Free Internet Content is History. Five monetizing models

Free content on the Internet is soon to become a thing of the past, analysts say, and if we watch the latest events taking place on the web we’re forced to agree. But with some caveats: we’re talking only about premium content.

The main problem with quality content is monetizing. Advertising is the main source of revenue for today’s online content, and while its share in the marketing budgets is on a continuing rise, the fact remains: online advertising cannot pay the bills for major content-oriented websites, especially those whose content comes from quality teams writing for printed media, with large editorial teams, respected analysts, columnists and reporters – all of which have to be paid and are not at all cheap. Compared with services websites, content sites are not only far less profitable, but are bringing down the respected newspapers and magazines that started them. Therefore, advertising is not enough to keep them as a solid business model.

Internet content was free from the beginning, but this will change soon. The main culprit and change factor is the advent of iPad and other tablet PCs. As people will start using mobile content more and more, charging for access to quality content from the beginning of this market is a strategy that might work. Here are some revenue models tried right now:

New Scientist – lets you read freely up to 5 articles per month, then requires paid registration. They force online registration with accepting a subscription to the printed magazine, at a generous discount. Thus, they shoot two things in the same time: monetizing their website and keeping their precious print run. Combining this with advertising and paid full access to their whole archive (that is still indexed by Google) gives a probably sound model for any quality-content magazine to follow.

The New Yorker will apply this model to a newspaper as well, with a single-time subscription giving access to users to the printed newspaper as well as to all other forms of it: online, iPad, Kindle and any other readers. No word of what its attitude will be regarding search engines – a major source of new readers online.

The Times (UK) – free access to the homepage, but then you see a pay wall that forces you to subscribe, with a 30-day trial for 1.5 Euro, then a monthly payment of 13 Euro. You can also get a paid 24h pass, and Google will have limited access to The Times’s articles – a rather bold move that will perhaps backfire in the long term. Of course, as in the paid newspaper, advertising still exists. This revenue model can be applied by all major newspapers that already have a strong readers base, but it still remains to be seen is direct revenue from subscriptions will be enough to compensate from the drop in online traffic. Also, it prevents getting new users that are not yet accustomed to the newspaper.

The New York Times will try a combination between the upper revenue models: still combining advertising with paid access if a reader reaches a limit of visits per month, but with a first-time free access from online search engines. The printed magazine will still be bought through a separate subscription.

Other content websites are charging only for interactive content especially designed for iPad, as is the case with Wired, which requires a $4.99 payment for its iPad version which is more dynamic and visually appealing than the printed or online version.

What will be the main and more efficient revenue model for premium content publishers will remain to be seen, but one thing is certain: mobile internet users will likely be more inclined to pay for quality content than desktop-based internet users. Until then, the role of interactive advertising can still make a bridge between creating and delivering premium content, and monetizing it accordingly. But on this, another time…