Free today? Not for long
Disney plans to experiment with a paid-subscription model online, Robert Iger said, at a conference sponsored by Fortune magazine.
The Disney CEO added that people are willing to pay for quality content if they perceive it has value, MediaBuyerPlanner reports.
A subscription model will give Disney better knowledge of customers, as their activities and interests can be tracked. That, in turn, will lead to the ability to charge marketers higher prices, he observed, writes Bloomberg.
Iger said privacy concerns about such tracking are overblown, and it is mostly older consumers who fear for their confidentiality.
Though consumers have become used to free content, Iger believes it is wrong to assume that content will be difficult to monetize.
Content providers of all stripes have begun to explore paid models, as many agree that the current online model of free content is "broken." Media companies like MediaNews Group and News Corp. have begun or are expanding their paid models. The New York Times also plans to once again look at charging for its content.
News Corp.'s Rupert Murdoch pointed out last spring that media is in the midst of an "epochal debate" over the value of content. He claimed that in terms of free content, "The current days of the internet will soon be over."
Barry Diller, CEO of IAC/InterActive Corp., also believes that the internet is passing from its free phase into a paid system, he told attendees at the Advertising 2.0 conference in June. "Inevitably, I promise you, it will be paid. Not every single thing, but everything of any value." Time Warner’s CEO also recently hinted that the company is considering selling online content that it currently offers for free.
Disney's plans include offering content like movies, TV shows and games for a fee, possible at a single subscription website, Iger said (via Reuters). He also said Hulu could one day charge for its content.
Hulu is an online streaming rerun channel that launched as a collaboration between News Corp. and NBC Universal. In March, and with help from a growing middle-aged audience, it cracked the top three online sites, knocking Yahoo down a peg.
Disney purchased a stake in Hulu earlier this year, but its executive team is not the first to contemplate anchoring it to a subscription model. In June, News Corp. CDO Jonathan Miller suggested select shows and films on Hulu may be restricted to paying users.
Even as media companies experiment with paid models, research in the UK reveals consumers want more free media, not less. According to a study conducted by The7Stars, over a quarter of consumers plan to reduce or cancel their satellite or cable TV subscriptions, up from 15% just six months ago. 46% plan to stop buying their current newspaper if the price increases.
"There is a huge debate over whether consumers should be paying for media and newspapers," said Jenny Biggam, founding partner at The7Stars. "In the last five to 10 years, consumers have become more motivated towards free media."
