Should You Make Them Pay?

Free, fee, or something in between? This is the question that every content provider is asking, particularly, of course, news organizations. A study by Harvard Business School and USC’s Marshall School of Business took a look at twenty companies and their payment models, and how they fare.  They looked at four categories of payment: purely fee-based (think iTunes); purely ad-sponsored (i.e. Facebook); mixed models (WSJ) and tiered content (Linked In is an example).  What they found is that when a company uses a mixed model, as many newspapers are thinking of doing, they are in danger of losing their relevance as soon as a free version of the same content shows up.  In the case of WSJ, Murdoch is betting that their brand is so unique that its content is worth money.  And as long as they make sure that all of their content is worth money, they will be fine, if the study bears out. Because it’s not the oney part but the mixing part that puts these brands at risk.



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