Content costs, and right here is where you start paying

The issue of media owners' desire to charge for online content has once again been thrust into the spotlight.

Channel 4 had planned to stream this year's Reading Festival over the web, and charge music fans for the privilege of watching.

But yesterday the broadcaster performed a volte face and ditched the idea. It will still stream coverage, but it will be free.

It will charge next year, we're told. Probably.

This dithering comes hot on the heals of The Times' decision to dip its toes in these murky waters. Murdoch's mighty organ is going to ask puzzle buffs to pay to complete its daily crossword online.

That seems a sound strategy: it won't cost the paper much to put that content on the web; the crossword is world famous; it has a loyal following. So people may well be prepared to pay up, but if not, The Times won't have lost much money.

The Reading Festival is a whole different ball game. Filming it (even though the coverage will presumably be broadcast as well) is a major undertaking. The target audience of impecunious youngsters baulk at paying £2 a pint, let alone a few quid (or whatever it was going to be) to see some grainy pictures of their favourite stars in a window smaller than your average fag packet.

What C4 realised - just in time - was that this is not the sort of content that will work in a paid-for environment. It simply isn't suited to it, and the market isn't ready to pay for it.

The Times crossword is the right kind of content - but it remains to be seen if the market is ready even for that.

But at least this is a good way of finding out. Many other media owners will be watching to see what happens with interest.

In the long term, the only kind of online content that people will be prepared to pay for is likely to be highly specialised and of high value - several niche scientific journals currently charge and are doing well. Comprehensive archives too may prove a viable, and valuable, revenue source.

But any company wanting to make money online with a pure content offering will have to make sure their business model is able to work even when the core product is free.

It's not easy. But it's not impossible.

For related news, see:
Bad boy Eminem raps for free
http://www.si