I shared in an earlier post the idea that many media companies feel they made a huge mistake by making their content available for free in the early days of the internet. They believe they commoditized their own product.

I contend that their decision acknowledged the near-zero marginal costs of distribution online, combined with the reality that people often pay for infomation based on what they think it costs to create and distribute (mistakenly emphasising the physical product), rather than the value they derive from it, which is nearly impossible to calculate.

In this way, information does want to be free. Still, I think there remains ample opportunity for media companies to differentiate and continue drawing on subscriptions as a source of revenue. 
For example, the NY Times is free online (for now), yet I pay good money to subscribe to the NY Times on my Kindle.

Why? Because I value the ability to receive high quality news in an accessible, convenient, and ad-free format. 

So there’s one, and one that companies are already exploiting – differentiate in how you deliver content to readers.

Number two, and the Nook and the WSJ can teach us much here, is making online subscriptions more attractive by allowing some sharing.

Information’s value is largely a function of the size of the network that has/can have access to it. It does me minimal good to pay for a subscription to Fortune if I the great ideas contained therein can’t be distributed among, and used to influence, friends and colleagues. 

Indeed, my access to a subscription-only publication actually increases the need for, and value of, good sharing capability.  I’m subscribing because I want to be a hub of info, not just because I want the info for myself.

This is the way it has always worked. People subscribed to WSJ in print largely to be “in the know.” But that never meant knowing for themselves alone, but rather in order to increase their value to others in their ability to be a great source of info. 

Maybe we need a new mantra. Not so much “information wants to be free” but “information wants to be social,” whether free or not.

Posted via email from Human Ventures

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