PONY UP

People are finally paying for online content—and music-streaming sites are leading the way

Conventional wisdom holds that the internet is the land of the free: free music, free news, free podcasts and apps. But we may finally be entering an age when internet users are willing to pony up for the entertainment and services they enjoy.

Subscriptions for online and investigative news outlets are up—particularly in the wake of the US election. The platform Patreon says that fans have given more than $100 million to support artists and creative types to date. And from March to September last year, Spotify’s subscription rate jumped from 30 million to 40 million paying users, out of roughly 100 million users total.

I’m a prime example of the cultural shift. For a total of about $60 a month, I’ve upgraded to the premium versions of Overcast FM, the app I use to listen to podcasts; Dropbox; Spotify; my VPN network; and the life-changing 1Password app, along with a few other podcasts, newsletters, and media sites. All of these have versions that are available for free. But like a lot of millennials, I’ve reached a stage of life where I can afford to part with a few bucks to support the things I love—and I’m increasingly willing to do that given how much of my life I spend on the internet.

But that’s not the only reason for the sea change. Benji Rogers is the founder of PledgeMusic, a site that allows musicians to raise funding for their projects directly from fans, and the new Dot BlockChain Music project. He says the problem all along has not been that people are unwilling to pay for internet services, but the way we’ve been asked to pay for it.

“The music industry and the content industry and to some extent the app industry are all really bad at selling stuff because they don’t understand that you can deal directly with what humans want,” Rogers says. “Right now, most places right now are offering subscribe-monthly-for-all-our-content model or they’re using ads, which just entice people to install ad-blockers.”

Rogers says these models don’t work because the “serving size” isn’t right. If we just want to read and support a few articles a month, or a particular writer within a publication, we’re often unwilling to fork over the full subscription price. And people are increasingly unwilling to endure ads in exchange for free content: 26% of mobile users had ad-blocking browsers in 2016, according to an Adweek report using data from eMarketer. Now, Rogers says, there are “a few people working on a third way who stand out.”

What’s the third way? Un-bundling services and allowing customers to pay only for what they want, with ad-free access. This might look like the ability to “tip” for a particular article or writer you like on a mainstream news outlet, without paying for the whole site’s content. Medium, which launched in 2012 with the goal of creating “a new model for media on the internet,” recently signaled their move towards this model. In January, founder Ev Williams wrote a post announcing layoffs despite 2016 being “best year yet” in terms of key metrics. “The broken system is ad-driven media on the internet. It simply doesn’t serve people,” Williams wrote, “So, we are shifting our resources and attention to defining a new model for writers and creators to be rewarded, based on the value they’re creating for people.”

Another option, according to Rogers, could be for more sites to follow the lead of Spotify, Pandora, and Hulu and offer ad-free versions for subscribers willing to pay a little bit extra. “I pay six dollars a month to block ads,” Rogers says, “Which means like many people, I will pay to remove them. Why can’t I pay the individual site to do that for me?”

For example, I pay $3 month to support Longform.org, a website and podcast that curates high quality creative non-fiction in one place (with minimal ads) where I can save to read them later in one click. There is no paywall on Longform; I could visit the site and read all the articles for free. But I value it greatly and would be sad to see the website go. When I received an email asking me to kick in a couple bucks, I gladly agreed.

The question, of course, is whether a few bucks here or there is really enough to support a business. I asked Max Linsky, the co-creator of Longform, how their monthly support model fits into their big picture. While he couldn’t go into specifics of the company’s business model, he said that “supporters make up a relatively small piece of our overall funding. It’s meaningful and hugely appreciated, but it certainly doesn’t and couldn’t support what we do outright.”

However, Rogers sees potential for the third model to work in the big picture—particularly if content creators and app developers are willing to make direct appeals to their users, and if the mechanisms we use to tip for the stuff we consume online scale up.

Even established players seem to be exploring this new approach. The New York Times has had a fair amount of success with its paywall subscription model—digital subscriptions peaked to 1.85 million at the end of last year, with more than a quarter million bump coming thanks to Donald Trump, and counting. But in a recent feature on the future of the New York Times in Wired, Gabriel Snyder detailed the media company’s current strategy: “invest heavily in a core offering (which, for the Times, is journalism) while continuously adding new online services and features (from personalized fitness advice and interactive newsbots to virtual reality films) so that a subscription becomes indispensable to the lives of its existing subscribers and more attractive to future ones.”

That plan sounds similar to what Rogers proposes: Make niche services and features that delight specific audiences, give them a reasonable way to pay for it, and they’ll do it. You just need to find the right way to ask.

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