Rupert Murdoch made a huge stir in the news industry with last month’s trial balloon that suggested he would pull all of News Corp’s content out of The Google. Some people thought he was crazy; others thought he was savvy; either way Google has already responded with their First Click Free program, which gives publishers additional tools to manage how much premium/paid content is made available to users via the Google search engine.
This is just one example of a battle being fought in the “paid content” space. It's a confusing environment: the trends, when juxtaposed, seem to contradict each other.
First is the famous “death of the newspaper,” which (if one wanted to be petty and simplistic) one could attribute to Craigslist’s dominance in the classified ad space. But a bigger problem is that publishers haven’t been able to figure out a foolproof way to get users to pay for their content. Is WSJ.com the only good example of a news publisher being able to charge subscription fees for any length of time? I think it may be. And yet people still argue vociferously that they would be better off by *not* charging. Who’s right?
Next, I want to talk about APIs, or Application Programming Interfaces. These are behind-the-scenes plumbing that allows Company A to consume data from, or interact with services provided by, Company B. Examples of well-known API providers on the web are Amazon, eBay, and Netflix. Often the underlying service is not free, but quite often – especially in the Web 2.0 space – the data is free. The guiding principle for some years now has been “mashup” – make your data free, easy to play with, and let motivated users and partners combine your data with other interesting data sources to provide unique and valuable services. Fred Wilson had an interesting take on this phenomenon and used Twitter as an example.
In terms of paid data, the financial services industry has successfully charged for investment data for years. Giants such as Bloomberg, Thomson Reuters, and Dow Jones all (presumably) make a killing on their data services.
I met recently with Eugene Osovetsky of WebServius to talk APIs. WebServius provides an API management platform that allows you to control access to your content in a variety of ways, including usage caps, tiered pricing, and secret/shared access keys. WebServius is making a bet that the future of data has dollar signs attached to it, and makes it drop-dead simple for you, the data provider, to control, monitor, and charge for your valuable data sets.
But does the future of data sit behind paid firewalls? On the one hand, you have Stewart Brand’s famous maxim that information wants to be free; on the other hand, you have just in the last decade two internet bubbles, which one could reasonably blame on the lack of workable revenue models.
Will the market force companies to start charging for content and data?
My take: I think that, Lord Rupert's recent statements notwithstanding, the move to a mostly-paid content and data ecosphere will be slow and gradual. For each two steps forward, the industry will take one step back. It will be necessary for associated systems – intellectual property, micropayments, search, discovery, and distribution – to evolve in step with the “paid content” movement. But ten years from now, we won’t be shocked and surprised when providers of original content and data, including user-generated content, can successfully charge you pennies per use, completely transparently and friction-free.
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