Monetizing Content

How to make money from web content is the question facing many media and publishing businesses today. While the likes of Google seem to be raking it in despite the recession, it seems other industries are at a loss when it comes to competing with the concept of ‘Free’ that dominates the Internet.

Chris Anderson, who famously coined the term ‘The Long Tail’ has recently written that Free is a new business model. Although it’s interesting to note that his latest book entitled ‘Free!’ actually isn’t.

While ‘Free!’ presents a compelling argument, many commentators including Malcolm Gladwell, are not convinced.

So if you are still looking for ways to monetize content, what are the things you should consider?

It’s easy to jump straight into the detail of how you are going to make money, and forget the purpose of your product. The first step is to always ensure you know what your customer wants and provide them with the best possible product. If the customer is king in retail stores, the user is king on the web.

There needs to be a focus on building a user-base for the product and monetizing content later. However, as YouTube has shown, there is also the risk of concentrating on your user base for too long and not getting to the stage of building a sustainable revenue model.

The business model ‘Fremium’ coined by Jarid Lukin may offer some pointers. This is similar to that set out by Chris Anderson, but isn’t quite as utopian and is therefore a good option to consider when thinking about how to monetize content. The business model essentially works by offering the basic services for free, once the user becomes a loyal they may advance to the premium services available. Web sites such Linkedin, Skype, Flickr and more recently Spotify all use this model.

The Newspaper industry faces one of the biggest challenges to monetize its content as print circulation and advertising revenues decline. Newspaper publishers have responded to this challenge in different ways.  The Guardian for example has created an Open Platform and uses a social media strategy to ‘weave itself into the fabric of the web’. Although it does not attempt to monetize content, by creating a bigger footprint for the brand it has been able to build a profitable online dating service that allows people to join for free, but charges a subscription to get more out of the service.

The word ‘Free’ is still the most powerful word in marketing, not everything has become free just yet  - even on the web. The iPhone has demonstrated that millions of people will pay small amounts for applications that entertain and inform, proving that it is still possible to build revenue streams even in our brave new world.