It was announced today, http://selnd.com/qcySJG – that Walmart, bought One Riot, those with the “Killer Social Targeting Engine” (their words not mine), to better be able to connect with customers.  They speak of the intersection of social, mobile and retail being and how this will help give consumers what they want at any time.  Coming off of the idea that Social Business is the future, this acquisition by the world’s largest retailer, makes for some really interesting thinking.  Big Brands buying out development and research shops…is this what the future of Social business looks like or is it just a case of not being focused on the core business?
Drop up a note and let us know what you think.

If I did that viewership would probably slow to a trickle.

<img src=”http://www.sparkminute.com/wp-content/uploads/2011/08/HandsCashRegister.jpg” title=”HandsCashRegister” height=”200″ width=”300″ />Nobody wants to be told to cough up a nickel every time they click on a web page. It completely nullifies the viral effect of social sharing. Oddly, for years it was believed that micropayments (a.k.a. “Gimme a nickel for this article”) would be the way content producers were going to be paid for content. A nice idea that took off like a fart.

When the micropayment idea failed, then it was believed, “Well, if they won’t pay a nickel, they won’t pay anything.” The whole “pay for content” industry threw up their hands and said, “I give up.”

The problem wasn’t the cost. The problem was the disturbance in consumption and the undervaluing of the content. People think their time and what they’re consuming is more than a nickel. When you condescend to someone and say, “Please give me five (or even less) cents to read this article” it’s lowering your value of that person visiting the site and it’s lowering the value of your content.

<img src=”http://www.sparkminute.com/wp-content/uploads/2011/08/iTunes99cents.jpg” title=”iTunes99cents” height=”146″ width=”300″ />The real breakthrough moment for content monetization came about when Steve Jobs said, “All songs are $.99 each.” That moment defined the finances for the entire digital content industry, not just music. Digital songs cost a buck. Now I know what to compare everything else to. If a song is a buck, then a TV show is $2 and a movie is $4 to rent, $14 to own.

Those comparisons didn’t stay within the realm of iTunes. It bled into all sorts of media and everyone was subject to Steve Jobs’ definition of the market. While a formidable competitor, we should all be thanking him, because the paid digital content market was floundering up until then. All sorts of media had conflicting valuations. For example, I remember when SprintTV released the first mobile streaming video network, which cost about $10/month. At the same time another company was offering up daily comics for $10/each a month. Want additional comics? Then you have to pay another $10/month. That didn’t make any sense. Why should a single comic strip be the same price as multiple channels of streaming video? The reason for the failure in pricing is nobody, until Apple and Jobs, had enough of the content market in any one medium to simply announce, “This is what it’s going to cost.”

Now that people are paying for digital content, and we’re making sense of what has value. How have people successfully charged for their content, and how can you do it? Here are seven successful techniques you can use to actually charge people for consuming your content.

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<h3>1. Tier your content</h3>
<img src=”http://www.sparkminute.com/wp-content/uploads/2011/08/StepsMoney.jpg” title=”StepsMoney” height=”188″ width=”300″ />There are different degrees of fans of your content. The bigger the fan, the eager they are for more content and the less price sensitive they are to get it. The band Nine Inch Nails tested this theory by successfully creating <a href=”http://blogs.siliconvalley.com/gmsv/2008/03/nine_inch_nails_and_the_multitrack_music_model.html”>six different album packages at different prices to sell to six different markets</a>. At the lowest end, Nine Inch Nails released a few free MP3 tracks for download. At the highest end, überfans could spend $300 and get a limited edition autographed deluxe package. That’s a lot of money, but they sold out of the limited edition package. Had they just sold an album for $15 a pop they would have left a ton of money on the table that their biggest fans were willing to pay for.

As you build your fan base, you can start tiering the packaging and distribution of your content. Think about different ways you can do that. You can create special packaging, more content, or release certain content early for those fans that want it before anyone else.
<h3>2. Compare the better experience of paid vs. free</h3>
<img src=”http://www.sparkminute.com/wp-content/uploads/2011/08/CreditCardSwipe.jpg” title=”CreditCardSwipe” height=”200″ width=”300″ />To get people to pay for content, you need to have some other content, ideally for free, for them to compare it to. The purpose of the free content is to get people to start sampling, trading, and becoming a fan of your content. You use the free content to sell them on your paid content. When you offer the option of paid content it has to be a much better experience. That can take the form of “Here are all ten lessons packaged for you.” Or, “Here are the ten lessons, plus an interview with an expert who is going to walk you through each step.”
<h3>3. Fabricate scarcity</h3>
The entire film industry is based on fabricated scarcity. Technically, they could put out a movie online for everyone to consume the second it’s done. But in order to protect the revenue structure of a film, they release the film via different venues (e.g., theater, DVD, cable, streaming, free TV) over time. We have all been trained to understand and accept this fabricated scarcity model. If we desperately want to see the movie now we shell out $11 to see it in the theater. If we’re price sensitive and not so concerned about the immediacy of seeing the content, we’ll wait six months or so when it’s released on DVD, or maybe two years when it’s available on free TV.

You can do the same with your content as well. Put content up for a period of time and announce that it will only be available until next week, and then it will be taken down. The problem with this technique is you have to stick to it. Too many people who try this technique buckle and make announcements like, “We’ve extended the time!” I see this bogus scarcity happen all the time with photos from races I’ve run. I’ll get an email in my inbox that says that I have only until Friday to purchase my photo. And then magically, they’re able to pull a few strings and keep it up for a couple more weeks. That technique works only once. You keep repeating it and the fabricated scarcity you’ve created holds no water.

I’ve got a detailed explanation of this technique in my article <a href=”http://www.sparkminute.com/2010/07/08/make-money-from-content/”>”How to increase the value of content without ever changing the content.”</a>
<h3>4. Charge for the rest of the story</h3>
<img src=”http://www.sparkminute.com/wp-content/uploads/2011/08/NNFLogo.jpg” title=”NNFLogo” height=”184″ width=”300″ />Many sites have done this by showing the first paragraph and then making you pay for the rest of the article. That method has questionable effectiveness. I believe this technique works better for visual or audio media. For example, comedian Jimmy Pardo has a podcast, <a href=”http://pardcast.com/”>”Never Not Funny”</a> where he offers up the first 20 minutes of his 90 minute show for free. If you want to hear the next 70 minutes you’ll need to pay. The reason it’s more effective is because the viewer/listener becomes invested in the programming. If you read a paragraph or two of an article, you don’t necessarily become invested in the content. Therefore, you’re not that compelled to purchase.

For more on Jimmy Pardo’s business model, <a href=”../2009/09/18/making-money-from-podcasting-never-not-funny/”>read and listen to my interview with the show’s producer and co-host, Matt Belknap</a>.
<h3>5. Don’t just convert free content to paid without adding something more</h3>
I don’t think I’ve ever witnessed a successful case of a purely free content stream just converting to paid content without actually offering something additional that wasn’t available with the free content. NYTimes tried to do this multiple times in different incarnations and it wasn’t successful. I don’t know where they are with their current paid model, which requires people to subscribe after they’ve consumed a certain number of articles.

When Jimmy Pardo moved from a free to a paid version of his podcast, “Never Not Funny,” he extended the length of the show from 60 minutes to 90 minutes and also offered a video feed of the show.

<img src=”http://www.sparkminute.com/wp-content/uploads/2011/08/MacOSKen6Logo.jpg” title=”MacOSKen6Logo” height=”237″ width=”186″ />Another example is Ken Ray with his show <a href=”http://macosken.com/”>Mac OS Ken</a> which is a daily weekday podcast about everything connected to Apple. He was doing this show for free and wanted to charge for his show, so he created a longer form interview style “Day 6″ show which he charges for. <a href=”http://technologizer.com/2009/09/21/making-money-from-podcasting/”>Read and listen to my interview with Ken Ray</a> from my <a href=”http://mashable.com/2009/10/01/podcast-money-making-tips/”>”Making Money from Podcasting” series</a>.

You can’t expect people to pay for something they used to get for free. It’s a poor value proposition and it doesn’t build trust with your audience and fans. Add something additional and then ask for money.
<h3>6. Charge for archives</h3>
People will discover your content at different times. Once they get hooked, and they like you, they’ll want to go back and check out your earlier stuff. Make them pay to see the earlier stuff. This is a version of fabricated scarcity. You can have it for free if you watch it this week, but after that you’ll have to pay for it. The advantage of that model is the people who want it for free will be forced to visit you often, thereby creating a connected brand relationship with them. The popular NPR podcast, <a href=”http://www.thisamericanlife.org/”>”This American Life,”</a> utilizes this technique.

Marc Maron charges for the archives of his podcast, <a href=”http://wtfpod.com/”>WTF</a>. When you sign up for the “Premium content” you get access to extra shows and the archive.
<h3>7. Compare to alternative costs</h3>
One of the problems with charging for content is knowing how much to charge. If you don’t know how much you should charge, chances are your audience doesn’t know how much to pay either. Help both parties understand by comparing costs. For example, say you have a five-part education series on a certain topic. Look at conferences and trade shows that are offering the same information. Or maybe a book, CD, or DVD series that’s offering that information. Then provide links and say, “You could get this series for $X or go to this conference for $Y, but for just a fraction of that cost you can buy my series online.” That way they think they’re getting great value. You presented the options and showed that this is the better deal.
<h3>Delay gratification</h3>
As we all know, it’s not easy to get people to pay for online content. Sometimes you just need to give it away for free in order to be seen. But there are other extremely valuable reasons for giving away your content for free. The people who become fans of your free content become your word-of-mouth marketing force. They are the ones that will tell others about your content and hopefully convert themselves and others to consuming both free and paid content.

People can pay for your content in other ways besides currency. They pay by telling others about you. Or they pay by giving you their email address for your newsletter so you can further market to them. Or they connect with you in a social space like Twitter or Facebook so you can maintain an easy to manage dialogue and relationship.

Recognize that people can pay in different ways, and in the end if you accept attention of word-of-mouth marketing as a form of payment (because otherwise you’d be paying for that yourself out of pocket), then you’ve still achieved your goal of getting money for your content.

<em>Stock photos courtesy of <a href=”http://shutterstock.com/”>Shutterstock</a>. Creative Commons photo credit to <a href=”http://www.flickr.com/photos/86624586@N00/112835575/”>kevinzim.</a>
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He detail’s a small change by British newspaper The Independent to the way users are able to “like” content on it’s website. Now, instead of just being able to like the entire newspaper itself, or individual articles, users are able to like the author themselves.

It may not seem like a huge detail on the surface, but it does articulate the degree to which content providers are tailoring the structure of their offerings to better suit the way people act & share on social networks, especially Facebook.

And sure, that makes perfect sense. Why wouldn’t you as an industry (in this case, the press) adapt to the changing desires of your audience as it relates to the available technology?

Speaking with our CEO about this, he asked me “What’s available to personalize and share music on Facebook?” in the same vein, knowing what a huge music fan I am. And it’s amazing, but almost nothing could come to mind. After pondering, it seems that the most common way people share a song on Facebook is to find a video for it on YouTube and use that.

But definitely, it’s always a 3rd party service you do the sharing from. Grooveshark is another example, which provides a short URL directly to the song and lets you share it through whichever social network you want.

But Grooveshark hasn’t even been licensed by the recording companies to operate (yet surely hopes to be down the road), and therefore allows them zero control. And those same companies are removing videos from YouTube all the time. Unlike The Independent which is controlling the destiny of it’s content, and opening it’s offerings to social media, what are the recording companies doing?

We’re based in Toronto, and yesterday a pop-culture critic for a local daily newspaper The Toronto Star commented on 4 new music singles being released on the same day, one being from Avril Lavinge. So, I searched for her in Google, found her website, and looked for a way to either listen to her new single, or share it with my friends on Facebook…neither of which existed.

What I did find quite apparently were banner ads to buy the song from iTunes. When is this issue going to be taken seriously by the industry? Heaven forbid full integration with Facebook, and full sharing capabilities. A lot of missed opportunities are circling overhead, if anyone cares to observe.

iTunes

And yet, the music industry has yet to empower a competitor seriously enough as to threaten it’s dominance… Why? Unfortunately there isn’t one, clear, mappable reason.

What is obvious however, is why iTunes has been so successful. Here’s a quick list from our perspective, and it’s much simpler than you might expect.
 

1. Simplicity: Just like all of Apple’s products, the strongest focus is on user design. The navigation is crisp and intuitive. You’ll find what you’re looking for quickly and easily, with no confusion.
2. Vertical integration: When paired with a hardware product from Apple (iPod, iPhone), transferring music to it works just as quickly and easily as browsing the iTunes store. Because they created both offerings, this integration can be guaranteed.
3. Content selection: The catalog is stacked. The story goes that Steve Jobs lobbied fiercely to get all the key recording labels on board to make this happen. And now that he’s delivering such a large critical mass of users, it would be very difficult to leave.

Whether in practice, or theory, there’s been no other software vendor able to provide the same quality through and through on a digital music app.

The blogosphere comments that Google is close to expanding it’s music effort into a portal-driven purchasing engine, and Spotify has seen success internationally, yet continues to face U.S. launch hurdles.

Regardless, with iTunes having this much of a head-start on competitors, it’s soon-to-come teenage years are looking rosy.

Why would Google do such a thing? To shore up full-length content on it’s YouTube platform.

With studios taking legal action towards Google on the one end, and users uploading more “funny cat” videos than thought possible on the other, securing premium & engaging content for the long run is of a growing concern to the division.

If it’s going to compete and stay relevant against the likes of Hulu and Netflix (and others like Vudu, iTunes) who have a better premium content offering that is both relatively stable, and above the board legally, then premium long form content will be it’s kingmaker.

Plus, YouTube needs to start turning a profit. Hulu recently announced the company will earn $240 million in revenue in 2010, up from $108 million in 2009, largely from serving premium ads that draw real dollars. While The New York Times reported in September that YouTube is only expected to turn a profit as of this year, on revenue of $450 million.

October comScore data states that Google Sites, driven primarily by video viewing at YouTube, ranked as the top online video content property with 146.3 million unique viewers at month’s end. It has considerably more viewers than all of the U.S. TV networks combined.

Eyeballs are not the problem, yet the lack of premium content and premium advertising prices. Interesting to watch this and see where it goes. You know Hulu will be.

Can this idea really work? Can 24 carriers along with three device manufacturers operate more smoothly than just a single device manufacturer?

My answer: Good luck.

I’m sure when the announcement was made there were cheers all around. Execs were slapping each other high five and saying to each other, “Watch out Steve Jobs.” And then as soon as everything calmed down, they all said to themselves, “Oh shit.”

Wholesale Applications Community needs to consult with a cat herder

Yes, oh shit is right. Just the technical complications alone with different devices, different networks, and different governing rules are complication enough. But if you think it’s hard to get agreement on anything within your organization of 100 people, think about 20+ worldwide organizations. I wouldn’t want to even try to get agreement on whether they’d like Coke or Diet Coke served. Years ago I worked for Sprint and I was amazed at how long every single task took. I realized I could do so many tasks quicker if I just did it myself. I hosted and produced two podcast series for Sprint (a B2C and B2B version), and was seen as just the guy who could do it all when it came to podcasting.

Do dictatorships work better than democracies in mobile?

At a much grander scale, Steve Jobs is the guy who can do it all when it comes to creating a computing and content market. He did it with Apple computers, the iPod, the iPhone, and more importantly the resulting iTunes store for movies, music, and applications. In a conversation with friend and Apple industry expert Andy Ihnatko, he said of Steve Jobs, “If Jobs says every computer gets a cup holder, then every computer gets a cup holder. He dictates the market for his computers.” This didn’t happen in the PC market, it didn’t happen in the mobile phone market, and good luck trying to get it to work.

Mobile carriers are very protective of their respective networks. They don’t operate like the free and easy Internet. Geez, just to do an SMS campaign over their networks you have to fill out a form to explain what you want to do and how long the campaign will run. That’s just text. Now the carriers are going to agree on a whole how to manage applications. Sounds great in theory, horrible in practice.

But then again another idea that sounded great in theory, horrible in practice, turned out to be great in practice. I’m talking about Wikipedia.

Can the Chinese fire drill behavior of the multiple carriers eventually come together and form something useful like Wikipedia? Check back with me in a year.

Creative Commons attribution: Star5112 / CC BY-SA 2.0