Sunday, September 23, 2007

Is content truly free now?

Publishing 2.0's Scott Karp has a brilliant analysis of the concept of "free" content that stands most of the conventional wisdom on its ear. His argument--and I'd have to say that it's ringing pretty true with me--is that of course content isn't free: we pay for internet access, we pay for computers, etc. The problem is that by and large we won't pay twice, once for distribution and once for content. You only pay once to have a magazine brought to your door, not a second time to open it--why would we expect something different from the Internet? Of course in the digital age, you're paying someone else for distribution. And therein lies the problem.
Everyone is thinking about the shift in the economics of content in terms of paying for content, but what publishers are really facing is a shift in the economics of distribution. We’re still paying for a bundle of information to be delivered to our homes — it’s just that now that bundle is traveling via fiber optic cable rather than newsprint.


Paul M. Davis said...

Absolutely. This also underscores why people feel fine downloading music from the Internet for free. Internet access is viewed as the subscription by people--it's no different in folks' minds than paying a flat fee for cable or a newspaper or magazine subscription, in which the content is paid for. This may not be seemingly correct according to the rules of the marketplace, but I think it handily explains why people don't have an overriding sense of guilt about now repaying for content they've already paid for, seeing that they consider Internet access equatable to the Cable TV model.

Sinker said...

Right, so the question is then can the HBO or Showtime model be replicated?

Paul M. Davis said...

It seems to work if their is a demand for content that requires specific expertise, such as market research, economic analysis and minute analysis of sports stats. I think it can work if an online publication speaks well to a very defined niche (Herbivore comes to mind.)

I think if there comes a demand for premium content--ie, people get bored with unprofessional audio/video content--the HBO or Showtime model could be replicated, but that's still a way off. Professionally produced TV is far too ubiquitous for people to get jazzed about paying for, say, New York Times' a/v content. I can't see the general user paying for "premium" text content if it doesn't affect their business bottom line, sadly, or their sports betting pool.

I think a shift towards realizing that you have to pay for premium a/v content online will happen, though. Podcasting is an interesting litmus test--by most accounts, the outlets who've benefited the most from exposure via podcasts are old-media outlets primarily, such as NPR, and for magazines such as Forbes and the Economist. That content costs a lot to produce and a lot in bandwidth, and as more and more podcasts are dropped because they're not adding up to the bottom line, I think many users who enjoy the convenience of having a radio show delivered via a feed will be willing to pony up a small subscription fee to do it. We'll see, but I think the way podcasting goes will demonstrate how other premium content will go.