Monetize the Audience, not the Content

Fred Wilson has an interesting discussion going on in response to his post, "Monetize the Audience, not the Content,"   Essentially, his point is that subscriptions are the answer.  He points to FT.com where, according to him, they let you access for free until the 10th event. Then they require subscription.   His most important point is a "frictionless" solution. 

I pointed out that we have succeeded in generating interest in subscriptions by syndicating "teaser" content on contextually relevant sites that dynamically updates in real time what's happening.

I then responded to a comments about charging for news instead of archives.  I agree that it is dysfunctional that news companies give away news for free and charge for archives. But, agreeing with Fred that charging for Breaking News is difficult,   I point out that we have to consider all the competitors - including 24 hour news cable networks and radio - which are free.  However, there are ways to add value.  Later when Paul Smalera responded by clarifying, I responded to him by sharing the WSJ breaking news updates which I pay to have sent to my email/blackberry.  Wanting to encourage a discussion about what consumers will pay for, I shared my observations about the free/ad supported business model:

I think there are 3 thoughts to consider: 1) the business model radio and television used to disrupt the media industry - free, ad supported - may have made a lot of money for a short period of time for a few companies at the expense of print competitors, but it de-valued the media industry as a whole. When entering a market, one must contemplate that you could win. As Colin Powell said to Dick Cheney, "You break it, you own it." 2) disrupting the market by offering a superior product that will command a premium is much more fun on every level (to make, to sell, and to buy). 3) the law of market gravity is real: the price you start with will go down. So if you start free, then what? You may find cheaper ways to produce, sell, or finance, but the competition will not let you raise price without meaningful value improvement to the consumer.