Leveraging the web: how people are willing to pay for content
Will people pay for online content?
Here is a recent example, and a recent thought experiment, that gives us food for thought in the often fraught discussion of how people can leverage the benefits of the web (global access and ease of distribution at reduced cost) to generate income from creative content.
The example comes from the comedian Louis CK
If I put out a brand new standup special at a drastically low price ($5) and make it as easy as possible to buy, download and enjoy, free of any restrictions, will everyone just go and steal it? Will they pay for it? And how much money can be made by an individual in this manner?
Louis CK has provided an admirably transparent account of his thinking and production process, revealing the costs, revenue and profit. His experiment has been analysed in detail by Mike Masnick of Techdirect in two interesting posts (here
). In short, he broke even after just 12 hours, and is now in profit to the tune of $200,000 or more.
On the purchase, page Louis CK put a message directed at prospective purchasers:
I made this video extremely easy to use against well-informed advice. I was told that it would be easier to torrent the way I made it, but I chose to do it this way anyway, because I want it to be easy for people to watch and enjoy this video in any way they want without “corporate” restrictions.
So Louis CK’s experiment made it easy for ‘pirates’ to take his content for free, avoiding all payment. Perhaps some did, but more than 100,000 people paid. That’s a pretty decent demonstration of willingness.
Which brings me to the thought experiment. Piracy is regularly cited as a reason for declining revenue to creators, and some of the figures bandied around
– in the tens of billions of dollars – are breathtaking. At TorrentFreak they speculated
“what might happen if all US BitTorrent users made the switch to Netflix.”? In other words, if all US file sharers, who were paying producers nothing, suddenly stopped passing around films for free and became paid customers of the online video service Netflix, how much money would be raised?
The answer: $60 million. Not to be sneezed at for sure. But that’s small change when Hollywood takes in $10 billion in ticket revenue annually
and a major star can personally command $20 million to appear in a major film. It’s some three hundred times less
than the loss from piracy claimed by the industry’s lobby, the Motion Picture Association of America. And its equivalent to the MPPA’s annual budget.
Let’s be clear about one thing – making these points is NOT a defence of piracy. But we need to critically assess claims about the impact of piracy, not to mention factor in those findings that suggest ‘pirates’ actually spend far more on legally acquired content than the average consumer
Is there a lesson from this for domains like photography and journalism? I think so. While people continue to tell pollsters they won’t pay for daily, general news online, clearly there are increasing examples of people being willing to pay online for quality content with lasting value, even if they can get a copy for free.
Leveraging the web to make such content available for purchase requires creative producers to shift their starting position. Too often I’ve heard people blame the plight of creative industries on the alleged moral failings of potential consumers or fans. It’s time to move beyond the claim that most people using the web are feckless thieves just waiting to steal content. If you make quality content available in affordable, easily accessed formats, and you make it easy for people to find you and pay for that content, then you can leverage the web to find those who will part with their hard-earned cash for your work. That responsibility lies with the producers not the consumers.
Photo: Community Friend/Flickr