Quality Content Costs Money


[Originally published November 3, 2009]

The Web 2.0 world has released a surge of content and challenged the status quo. Yet an increase in quantity doesn’t automatically equate with quality. Just because the barriers to entry have been lowered for journalism, graphic design, copy writing, photography, and songwriting it does not mean that we now have better news, better design, better writing, better photography, and better songs. On the contrary, generally it’s worse!

Crowd sourcing is all the rage right now for tech companies. An army of free workers providing lots of content seems like an attractive business model. On the flip side, there are plenty of case studies of bloated content companies, like newspapers and record labels, that are having difficulty adapting. Does this mean that commercial enterprises should not be paying for the content that produces their revenue? Do newmedia companies have the magic formula for making money for nothing?

Path forward I believe that viable companies will take a hybrid approach. There will be much more content but the stuff that is valuable will not be free. They will have to pay for it in some way. Writers will be paid for their contributions. Songwriters will receive royalties for their music. The pricing and revenue sharing models will be adjusted because long-term paying for quality will result in a better customer experience.

Jason Calacanis, the CEO of Mahalo.com, reported today that they paid 100 writers $40,000 in October. He understands that quality content and an engaging customer experience will make them successful long-term. With so much bad content out there it is nice to see that some people still value the good stuff enough to pay for it.