There really isn’t anything quite like going into your mailbox to find a free sample of your favourite shampoo or breakfast cereal, and when it comes to asking Canadians to potentially pay for Web site content, they still want it gratis.
According to a study conducted by Ipsos-Reid in June called Pay for Content Model Not Likely to Succeed While Most of the Web is Free, of the 1,000 people polled both via e-mail and telephone, only five per cent of Canadians said they were willing to pay a monthly fee for access to Internet sites.
Currently, the majority of sites are supported through advertising but with the current economic conditions coupled with the events of Sept. 11, dot-com sites are reeling in uncertainty. The problem is that there has always been a perception that the content on the Internet is free, and with portals that overlap in content, it is not an easy sell.
“If you’re talking about two sites that are very similar where one is free and one isn’t, well the obvious draw is to go to the free site,” said Marcie Sayiner, senior manager of research at Ipsos-Reid in Vancouver.
Take the case of Napster, for example. After years of reigning king of free music downloads, once the music industry succeeded in shutting them down, competitors, such as Morpheus, have seen increased traffic to their site. Sayiner said the purpose of the study was to gain an understanding into the consumer’s reluctance or acceptance to paying a monthly fee, staring as low as $3 and hitting a ceiling of $20. But even with nearly 80 per cent of the respondents saying “no” to the idea, she said businesses will inevitably have to take the plunge. “Everybody needs to flip the switch and agree that they’re going to start charging for content, and all do it at the same time.”
For the past year, Dan Roopnarine has been attempting to create a pay site for his Web site www.martialvision.net, a multimedia site created with video where diverse martial arts instructors promote differing fighting styles. While the site still exists, he learned rather quickly that consumers were not yet ready to pay for their content. “The membership aspect didn’t work. People don’t feel comfortable enough to pay for a membership when they can still get stuff online for free,” said the consultant at Application Enhancement in Brampton, Ont.
Interestingly, he said he agreed with Sayiner in so far as the possible rates that consumers would pay, citing $19.99 as the maximum amount they would pay, but said that the amount should be billed as a yearly cost. He added that with so much of the information available on the Web, and the overlapping of the data, attracting people to a site is a challenge all on its own. When combined with the threat of including a charge, the numbers are not favourable, he said. “You need the masses to generate any source of income. For every 100 people who visit your site, you’ll be lucky if one or two people sign up.”
Another possible approach is the pay-per-use model, where the user would pay an amount as a flat charge and never be billed again, but he remained skeptical, saying one company had tried to offer seminars online using this approach, only to have it fail miserably.
Changing the mentality and perception of users will be no easy chore, according to Penny Gillespie. “Universally, there is a perception due to past precedent that the Internet is a free tool and the information and content on the Internet are perceived to be free,” said the senior industry analyst at Giga in Centerville, Va. She said for the concept to flourish, users will first need to admit that the information they are viewing is seen as valuable and only then will sites be able to charge. To date, that has yet to happen, she said.
Internet access began on a pay-as-you-surf model. Only later did telco companies decide to implement a flat charge that has worked well to date. She said that inevitably, the market will transform the Web and consumers will pay to view content, but only when much of the free information begins to disappear.