What will people pay for?

I've been thinking about the future of specialized publishing. Actually, publishing in general. I think the demand for information, content, of all types, is greater than it's ever been. That should clearly be great news. But the picture is rather more clouded than that.

With all of this content available, what are people willing to pay for? I don't know, but I'm encouraged by several examples of successful paid content.

Apple's iStore is the first example that comes to mind. While Napster, Grok, and LimeWire enabled free sharing of music, Apple made it cheap and easy to buy music legally. And they do, to the tune of $1 Billion. It's too early to know for sure but the Kindle (and possibly other e-readers) are making it possible for people to pay to subscribe to a newspaper that they can access largely or entirely for free online. So, if it's cheap and easy, people are willing to pay for content.

Mobile phone providers are following this model as well, offering TV and radio through the phone. As I write this, mobile carriers have chosen to make these premium services fairly expensive, given that TV on my phone is likely a secondary TV access. If they took the Apple or Amazon Kindle approach, they'd provide a "basic cable" type service that is low priced -- maybe $.99 per month. Imagine how many people would pay for it at that price. And, they'd sell more high end phones.

But, these examples are more about the pipeline, the distribution channel, then they are about the content. And, by the way, the content is mostly entertainment, not business information. What are the implications for SIPA members?

Let me go back to the point I made earlier -- the demand for information is greater than it has ever been. It's a simple calculation based on the size of the population and the accessibility of information technologies. At the same time, how much more information can you process? I'm pretty maxed out. There are times when I avoid looking at my cell phone because I can't deal with another email. And, I subscribe to fewer things now than I did 5 or 10 years ago.

So, how are we going to make money in this business? People will still buy information if it's packaged in the right way and priced reasonably. And, in this Google-ized world, the packaging may well be unbundled. I don't want to join or subscribe. I want to pay by the drink as I find and consume the information I want, at the moment I find it.

So, a REALLY easy method of payment is going to be important to facilitate purchases in the moment. Apple and Amazon have done that by having you signed into your account most of the time so you only have to open your wallet once to put in your credit card info. But, they can make a proprietary system work because they have such an enormous and broad product offering.

SIPA members, and most publishers, can't get critical mass so we're going to depend on micropayment technologies. PayPal is close but I don't think we're there yet. These will require a universal sign-in, like OpenID, in the same way that purchasing on credit was facilitated by the advent of credit cards which substantially replaced the use of proprietary store charge cards. I think we need to see these arriving in the market in the next 18-24 months.

Once that's in place, SIPA members are going to have to find a way to deliver the information value in as convenient formatting as possible, through an almost frictionless ecommerce transaction. All while maintaining brutal efficiency to be able to keep prices as low as possible.

Of course, we may find that it's less expensive to give away the information and find a way to sell premium upsell products. The music industry analogy is highly appropriate here. Yes, most artists still make money selling CDs or MP3s, but they know a lot of that market is being siphoned off through illegal, and virtually uncontrollable, copying. But, you can't copy a seat at a concert. So, they're selling record numbers of concert tickets.

They also sell all sorts of merchandise, online at the concerts. And, they're selling concert DVDs, which are still somewhat harder to illegally copy and distribute than music files. And, they're finding they can make a lot of money with private performances for corporations or wealthy individuals. They're selling ringtones, which are also still somewhat harder to illegally copy for many cell phones.

Basically, they're giving away their traditional bread-and-butter and selling premium services. Any lessons for us SIPA members? What do you think?