Pay What?!

Net users aren't giving up their cash without a fight. How do you persuade them?
Magazine Contributor
2 min read

This story appears in the December 2002 issue of Entrepreneur. Subscribe »

It seems most Internet users are strongly resisting the inevitable move from free to paid content. A recent study by research firm Jupiter Media Metrix found that 70 percent of adults online "cannot understand why anyone would pay for content online." Of course, nothing is quite that simple. That leaves a healthy 30 percent of the large Web populace willing to open their wallets for the right incentives. Since you can't hang your Net hat on advertising revenue anymore, paid content is a reasonable avenue for some online entrepreneurs to explore.

Popular technology news portal and community is taking a successful dangling-carrot approach by offering ad-free subscriptions to the site at the rate of $5 per 1,000 ad-free pages. This low-cost program rewards dedicated users with an improved surfing experience while bringing in needed revenue. News site falls under a more familiar subscription-based pay-for-content model. "Garnish" articles are free, but the meat of the site is only available by subscription. Salon Premium also lures customers with extras like ad-free viewing and e-books. The site reached mid-2002 with nearly 40,000 paying readers.

What might work for your growing business Web site depends on the level of content you provide and the value proposition you're able to offer customers. Premium services and multimedia also draw in users. Experiment with ad-free offers, bonuses and flexible pricing options until you hit the sweet spot of what customers are willing to pay for.

A study by the Online Publishers Association and ComScore Networks shows U.S. consumers paid $300 million for online content in quarter one of 2002, up 155 percent from 2001. However, a small number of sites like Yahoo! and account for most of that. Getting in on this trend requires savvy and sensitivity to customer wants.

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