Now, I truly believe that there are many users who would be glad to pay for content. Consider just one group--the embedded systems developers. One of their own pleaded for this recently, calling for many more "interactive Webcasts" and "interactive online training" as essential for his profession to deliver.
This latter I thought interesting, since traditional stand-up training seems alive and well. But it is the very latency of that type of training--scheduling time, travel time, and instructional time--that predicates its downfall in many markets. Development times can seldom be extended to include two or more months of scheduling training, waiting for it to start, taking the class, etc. An on-demand, customized approach is essential.
With the ordered desisting of Napster and the closing of various free content sites (for example, winmag.com), traditional content distribution methods seem to have won the first round. Books, magazines, CDs, video tapes, and DVDs all continue to do well. Live broadcasts via commercial or pay-per-view also have a broad market. All have had counterparts online with few successes.
Don't make the mistake of thinking that the problem is the Internet medium. It is not. We've already overcome poor-quality audio content with MP3 and overcome poor video quality with Real's and Microsoft's latest codecs. The real problem is in the infrastructure currently in place. There are two key ingredients still missing from the Internet that will make selling digital content worthwhile: the first is always-on access; the second, carrier-class content management tools
It is sometimes difficult to remember that for the vast majority of Internet users--80% or more--the experience is an intermittent one. Dialup, log on, log off, hang up. This is because the Last Mile/First Mile (depending on how you want to look at your connection to your ISP) is over a telephone line. This causes users to see the Internet as an extra-effort event, not as an integrated part of their lives.
For anyone with DSL, cable modem, or broadband wireless access, the story differs considerably. Looking for and leveraging digital content is a near-continuous experience. As a DSL user, I often find myself looking phone numbers up online rather than walking the few feet up front to get the directory. This attitude change also makes me frustrated when I cannot obtain content that I want and need without paying with a credit card upfront for a $1 or $2 fee, or paying a large subscription price up-front.
Which brings us to point number two--the lack of carrier-class distribution tools. Despite a rather obvious need, content distribution over the Web has to date been primarily passive. If the user asks for it, the site will send it. But this is more like selling your digital content via catalog mail order. Yes, there are users who will do that, but most don't.
A major reason that traditional content distribution methods work and online methods have thus far largely failed is that the infrastructure to sell books, tapes, CDs, etc., is well understood and including in the pricing model. Shipping, handling, displays, point of sale, and all the rest of retail have had hundreds of years to hone and refine the most efficient, cost-effective process.
With online distribution, we've hardly even seen billing done correctly. It is quite surprising to me that up till now there has been no cost-effective way to micro-bill for content, a la the long distance services. I'd much rather pay at the end of the month my usage bill for content that way than to have to cough up my credit card for every fifty cent transaction. Online training makes us jump the same hurdle. Why can't we charge for only the content we use?
Television broadcasters understand exactly their audiences and how their stations reach those audiences. Yet online services have little if any information about viewership and how the content is used. This is sad, since of all the traditional forms of media--print, TV, radio--only the Internet could do real-time monitoring of activity.
Carrier-class service implies a 99.999% uptime with low- or no-latency for accessing the service. Today's systems provide too often 99.9% uptime, which means almost nine hours of unexpected downtime in a year. Customers expect more. Think dial tone. I can't even remember the last time I didn't get a dial tone on my phone.
Carrier-class implies scalability. Could we find a package that would go beyond the Victoria's Secret disaster and not just handle but anticipate the increasing demand?
Finally, carrier-class implies complete control of content--from source to user. The content developer needs to know that security of content is maintained end-to-end. That the content is staged correctly at caching points out at the edge of the 'net, as close to the Last Mile as possible.
The Internet can provide a solid revenue stream to digital content developers. It just needs two more pieces. Beyond that hurdle, content can-and will-pay.