Pay for Content Is Not Suicide, It's Experimentation

(MoneyWatch)  In the last couple of weeks, a number of media companies have all declared their readiness to make people pay for what they get. The wagging fingers predicting dire consequences don't seem to get the business issues in play, because they treat every decision as though it had life-or-death finality. But it doesn't, because this is business as it should be: experimental and practical.

The examples of "pay us now" are significant:

• Newsday has announced that it will begin charging $5 a week for access to its web site, though not for people subscribing to either the print version or to Cablevision.
• The rumor is that Hulu.com may start charging for access, with effective acknowledgment from News Corp. deputy chairman Chase Carey, though nothing about what that would entail.
• Carriers including AT&T and Time Warner Cable are telegraphing that they're considering moving back to a usage-based pricing model.

According to Jason Calacanis, apparently even some angel investors are insisting that start-ups pay to pitch their businesses. Given the bad press that seems to be building, there's an experiment in business model that looks like it won't do too well. But then, that's the point: it is, or should be, an experiment. You can't know what will or won't work at the start of a business venture, and you can't be sure that the business model that worked (or didn't) once will any longer. And just because people say that doing something like charging for access to information is "obviously" going to fail, there is no way anyone can know for certain without trying.

If anything, technology companies, for all their need to be inventive in creating products and services, often fall prey to experimental aversion, instead acting like a Twitter when it procrastinates on deciding on a business plan, instead trying to spin indecision and simply not knowing what to do into a virtue. But all that does is leave important decisions into the realm of theory. Given that we're all mortal, we're not going to be right all the time. Even though saying "I don't know" is the unforgivable sin in corporate America.

Experimentation in business, however, is an old concept. Direct marketers have been doing it for decades, testing different offers, sales letters, products, mailing lists, and other aspects of their campaigns. I've even seen the approach in high tech at times, as companies try to find the right pricing, features, and marketing campaigns. But eventually executives get cowed by all the pundits shouting, "You have to do this," or "Go that way." To be fair, often the masses are correct, and there's something that a company should be doing. At the same time, there are plenty of times that the masses are asses, whether agreeing or disagreeing. A healthy dose of experimentation and seeing for yourself what could actually work, maybe even become a market advantage or even a game-changing strategy, is a great antidote.

Image via stock.xchng user ninci, site standard license.