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Rules for media companies trying to figure out how to make money online:
Wired editor-in chief-Chris Anderson, author of "how the Internet makes everything free" articulated something that is now increasingly becoming obvious: As products go digital, their marginal cost goes to zero.
He draws a number of conclusions from what the Wall Street Journal is doing. Anderson comes up with the following rules for media companies trying to figure out how to make money online:
1. The best model is a mix of free and paid
2. You can?t charge for an exclusive that will be repeated elsewhere,
3. Don?t charge for the most popular content on your site,
4. Content behind a pay wall should appeal to niches, the narrower the niche the better
It means media sites that want to charge for content should charge for their niche stuff instead of their most popular content. But that is exactly the right way to look at it if you want to maximize your advertising revenues. Let the popular content be paid for by advertising, and the niche, exclusive content can be sold to fewer peopel at a higher price.
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