Would You Pay for Twitter and Facebook?

A new USC Annenberg Center for Digital Future study found that 49% of respondents in their most recent survey used Twitter, but no one – 0% of those polled -- said they would pay to continue using the micro-blog site.

Director Jeffrey Cole said, "Such an extreme finding that produced a zero response underscores the difficulty of getting Internet users to pay for anything that they already receive for free”.

Of course, if someone asked me when the first pay road was built if I would pay to travel it, I would have said no.

My mother refused to pay for cable television because she believed TV should be free – you know, over the airwaves. It didn’t mean that she didn’t value television but just didn't want to pay for it.

Twitter will remain a free service because the beauty of Twitter is to form a social network with a group of people of your choosing and beyond.

Taken literally, paid social network services will not work on the Internet. I wonder how Facebook would have done if the same question were posed. Somewhat higher than 0% I imagine, but I don’t think the numbers would have been impressive as 500 million people now use Facebook.

I keep hearing Peter Drucker in my head when he told radio executives that the Internet was going to be a major deal – in thirty more years. Without a pay model or an effective ad revenue model, Drucker will turn out to be right as he usually is.

The USC survey of 1,981 Internet users also found that half "never" click on Internet advertising with 70% saying they find it "annoying." Although 55% said they would rather see web advertising than pay for content.

And on and on …

You can see why media companies are reluctant to bet the ranch on the Internet and digital beyond when an obvious revenue model has not emerged. One could argue that no one listens to radio commercials in six-minute stop sets and that would be a fair comeback.

But the issue going forward is how do you monetize the space that consumers clearly claim as their favorite way to get entertainment, information and stay connected.

When Rupert Murdoch ordered his News Corporation publications to put up a paywall, The Times of London lost at least 65% of its online readership. I am surprised that it wasn’t more because a lot of the information in daily newspapers is available for free elsewhere. As long as this is the case, it will be hard for newspaper publishers to charge for that which is readily available at no cost.

Publications such as Newsday construct paywalls to keep their print readers from defecting to online where they don’t have to pay for the content. So the theory is that some publishers – perhaps even Murdoch – feel the paywall will be a success if for no other reason it will hopefully stem the loss of paying print readers from becoming online freeloaders.

Then you have Wired and other niche publications that are finding their subscribers with apps that allow readers to access their favorite publications where they like to read – on iPads, Kindles and mobile devices. This area shows real promise.

The New York Times
thinks a metering system that will start charging you after a certain number of stories in a given month will work. But a meter will punish readers like me (and perhaps you) who read The Times extensively.

There are a few significant points to consider:

1. Online advertising is not that effective – click through rates are awful and that low standard allows media buyers to prostitute any digital publication’s rate card.

2. Search is a good business for the few, the proud and the monopolies such as Google and Microsoft.

3. If all that is available to businesses is the “freemium” model postulated by Chris Anderson then even the 30 years Peter Drucker predicted for the Internet to come of age as a business is too optimistic a date. Ad revenue from banner sales and the like will not be enough.

What is more likely is that there will always be free but there will also be paid. There has to be paid for the Internet to become a growth conduit.

To be free, advertisers will seek eyeballs and that business has been clearly established. Perhaps, as the USC survey seems to indicate, readers will continue to prefer free even if they have to put up with videos starting in the corner, ads creeping across the screen and other distractions. But don’t confuse these tactics for effective.

The idea of joining advertising with content may have run its course.

TV shows with commercials.

Radio formats with stop sets.

Maybe in the future it behooves Coke, Nike and maybe even Main Street local businesses to use YouTube videos, social networking and a lot of creativity and skip the non-paid content. They are doing it already. In effect, the ad becomes the content.

Paid content – the kind radio talent can produce – could be a strong attraction. Think about it – most listeners get ten (at most) different formats in the average radio market and some of them are really not all that different. What would it be worth to you to have exactly what you wanted to hear? There may be a price you would be willing to pay for something unique, compelling and addictive.

Unique, compelling and addictive.

My standard for paywalls.

Twitter and Facebook for free – they can channel those eyeballs into revenue and better them than us. It’s a tough business selling on the cheap.

But my very favorite magazine on my iPad – well, that’s worth something.

My favorite music media blogger on my digital device of choice – we’ll soon see.

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