Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
I distinctly remember learning how to read, and it wasn’t from a book or in a kindergarten classroom.
It was sitting at the breakfast table with my Dad every morning, when we would read the weather section of the Washington Post. We checked to see if it was hot in Arizona (it usually was) and cold in Canada (it always was). For this reason I’ve always felt an affection for the DC-area newspaper, and I continue to read some of its blogs and politics coverage to this day. But when the newspaper rolls out a paywall this summer, it’s doubtful I’ll start paying for access. I can still log in using my parents’ subscription, but if they stop paying? I might owe that newspaper my literacy, but with the rest of the internet at my fingertips, it’s still not enough to get me to pay.
There was an excellent post on Buzzfeed earlier this week about HBO Go passwords, in which John Herrman surveyed everyone in his office and asked how most of them access HBO, a content provider that only gives digital access to cable subscribers. The responses evoked a trend I see among my own 20-something friends, which is that hardly anyone actually subscribes to HBO.
The anecdote struck me as one that perfectly illustrates how much of my generation is building habits around digital content and what exactly we’re willing to pay for. We’ve grown up with a wealth of news and video available for free on the internet, and for many of us, we also have access to high-quality content through parents or friends with subscriptions to services like Netflix (s nflx) or the New York Times (s nyt). We built media habits around this content from an early age, but we were never forced to actually pay for content.
And there are a lot of us. Will those companies be able to convince my generation that their content is special or unique — and that one day, we should pay for it ourselves?
Content for free, at our fingertips
I’m 22, and I took typing lessons in fourth grade, had computer classes on how to do Google searches and make Powerpoints in middle school, and joined Facebook when it launched in my early days of high school. Until I left for college, my family’s desktop computer was set to open to the New York Times homepage. (At the time, it was free for everyone.) My peers and I learned how to write research papers in high school by citing sources online and by not copying things from Wikipedia, and most of us read Hamlet with the assistance of Sparknotes.com. We discovered music on YouTube, and a few lucky kids got smartphones in high school, which were ubiquitous by the time we hit college.
My generation has grown up connected to the internet, and we’ve never been at a loss for finding news and information on the web — for free.
Families have been sharing physical newspapers and televisions for years, of course, but when my parents’ generation left home for college and then grad school or jobs, they had to call up their local newspaper or cable or phone providers if they wanted any of these services. Now, there’s less incentive than ever to leave Mom and Dad’s family cell phone plan, and it seems that for many of my peers, the same applies to digital subscriptions to newspapers, magazines, and cable subscriptions.
Out of curiosity, I asked about 15 of my friends (most of whom are recent college graduates in varying levels of employment) what content they personally pay to consume. The answer from most of them — minus a few New Yorker-subscriber outliers — was not much. But when I asked everyone what they read or watch using a parent’s (or a friend’s parent’s) subscriptions, the answers went way up. Almost everyone had access to Netflix, and a good number read the news on paywalled websites like the New York Times, and soon, The Washington Post.
But when I asked if anyone would pay for this content themselves if their parents stopped paying, hardly anyone said they would. The only media that most people said they would pay for was Netflix, and a few said they would subscribe to avoid paywalls on their local newspapers.
My friends of course aren’t representative of the population at large, but as mainly upper-middle class college graduates, they’re the demographic combination that’s currently most likely to pay for news online, according to a 2010 Pew study. While most of my friends said they read the news and watch video on a regular basis through their parents’ subscriptions, most said if they lost free access, they’d probably go somewhere else rather than pay. That might not be to a place that offers the same quality, but at least it would be free.
As one friend told me, “If it’s online, it feels like it should be free.”
Finding solutions to get us to pay — one day
Now, it’s not necessarily surprising that 22-year olds aren’t clamoring for financial advice on retirement from the Wall Street Journal or picking up the tab on multiple subscriptions when the youth unemployment rate remains at 13.1 percent. Many people don’t have parents who subscribe to anything, and are perfectly content with the free content on the web and videos on YouTube. And for those who do, mooching a Netflix subscription still pales in comparison to the cost of cell phone plans 20-something share with families. Plus, my age group has always made up a fairly low percentage of newspaper readers anyway. Presumably the value we place on news will rise when we have kids and own houses and spend a few more years paying taxes.
It’s also possible that we’ll have to look beyond just newspapers and magazines to find media services for which my generation will pay. While I personally pay for a variety of news subscriptions, Twitter remains my most valuable source of information and I would probably pay more for access to that feed than anything else. Instagram might not be the future of news and information, but it’s fair to say a lot of people would probably pay for that.
HBO has clearly decided that letting us mooch off subscriptions to access Girls is worth it, since one day some of us will grow up, get jobs, and subscribe. But hoping and praying, while perhaps the defining media business strategy of this age, is not a particularly compelling long-term bet. Perhaps it should consider low-cost subscriptions meant for recent graduates, that would get us used to paying something but at rates more in line with our typical income levels. Maybe it means creating or structuring content specifically for younger readers and their digital tastes, or adopting micro-payments that remind us more of purchasing an iTunes song than a year-long subscription.
But even if the content providers move in this direction, will my generation ever pay for quality media? We have grown up with the world at our fingertips on the web, mainly for free. And we’re taking those habits and assumptions with us into adulthood.