Cash, Credit, or Eyeballs: How We Pay for Digital Media
With the presidential elections around the corner, freedom of choice is a hot topic in the news. It got even hotter this week when Amazon joined the fray and gave customers the freedom to choose whether to see ads on Kindle Fire tablets.
The price for freedom from ads: $15.
The move is making headlines partially because it may be the most transparent example yet of the digital industry’s quiet goal: to explicitly train consumers to understand the trade-off between paying for content with their dollars vs. their eyeballs.
Changing How We Think
It’s the message NPR radio hosts implore us to accept year after year: You have to pay for the content you consume. With traditional media, we didn’t have a choice about how we paid. We tuned into broadcast television and sat through the commercials. Accessing content didn’t require opening our wallets, but we paid with our ears, our eyes, and our time.
Then came premium cable channels and satellite radio, which blazed early trails in the frontier of media subscription models. We paid for the content we wanted. And with the rise of digital content providers, we have an ever-increasing number of opportunities to pick between seeing ads or coughing up some dough.
Of course, that doesn’t mean we’re always happy about either one. Think about the digital services you use most—maybe Instagram or Pinterest or Tumblr. How grumpy would you be if they suddenly started charging you a monthly subscription fee to access your account? Okay, so what if it was still free to use, but they showed you ads instead, like Youtube and Facebook do? Don’t like that either? Well, that’s too bad—because regardless of whether you’re given the choice between paying a subscription or seeing ads, the decision has to be made.
Why Someone Has to Choose
I hate to sound like a record label in the wake of Napsterpocalypse, but nothing comes for free. Everything you love in this world—whether it’s a song, a tablet, or a mobile app—was built or created by someone, and most of those people are looking for compensation.
Pre-revenue startups get a lot of flak for not fleshing out their monetization models soon enough. But provided they don’t go under or get acquired, all startups must eventually decide whether to monetize with dollars or eyeballs. Every business owner must choose: either another company pays for access to your customers, or your customers pay you to be left alone. Some companies choose both (like the Hulu Plus “ad-supported subscription service”) but those who refuse to choose can’t survive.
Since the decision has to be made anyway, it’s pretty cool that Amazon is joining companies like Pandora, Spotify, and Zynga who give the power to choose back to their customers. Advertising is required to keep the Internet open and free, and people seem to like marketing messages that are meaningful or entertaining, but the rise of opt-out digital subscriptions is testing whether a free internet is what people actually want.
What’s it Worth?
What’s interesting about Amazon’s move is that $15 seems awfully cheap compared to what the company could make off a consumer’s eyeballs over the course of their use of the product. Either this is an indication that Amazon Special Offers display advertising is super cheap, or the company is pulling (another?) money-losing publicity stunt to assuage unhappy Kindlers.
Either way, it’s a good reminder: The things we love come with a price tag that ultimately we have to pay. As media becomes increasingly digital and as online payment options improve, we’re bound to see more and more companies offering their customers the ability to opt out of advertising.
So what does that mean for the ads that remain? I think it means they’re going to have to get a heck of a lot more awesome, and I’m personally looking forward to that.
Anneke is a founding executive and leads the business side of Reserve, one of Fast Company's Most Innovative companies of 2016. She joined Reserve from the Google Creative Lab where she led teams building the future of tech. An advisor to NPR and a startup veteran, she is an experienced entrepreneur and storyteller who speaks and writes on topics related to technology and culture. She lives in Brooklyn and can be found online at @annekejong.More from this Author