Online Content: Turning costs into revenue for your organization

Is your business throwing around the idea of adding online content or services in exchange for a fee or simply to facilitate your work? Whether it be written content, multimedia or value-added online services, the models for distributing and pricing online content are evolving quickly. How are the different categories of online content and services progressing? What are the success factors for selling online content and services?

Trends per category

Online content can take many forms. Businesses that offer adult content and gambling games online are the pioneers and leaders of online content. Those two industries, which have seen the potential social risks faced by their consumers reduced thanks to the Internet, are perfectly adapted to this medium. Online games, dating sites, personal growth and business information sites, as well as communities of interest are the rising stars of online paid content, all recording impressive growth rates in 2003. In the longer term, keep an eye an Internet television and portals as they will be registering strong growth due to the fact that online TV is a new phenomenon and portals retain the mass of users who will see some services become paid services. Lastly, mobile content, online films and music (competing against give-aways) and sports-related content are last in line for revenue growth in the upcoming years. However, all of these categories will experience positive growth in the next five years. All industries and economic sectors are exploring delivery of online content and services and are examining the success factors of taking this approach [1].

This type of initiative merits a bit of strategic thinking: in your industry or economic sector, who can you charge for what type of content or service, at what price and how ? The following are a few practices that have stood the test of time, that apply to several industries and that you may use to jumpstart your own reflective thinking.

Completing the product offer

All too often, businesses that take the leap into digital marketing will attempt to create an electronic replica of their product instead of concentrating on aspects unique to the Internet that could present added value for a company’s present and potential clientele. These unique aspects can be profitably employed to complete the company’s traditional product. Several online newspapers employ this technique admirably by offering an electronic version of their daily paper, thereby rounding out their news services with instant news updates and document archives. A free portion is offered, enabling visitors to get acquainted with the product and providing a means for the company to acquire new clients, but a paid section is also available for added-value services such as archives.

Creating relationships

Pooling people together is one of the most natural features of online services. Online dating sites are a prime example, while a subtler and less known example is the phenomenon of professional virtual communities where only real pros connect to discuss a particular subject. The paid-service aspect of this type of site stems from the guarantee to users that the community is comprised only of people truly engaged in their profession or in the subject at hand. In this manner, users can rest assured of the quality of information and the motivation of community members and can therefore expect the discussions to be pertinent. Furthermore, it has been proven that web surfers who participate in cybercommunities are generally twice as loyal and make purchases two times more often than other consumers, despite the fact that they often represent only a third of all a company’s visitors [2]. It can therefore be very lucrative to identify these people.

Exclusivity

Many types of exclusivity exist and allow a business to charge for online content and services. The temporal nature of content is often exploited: very current content, such as stock listings, can be sold for delivery in real time rather than with a 20-minute delay. Inversely, access to an archive can also be offered as a paid service. Exclusive access to a private section of an artist’s site can be offered to CD buyers or access to a game’s beta version for paying members of a community of players are other methods of generating revenue from content that previously generated nothing other than… expenses.

Rethinking information

It is natural to think of offering web surfers paid access to a private section containing exclusive information, but the opposite can also be worthwhile: the remedy for surplus information is to make a selection or strategic categorization of pertinent information. Giving consumers who are drowning in sea of information only exactly what they need may prove to be very profitable. Large educational institutions and numerous financial services companies opt for this type of strategy that often produces convincing results.

Non-monetary benefits

Rather than charging web surfers for the content you wish to offer them, other types of compensation can also be profitable. These examples, which are not listed in the records books for successful online content (because they are not paid services), can be valuable. In particular, banks save millions of dollars a year thanks to online services and greatly increase their clientele’s loyalty at the same time, resulting in direct revenue growth per customer. Other models tap into the motivation of the existing clientele to acquire new customers; for instance, when a player refers new players to join, s/he receives exclusive game tips that will enable him/her to improve their game skills and beat their competitors.

All products and services do not adapt in the same manner to these business practices and certain risks are to be expected. Note especially that web surfers are presently dissatisfied with the methods of payment currently available for online content [3]. Adviso Consulting can help you to identify the potential benefits for your business, use the Internet for offering content and services to your clientele, as well as develop and implement a winning strategy to guarantee that your venture is a profitable one.

[1] E-marketer, (November 2002)

[2] Ambrozek, Jenny & Bundesen, Lynne, EContent magazine, (September 2002).

[3] PaymentOne, (April 2003)