via TechCrunch:
I’m frustrated that the web’s promise of instant and free access to the world’s information appears to be dying. I’m frustrated that subscription usually means just putting formerly free content behind a paywall. I’m frustrated that the price for subscriptions seems wildly high compared to the ad dollars that the fees substitute for. And I’m frustrated that subscription pricing rarely seems to account for other subscriptions I have, even when content libraries are similar.
This piece is a mess, though I agree with a few of Danny’s points. While he does mention it, I think he loses sight of the fact that these services cost money to operate. This cannot be emphasized enough. There are only two ways to make money in content: ads and/or subscriptions. If you feel that ads are too gross, then you are left with the subscription model. Content costs money. In some cases, very serious money. Netflix could never (at least not in a timeframe that would satisfy investors) recoup their content costs using ads alone.
How do you run world-class newsrooms which are doing real investigative journalism, paid for by advertising alone? Prior to the rise of the web, publishers were able to use revenue from classified ads to fund those operations — subscriptions and commercial advertising were secondary revenue streams in many cases. Classified ads were small and highly profitable. Craigslist took that revenue away from the publishers, leaving them high and dry.
The rise of dedicated streaming services for video are forcing traditional broadcasters to launch their own streaming services compete for viewer eyeballs. Having solid back catalogs of content gives each of them a compelling reason to exist.
The biggest mistake made by publishers on the early web was giving their content away for free, setting the expectation that this would always be the case. Now that they desperately need that subscription revenue, consumers are starting to feel pinched.
This is all a matter of perception though. Subscriptions aren’t new, and people had plenty of them prior to the web. My parents had two daily newspaper subscriptions, 5-6 monthly magazines, and satellite TV service. In our home today, I pay for three news subscriptions, one music, and seven video services. I value the content and I am willing to pay for it, just like my parents did in the 1980s and 90s. If a service is not providing me enough value out of the $5-12 per month, then I will cancel it (and it’s a lot easier to cancel a streaming service than it is to cancel Comcast…)
This is the future, and it’s really not that different from our past.