Pay content strides forward

Internet companies have quietly been moving toward paid content model as opposed to the fee-for-all nature of today. The future may well be the tiered pay model of television.

Major League Baseball will begin charging listeners for audio broadcasts of games over the Net as the season kicks off April 1, in a move that could portend the online revenue model of the future.

The league joins other companies in implementing a model that strays from the free-for-all nature of most content on the Web. As the softness in online advertising continues, many others are questioning whether their content and services have enough value to justify a charge.

MLB Advanced Media, the interactive media arm of MLB, has determined audio broadcasts of its games and customized highlights are extremely valuable. It's partnering with RealNetworks to offer an entire season of streaming audio feeds of games - 4,000 of them, including home, away and foreign language coverage - for $9.95.

Will you pay for Web content?YES

Fans who want to hear the game through a better player can pay $4.95 per month under a six-month commitment through www.real.com.

The games will also be available through the RealPlayer GoldPass subscription service.

RealNetworks is guaranteeing MLB a minimum of $20 million over three years under the deal that makes RealNetworks the exclusive distributor of baseball's audio and video feeds over the Net. The companies wouldn't say how much fans will be charged for the customizable highlights service, due out in May, which will let fans watch replays of any pitch.

MLB.com will continue to offer a free service of limited highlights.

Bob Bowman, president and CEO of MLB Advanced Media, said live video feeds of games are not included in the deal. He told reporters it could be another year before viewers can watch games online, given entanglements with rights holders and the lack of "superior technology" necessary for clear transmission.

Other companies have quietly been moving to the paid content model. Variety.com now offers only headlines for free, much like the Wall Street Journal's online edition. Salon.com will introduce an "ad-free" version of its magazine in April with exclusive content. Britannica.com, the "dot-com deadpool" F***Company and Rival Networks have also recently added premium content.

Yahoo! continues to build on its fee-based content offerings, which now include auction listings, career postings, photo developing, bill payment services and additional mail-storage space. Yahoo! on Monday launched a premium subscription service of real-time streaming market quotes, news and analysis priced at $9.95 a month. Analyst Jim Stroud at The Carmel Group said not all content can be sold, but what can will likely come from niche sites visited by passionate consumers. "The one thing the Internet has taught us is customization and personalization is important to consumers; I think broader Web sites will have a harder time getting [subscription] revenue."

Professional sports are charged with passion, which is why Rival Networks thought they could be good candidates for the model. In December the company began offering premium content for $29.95 per year and $4.95 per month on 50 of the 600 sites in its network. David Eckoff, senior vice president and general manager, said the company has sold over 21,000 subscriptions and has generated $441,000 of revenue.

"We already judge it to be successful and we will continue to expand into new premium products," Eckoff said.

Research-related sites may also be able to get away with charging, as Consumer Reports and Ancestry.com are attempting to do. Consumerreports.org is profitable, according to John Sateja, vice president and general manager of new media at Consumer's Union, which owns Consumer Reports.

Like its sister magazine, consumerreports.org has never accepted advertising, and exists entirely as paid content. The site now has 540,000 subscribers, up 40 percent from last year. Only 10 percent of site visitors also subscribe to the magazine. Nearly 75 percent of visitors buy an annual subscription to the Web site for $24. The rest buy a monthly subscription for $3.95, though Sateja said this segment has a lot of turnover, since these folks tend to research only a particular product.

Ancestry.com, a site under the MyFamily.com umbrella, has over 290,000 subscribers paying an average $65 per year to subscribe to a database of names and records for researching families, according to CEO L. Gregory Ballard. The average person spends 50 minutes on the site each month and it has a 70 percent renewal rate, Ballard said.

"There's a tremendous value being delivered through the Web in a way that couldn't be done offline," he said.

Eventually, the Web could follow the tiered pay model of television, said T.S. Kelly, director of Internet and media strategy at Nielsen//NetRatings. "There are the all-you-can-eat models and certain premium models that offer special content," Kelly said. "That to me is much more of a possibility today than ever before. Free doesn't work for long-term growth and dependability."

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