What do you pay for?

by Jason Preston on February 20, 2009

I was talking with both Robert Scoble and Chris Pirillo last night (yes I just name-dropped the crap out of this post) about paying for things online. There’s been a lot of discussion recently about the best way to go about monetizing online content, and most of it leaves one very important question alone: why would users pay?

I know a lot of journalists who love the idea of “micropayments,” because a) it saves their industry and b) it teaches these stupid freeloading readers a psychological lesson.

Nevermind the fact that said psychological lesson is one huge reason that micropayments will never work, it also conveniently skips over there part where the user has a choice about whether or not to pay for news.

And they do. Even if every single news organization in the world switched over to a paid model, users (formerly readers) could just stick their middle finger up and not buy it. Any of it.

So what do people pay for online? Scoble says “scarcity.” Pirillo says “not news.”

I think Pirillo is wrong, and Scoble is only half-right. People do pay for things online, and in many cases they are things that aren’t necessarily “scarce.”

People pay for products because of the way it makes them feel. Ever heard of shopping therapy? It feels good to buy stuff, especially things you like, from places you like.

The features are only a justification for the purchase.

Understanding what makes people feel good about news and community is going to be the key to making the news business work. Because that’s what you’re selling – an emotion.

I’m a FlickR Pro user, mostly because it makes me feel more like a serious photographer, despite the fact that I only take pictures once or twice a month, and it takes me another month to “develop” them from RAW format to JPG.

Justification? I can use “sets” and I get unlimited uploads!

Similarly, I think people will pay for a news site that hits the right tone for them.


1 Curt M. 02.21.09 at 10:57 pm

I think we’re going to see a variety of ways to pay for journalism online. Case in point: NPR’s “On the Media” had a story this week about Kachingle, a new service that lets users pay for content they like. Give $5 to Kachingle, then click on the Kachingle icon on content you think worthy. At the end of the month, your $5 is spread out proportionally to the sites you liked.

The On the Media transcript won’t be up until Monday. Here’s the tease:

“Kachingle, an online service that will launch next month, offers yet another possible solution: encourage online readers to voluntarily contribute to newspapers and other websites they like. Kachingle CEO and founder Cynthia Typaldos explains why she thinks people will pay for content they can get for free.”

2 Curt M. 02.21.09 at 10:58 pm

And here’s the Kachingle link.

3 Pramit Singh 02.22.09 at 12:17 pm

Interesting article. I would like to add that while all of us journalists and bloggers are discusiing news business and its future for a while now, there are only a few people doing anything about it. But I guess I am digressing here.

On a related note, we have been working on a comprehensive guide for online journalists at Bighow. As a part, we have put up a list of 14 news business models.

Hope that is useful for your readers.

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