People Pay For Access, Not Content... But Most People Don't Understand The Difference

from the partly-right dept

A bunch of folks have been sending over this short video by Forrester Analyst James McQuivey about the idea that people pay for access to content, not for content itself, and that this has always been the case: As he notes, in the past, content and access were often bundled together, so people confused the two. But, today, they've become somewhat separated, which is why many of the content industries are struggling. McQuivey's suggestion to people is to build business models that focus on charging for access and that's how you "get people to pay for content."

He's absolutely right that people have paid for access (a scarce good) and that getting people to pay for access is a business model that works (though, hardly the only content-based business model). However, the problem is that I think he underplays the difference between access and content, such that many people will hear his talk and assume that "paying for access" really means "putting up an artificial paywall that forces people to pay." The mistake there is in not realizing where the real separation is between access and content.

People pay for their broadband connections. That's access. People pay for their mobile phone data plans. That's access. Those are scarcities. Putting up a paywall or a micropayment system is not paying for access. It's trying to set an arbitrary limit on content. Unfortunately, McQuivey's "example" of paying for access is a bit misleading. He talks about Netflix's streaming offering. But he ignores that most of those subscribers were originally paying for DVDs, and the streaming is a throw-in. Where the real "access" that Netflix has tapped into lies in its ability to easily and conveniently get movies onto your TV. That's what people are paying for. It used to be DVDs (and still is for many Netflix customers), and more recently it includes integrated streaming. But that could come under pressure from other forms of easy and convenient access to the same content, so Netflix will need to continue upping its game.

So while I agree with McQuivey, and have said similar things in the past, I think he underplays how difficult it is to be in a position where you really can charge for "access." There really aren't that many players who can do so legitimately. I worry that many people will view this video and jump to the wrong conclusion, and try to artificially block access in order to get people to pay.

Filed Under: access, business models, content