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Users Will Pay For Content–And Not Just iTunes

February 26th, 2009 · 12 Comments · Uncategorized

Saul Hansell writes in his post “Why Are iPhone Users Willing to Pay for Content?“:

What’s most interesting is how iPhone users are willing to spend money in ways that Web users are not.

I’ve criticized Apple from time to time for not having a coherent approach to delivering free content with advertising. But in some ways, the development of a market for paid content is a bigger and less expected achievement.

I’ve had my sanity questioned for believing that there’s life beyond ad-supported content. In fairness, Apple has learned that it’s got to sell content cheaply, whether it’s $0.99 for a song or $4.99 for an ebook. But cheap is a lot better than free, and it gives authors / content providers a model that is not beholden to advertisers.

So, the next time someone mocks my opposition to the ad-supported model, my battle cry will be “What Would Apple Do?”,

12 responses so far ↓

  • 1 Heekyung Kim // Feb 26, 2009 at 1:59 pm

    Also, Apple makes it really easy for users to pay for content. I think it’s the riddance of friction in accessing that content that makes people willing to pay for content.

  • 2 Daniel Tunkelang // Feb 26, 2009 at 2:01 pm

    So perhaps the solution for all media providers is to make iPhone apps? I’m actually not kidding–this seems like a perfectly defensible conclusion from the evidence. Of course, they need to have content that people would even imagine paying for. Like iFart.

  • 3 Hal Danziger // Feb 26, 2009 at 3:00 pm

    Daniel, I have to admit…you’re right.

    http://www.pbs.org/mediashift/2009/02/read-for-free-pay-for-print-or-stuff056.html, however, is wrong.

    I think the big question is what form these content providers take moving forward, which was the core of my post here: http://bit.ly/NOFG2.

    Most people responded to my timing on the significant drop of print, but I think the predictions that follow are in line with what you’re getting at in this post, and that you’ve been preaching for quite some time now.

    http://bit.ly/NOFG2

  • 4 Steven Hodson // Feb 26, 2009 at 8:23 pm

    hmm .. you might want to read this bit from Techdirt then :)

    http://techdirt.com/articles/20090224/0032093877.shtml

  • 5 Daniel Tunkelang // Feb 26, 2009 at 8:26 pm

    Touché. And I concede that one-time fees for apps aren’t quite the same as subscription fees for periodic content. I suppose we wait a year and see what the market tells us about the sustainability of paid content models.

  • 6 Josh Young // Feb 26, 2009 at 8:28 pm

    This is all that Hansell claims:

    (a) book about iphone is best-selling tech book
    (b) book about iphone more popular on iphone than on paper or as a pdf

    The version on the iphone very well could have sold only just over a third of all copies on the iphone.

    I would never question your sanity for suspecting like there’s value around content to be monetized beyond advertising. In fact, I’d question the person who says otherwise.

    Hansell’s argument that people will pay for content because they like how-to references about a thing embedded in the thing for which the thing’s maker has set up an especially frictionless market is pretty thin soup, however.

  • 7 Daniel Tunkelang // Feb 26, 2009 at 8:41 pm

    Point taken. And I realize that the most popular iPhone apps are games, which I suppose people are still used to paying for–though I believe a number of them have free, ad-supported web versions. And I see in the app store that at least some people are paying for books–and even news.

  • 8 Otis Gospodnetic // Feb 26, 2009 at 8:51 pm

    Recipe:
    – make it easy (few clicks, don’t make me enter my info over and over)
    – make it inexpensive (no guilt)
    – satisfy my need immediately (no shipping, let me view/listen right after purchase)

    Back to cooking my chicken broth…

  • 9 Dave Johnston // Mar 23, 2009 at 11:31 pm

    There’s an outlier involved here…

    In my estimation Apple users have an amazing willingness to pay for even crap, as long as they can buy it from Apple.

    This has been true for a long time, with its nexus sometime during the late-early Jobs days post-Macintosh. It has only expanded in the past five years with the growth of Apple during the iPod/iPhone era and the advent of Apple retail stores.

    It’s a cultural thing, and persists even when the product quality fails to match expectations (see: white MacBook, early iPhones).

    I’m not sure how long they can hold this position, especially post-Jobs.

    Diagnosing the psychological underpinnings of this issue is way beyond the scope of the comment section of this post, even assuming I could start 1/600th the way down that road if I wanted to.

    Trying to apply what Apple has learned with $0.99 iPhone apps to other forms of content is, well, rather difficult in the face of this.

    *I’m a user of Apple products.

  • 10 Daniel Tunkelang // Mar 23, 2009 at 11:46 pm

    A fair point, although part of Apple’s success may be that they’ve promoted a closed world where paying is easier than not paying. It would take some work for a non-Apple to build such a world. But I don’t think Apple users themselves are the outliers–at this point, there are simply too many of them* to think of them as a subculture.

    *Unless my having a 5G iPod makes me an Apple user.

  • 11 Dave Johnston // Mar 27, 2009 at 2:54 pm

    I agree, for the most part. Apple’s has definitely grown well beyond the hobbyist era. They are a definite retail force at this point, and I admire much about their business (mainly, the aesthetic, technology as jewelry). What I’ll be interested to see is whether they can keep the mainstream (very fickle) buyers around once it’s less hip to own an iPod or iPhone.

    *Welcome to the club, Daniel. I’ll be sure to send you all the info on our secret meeting place and handshake.

  • 12 Daniel Tunkelang // Mar 27, 2009 at 3:02 pm

    A bit of a tangent, but I do like Microsoft’s latest recession-appropriate ad campaign. Perhaps Apple will shoot back with a “you get what you pay for”. Or a MacBook Wheel.

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