The Curator’s Dilemma
[Full disclosure: I work on Abnormal Returns]
In my first post, I stated that community powered curation will yield higher conversion rates than search and aggregation because there is an increased perception of value. While this is a critical point, there is also a key architectural difference. Curators do not crawl and index the web.
The dominant publisher business model is a version of freemium. Generally, publishers will give away some type of free content in order to coerce a user to become a paying customer. This comprises, but is not limited to: content summaries, free articles coupled with a premium service, and metered access. It is important to note in some cases users will pay for an experience as opposed to content itself. While some of these models have better conversion rates than others, they all fair poorly when converting search traffic.
Search engines index the web and rank data. Because an entire site is captured, free and premium articles are mixed within search results. To comply with fair use laws, search engines display the title of the article and first sentence or two. If a premium article is not clearly marked, a user will be unable to distinguish free from paid. Clicking through to a premium article leads to high bounce rates. Users perceive the news market is saturated to the point where a competing article can be found free of cost. Although bounce rates are high, search can exist without free content.
The curator’s dilemma states that curators have an obligation to highlight, in their opinion, the most interesting content from every source. Similar to the prisoners dilemma, the most rational choice results in an inferior outcome for all stakeholders. In order to deliver the best user experience, highlighted content must be available free of charge, in turn, limiting the amount of sources available to a curator.
Publishers who put up pay walls are effectively opting out of curation. It is difficult to imagine curation having a significant impact on the advertising business. This is because it will never drive the same volume of traffic as search. However, publishers might be losing access to a sophisticated community that is more likely to pay for content than a user who arrives via search.
Unlike search, curation can’t exist without free content. Curation needs to deliver as much value to publishers as it does to end users. That means driving traffic with higher conversion rates. To succeed, curators will need to work with pay walled publishers to deliver maximum value to all stakeholders.
[Note: I am not against curators linking to premium content. In fact, I think curation can help spur micro payments. Prospective customers need some sort of validation before purchasing a single piece of content. However, it seems unreasonable to expect a user to pay for a more full subscription to access a single article.]
