using these products just as they pay for iphone apps or Facebook virtual gifts.

In fact, a think tank could develop iphone or Facebook apps or virtual gifts/goods for people to send each other or for them to participate in international development research -by providing data, for example.

Live-gig or publication model: while CD sales are falling, live-shows are soaring. The live-gig model would imply charging for events with keynote speakers and preferential ‘VIP’ or ‘Back Stage’ access to meet the experts. A think tank could organise Hay Festival style events or a VIP meeting series targeted at a paying audience. TED charges quite a lot for its events –and there is a waiting list. The live-gig model also includes capacity building activities and workshops in which think tank experts deliver the content of their research directly to the users. In ODI I have done a bit of this via its Outcome Mapping and Research Communications workshops.

Equally, people might not be willing to pay for content on the internet but are still keen to buy a printed publication. This might mean going back to basics (for some think tanks) but it is certainly a good idea to consider. Standpoint for instance, is published by a think tank. And in a way, so is Harvard Business Review.

Network effect: based on the positive network externalities that come with more users using a particular service –and that increase the value of the service way above its price (e.g. as more people use delicious or a particular mobile phone provider, the more valuable vis a vis price it is for users)

Business to business/government e-commerce: where a think tank (functioning as a consultancy) provides services/goods directly to other organisations (NGOs, research centres, donors, governments) including raw data, literature reviews, background work, etc. –that is too expensive or too difficult for them to carry out but that they need to carry out their core business. The Economist Intelligence Unit is a great example; Apoyo is another in Peru.

Think tanks could follow one or more of these but further analysis is required. Some principles/guidelines need to be observed:

  • You should not charge for everything and you should not charge everyone
  • Those who MUST read you content must be able to read it –burden free (which is not the same as free)
  • Those who can pay and are willing to pay should pay
  • Those who can pay and are not willing to pay (and are not in the MUST read category) either do not value your work enough or were never really our target audience –so let’s not worry about them
  • Developing countries (or final beneficiary country audiences) should always be able to access all relevant content

Building walls in the right places

The walls that a think tank builds around its content must be carefully erected to, among other things:

  • Facilitate/encourage payment
  • Maximise exposure of ‘sample’ or ‘tempting’ content
  • Facilitate social media access through a ‘back door’ (compatible with ODI’s ‘being there’ approach to communications)
  • Encourage cross-posting or links to other sections of our ‘space’
  • Ensure maximum exposure audiences to our work for key through various media or channels to facilitate capacity development

Issues to explore

There are a number of issues that one should explore further:

  • Identify and review different business models as they are being implemented by similar industries and by other think tanks
  • Revenue/profit potential from different charge-for-content business models
  • Compatibility with your own business model; and implication of charge-for-content business models on yours. In particular, is it possible for an organisaiton to run parallel business models?

I think it is worth a try.