Innovation & Design

Making Online Pay


There's interesting news from Europe about online content and underlying business models along the free-to-paying continuum. Here are three of them

Daniel Schneidermann is launching an online TV show that will be the first in the world to be supported by its subscribers—rather than by advertising only.

Schneidermann is probably a nobody to most people outside of France, but in his own country he is a famous cultural critic who used to host a well-regarded media analysis TV show, Arrêt Sur Images, which translates as Freeze-Frame. This role as the watchdog's watchdog has gained him a broad following, as well as many enemies in newsrooms. Last June, under the pretext of implementing an overhaul to its program roster, France5 (a public channel) dropped the show. Within a month, 185,000 fans signed a protest petition.

More than 15,000 of those people (so far) have also put their money where their pens were and promised to pay €30 ($42) per year to subscribe to his new online show, @rretsurimages, which will start on Jan. 7, 2008. The subscription campaign continues for what will likely be a weekly show complemented by daily news, blogs, and a free general news section.

Schneidermann is not an easy character; he borders on cantankerous, but that comes with the job. And he does his job well, which is, of course, the core of his appeal: high-quality unique content. On the site arretsurimages.net, which currently is still little more than a blog, he recently has been dissecting the contortions of the French press trying not to pay too much attention to a letter photographed from a distance in the hands of President Nicolas Sarkozy. The letter looked like a love note, but that's not Schneidermann's subject. His focus is on how the media treated that picture—including why one paper published it only after having photoshopped out the text from the paper held by Sarkozy.

Free for a While

The London Financial Times is not ready to let go of the idea of making people pay for its online news and analysis. But it seems to have learned a lesson from the recent decision by The New York Times to terminate its TimesSelect premium content section.

The British business newspaper is trying to find a way to get subscriber money, and at the same time be sure that its content maintains the broadest possible impact. Starting in mid-October, the FT will introduce an innovative charging scheme: Articles and data will be free to users up to a total of 30 views a month. They will then be asked to subscribe for access to more material. If that doesn't sound particularly avant-garde, consider the motivation: The change would allow bloggers and news aggregators to link to material previously available only to subscribers.

Despite the $10 million or so that TimesSelect was bringing in, The New York Times had discovered a couple of major hidden costs of putting its best columnists behind a paying wall. Doing so reduced their chances of being found by search engines and online news aggregators (Netheads call that GoogleJuice) and kept them out of important portions of the public conversations, thus reducing their influence—and the influence of the newspaper. The FT is trying not to repeat the mistake.

Steal This CD

The music event of this season will be the release of rock band Radiohead's new album, In Rainbows. That's partly because of the music, from one of the world's most innovative bands, but also because of the way they're releasing it: They are giving it away.

In Rainbows will be available only via the band's Web site (inrainbows.com). Consumers place the digital files in their "shopping basket," and when they get to the payment page, there is a question mark listed as the price, and they're told, "it's up to you"—you name your own price, and it's totally acceptable for that price to be zero. (You can already pre-order. Downloads will be activated on Oct. 10.)

On the site you can also buy the physical version of In Rainbows: a box containing the new album on CD; the new album on two long-playing vinyl records; a second CD with more new songs, photographs, and artwork; an artwork booklet; and a booklet of lyrics. Plus, the download is thrown in as a freebie. The artwork is by Stanley Donwood, Radiohead's longtime collaborator. The boxes are priced at £40 ($85), including postage, and they will be shipped around Dec. 3.

Experimental Business Model

Radiohead is going off-label, letting people download their music for as much or as little as they want (without copyright protection) and then offering, for a high price, a sophisticated and unexpected (the vinyl) multi-item package that borders on being a collector's item. The off-label part is not a real surprise, since their contract with EMI expired after their last record in 2003. Many thought that their next album might be released through iTunes or other established online music stores. That they would skip even that step and go solo, directly to fans, that's the surprise.

The business model here is a matter of pure experimentation, but it challenges most aspects of the current music industry model. By giving away digital music, the group is turning it into a loss leader and hoping that it will boost the sales of the boxed set and of concert tickets (the concert business, by the way, is booming).

Cutting Out the Middleman

Radiohead seems to be adhering to a statement given to Time magazine by lead singer Thom Yorke a few years back: "I like the people at our record company, but the time is at hand when you have to ask why anyone needs one."

Their approach is likely to work well for stars with name recognition and huge fan bases. A few months ago, the singer Prince gave away his last album as an insert in a tabloid newspaper in Britain. The music industry and store owners protested, but the move certainly helped him sell out all of his 21 London concert dates.

But it may take longer for the music industry to work out the ramifications of these innovative approaches to music distribution—as a whole—and for younger, upcoming artists. For now, go online, name your price, and enjoy the music.


Hollywood Goes YouTube
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