A month or so ago, following my review of the new Price Is Right application for the iPhone, the always conversational, if not controversial, Allen Stern of CenterNetworks asked "why people are so quickly willing to drop massive dollars on iphone apps" but will do whatever they can to avoid paying for content, including the use of ad blockers. As with offline purchases, everyone's rationale for purchasing can vary, but here's some of the thinking behind my own behavior:
Worth Buying: Something Tangible You Can Keep
The "Commerce" folder in my e-mail box is flooded with iTunes Store purchase receipts going back years, thanks to the Apple offering me thousands of songs I can purchase, films, television shows, and now applications for the iPhone. With hard drive capacities ever increasing, I have very little need to ever throw away a song, so purchasing it for keeps makes sense.
I also purchase software applications for my computer online, which when downloaded, are essentially there forever. Also, as downloadable software applications are typically the same content as retail boxes of software, I know they have equivalent value.
Not Worth Buying: Something You Don't Keep
Even if it would likely save me money over the long run, I won't pay for a subscription model of music. If I ever chose to stop paying, I would have no assets. So that doesn't make sense.
Not Worth Buying: Something Useless Tomorrow
Practically everything has a shelf life. Information and news ages faster than just about anything else out there. News that was breaking this morning is old news this evening and ancient by tomorrow. That's why I am no longer paying for Newsweek's print edition, or Sports Illustrated, Macworld, or even the Wall Street Journal online edition, as their content had already been discovered somewhere else closer to real time.
Worth Buying: Unique Insight and Direct Access
Thought it's unusual, some subscription models work, if online consumers believe they are getting more of the story, or get additional tips that free users are not getting. ESPN.com's Insider feature, though maligned by many, has been a must-renew each year, because much of their quality content is behind the paywall. Similarly, at times I have been a Wall Street Journal online subscriber, and previously a subscriber to TheStreet.com. The last two are particularly important because they deal with finance and many believe that the money they will make back off their content will more than outweigh the initial spend.
Not Worth Buying: Duplicate, Non-Unique Items
The "for pay" content successes are few and far between. Much of that is because it is getting easier and easier to publish content quickly these days, and if one source doesn't cover a story, another one will. In television, all the news networks and cable channels cover the big stories. In the blogosphere, most of the brand names echo each others' content, driving down the average quality, and practically making every single one of them replaceable. With very little unique content and access, none derive enough value for users to pay, except maybe out of pity.
Worth Buying: Time Wasters and Entertainment
It's a lot more fun to play cards or video games than it is to pay bills. And while office productivity applications might be among the most useful applications you have, the number of games you have on your PC or your mobile phone may outnumber these tools by a factor of 3-1 or more. For every Microsoft Office I have, I also have a handful of card games, board games or arcade games at the ready, each of which is probably in the $5 to $20 range to buy.
Not Worth Buying: Access to Social Communities
The very nature of social communities is that they rely on the people themselves to deliver the value, and on the Web, those communities are extremely mobile. As much fun as you may be having on Facebook, Twitter, LinkedIn, FriendFeed or other networks, you know you were probably spending the same amount of social capital somewhere else a few years ago, and you'll likely be spending it somewhere else in a few years. Given the entire community can move, you don't want to find out the last thing people will remember you by is your credit card number.
Worth Buying: Items With Offline World Equivalents
Lest I be seen as overlooking the entire world of e-commerce, yes, buying real-world goods and services online has value, so long as it correlates nicely with offline costs and deliverables. Online purchases of tickets, apparel, food, and services make sense. I'll pay for Quicken Online. I'll pay for Netflix videos. I'll pay for MLB.com broadcasts, and I'll buy physical items on eBay, Amazon and other merchants.
Not Worth Buying: Content
Content itself is not king as once was thought. With the advent of wire services and RSS, content created in one place can move to another in rapid speed. Syndicated content can build up a shell of a site and make it a destination. Bloggers can niche themselves and create original content, or they can be repeaters and post many times a day, putting quality in the wind. Building a Web site is very cheap right now, and creating content is very cheap as well. While consumers are suffering with a reduction in the availability of great content by those who practice their craft well, the amount of content available is overwhelming, and if one publication disappears, another can rise up almost instantly to take its place. Even the biggest brands we know today in content can be replaced.
For many content producers who have made this their craft, the realization can be very frustrating, as they know their efforts have value, but as consumers, we don't always recognize it. I may be perfectly okay in shelling out $8 to play the Price Is Right on my iPhone, or I'll pay $10 to download an album from iTunes, but ask for $1 an RSS feed, and I'll say no. Cognitively, that is broken. But that is where we are.
Any other thoughts? There's no way my list is complete. And Allen, I expect to hear from you on what I'm missing.
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