The world is getting increasingly connected; increasing amounts of people are joining the web – forming a community. This overarching community (the web) is made up of smaller communities.
This is nothing new.
Members of communities communicate with each other, forming relationships. Relationships can then turn into transactions. This notion has underpinned every business model since ‘advertising’ and ‘customer service’ were invented as concepts.
Ever since that time, oh so long ago, businesses have spent money on people who were not their customers, and never would be. Billboard adverts are served to the public – the vast majority of which will never buy a product from that company. These people are essentially freeloading. Change the metaphor from billboards to online adverts on a free (professional) blog and the implications are clearer: Here you have a public enjoying a third party product (the blog) which is paid for by a company hoping they might sell their products to a minority of the blog’s readership. Anyone who doesn’t consume that product is freeloading off of company that placed the advert.
Again, this is nothing new.
When communities expand and move into the virtual space, that cannibalises ‘isolated consumption’. Communities are larger, more nuanced (diverse and specialised) and easier to communicate with: naturally, they begin to play a larger part in our consumption decisions.
Still, all this is old news.
Now, when you are selling to a community rather than an individual you need to be more polyvalent – because communities are heterogenous. Selling to a community means engaging all of it, as a whole, and eliciting a positive reaction from the community as a whole – because communities communicate, and everyone must be happy in order to sell to anyone.
Being polyvalent means offering something for everyone: not necessarily the same thing, but for each person in the community a company should offer something they want, at a price they are happy with. This applies all the way from the freeloader to the big spender. A polyvalent revenue model allows the company to engage more of the community without increasing losses (or at least increasing them much less).
With this in mind…
Why are we splitting up the business model into paying/ non-paying?
I don’t mean to pick on the NYT, i love their content, but how can they force us to choose between 10 articles a month, or a dollar a day? I want to be able to make my own NYT package – i want unlimited monthly access to just the economics section from now till August, but then pay as you go till September since i’ll be travelling and not reading so much, and i don’t know what i’ll want in Autumn, and i don’t want to have to decide now…
See this screenshot from their subscription page:
This is baby steps. It’s nowhere near what it could be in terms of modulability, and more importantly none of these options appeal to me – at the moment i clicked the subscribtion button i was a potential customer, looking to increase my engagement with the company. But none of these options give me what i want. Result: i found a way around the pay-wall, i remain a reluctant freeloader. Reluctant because i would like to pay for what i consider fantastic journalism; still a freeloader because i do not want to pay for more than i want to consume.
What this implies of course is that the internet has fundamentally shifted the balance of power from (digital content) companies towards consumers.
As digital consumers we pay when we want to pay, and ‘pirate’ when we do not. It is up to the company to convince the customer to pay. Either way the customer is consuming. The way to make digital consumers pay is firstly to offer them maximum flexibility and then to make it as easy as possible for them to do so. The second part is arguably up to the transaction service provider (like Paypal) and out of the scope of a digital content provider, but the lack of initiative on the first part – the flexibility – is what kills me.
How is it possible that the vast majority of revenue models remain so simplistic in the face of such an obvious and agreed-upon shift in consumer behaviour?
Each member of the community must be able to consume exactly what they want to consume, no more no less. And they must pay the smallest possible amount for it – and I’m looking at online press specifically here: the marginal cost of each additional sale is just too small.
If companies would just expand their revenue model, they might find it expands their revenue base too:
Give us choice and we will pay.