Posts Tagged ‘free’

  • What IS the future of free?

    Yesterday I went to the RSA to watch Wired editor-in-chief and author of the Long Tail, Chris Anderson, speak about the issue visited in his latest book, ‘Free: The Future of a Radical Price’. He started off by covering the history of free through the ages: from Jello who used to give away free recipe books to drive demand in the early 1900s (a pioneering marketing tactic at the time), to Microsoft BizSpark’s model in the current decade where start-ups that are less than 3 years old and have a revenue of less than $100 million can access it free, but others have to pay. 

    He also presented Alan Murray (executive editor of the Wall Street Journal)’s 5 tips on charging for content, something that we often discuss at Made By Many, and that will be useful to everyone who has thought of the micro-payment system. Murray’s tips are:

    1. The best model is a mix of paid and free content.

    2. You can’t charge for exclusives that will just be repeated elsewhere: A timely example was the news of Michael Jackson’s death as reported by TMZ – if they had restricted access to that content, everyone else who reported it on their (free to access) blogs or sites would have got all the traffic and traffic-supported ad revenue.

    3. Don’t charge for the most popular content on your site. 

    4. Content behind a pay wall should appeal to niches. 

    5. The narrower the niche, perhaps the better. 

    You can read Murray’s thoughts in detail here. 

    In Anderson’s words, the best model is not paid vs. free but ad-driven free vs. ‘freemium‘. 

    The newspaper industry had to be touched upon, of course. In fact, Malcolm Gladwell has focussed on this aspect of the book in his review of it in the New Yorker. Anderson mentioned during the talk that he responded to Gladwell on his blog, and said that he felt that as far as journalism was concerned, the world has changed from traditional journalists being the authors of most forms of (paid) news in the past, to anyone becoming in author in today’s times and publishing their content for free, thanks to the web. So his solution is ‘to scale the economics of media down to the hyperlocal level’ – get people who are have alternate day jobs to contribute in return for non-monetary gains. Specifically, he was speaking with regard to his experience with GeekDad, a community that he runs. Now this is unlikely to be the salvation of the newspaper industry but ad-driven free vs. freemium is the model that remained with me as most likely to succeed. Co-incidentally, in response to a question from the audience following the talk, Anderson said that he did not think that micro-payments as a system would necessarily work because it was a question of the psychological vs. the monetary downsides of paying for a news article (’what the hell, I have to pay, can I be bothered’) - so personally though I wouldn’t mind paying £1 for a good piece (and with a proper audience that can multiply to very profitable heights – YouTube was an example someone from the audience quoted – 75 billion videos x (hypothetically) even 2p would be a decent sum of money), it’s a question of whether psychologically you think the benefit is worth the money, and that’s not always easy to gauge. 

    A few thought-provoking ideas I left with:

    1. Joseph Bertrand (1883) said that in a competitive market, price falls to the marginal cost. Is free anti-competitive, because it sets the default price to zero?

    2. Anderson’s book is also being released as an audio-book in 3 hour and 6 hour formats. They are going to charge for the 3 hour format but not the 6, because in his words, ‘time is money’. So at what point does a piece of content become valuable enough to pay for so you don’t waste your (probably more important) time?

    Here’s the presentation: it’s the same one he gave at the Wired business conference in New York 2 weeks ago.

    Chris Anderson speech on Free
    View more documents from zlite.

    1 Comment

    1
    Anjali Ramachandran By Anjali Ramachandran

    1st July 09

    1 comment

     Conferences

  • The Micropayments Are Coming

    I’ve been meaning to write a response to William’s blog post of a few weeks ago about the news that some publishers (including Rupert Murdoch) are preparing to start charging for some of their content. I agree with William that people will be unlikely to buy a subscription to, for example, The Sun or Times Online but I’m not sure that is what is being proposed.

    As William says in his blog post:

    I don’t buy my internet news in a newspaper, I pick it out from a broad and fast-moving stream of fragments and favourites and recommendations garnered from twitter, blogs, feeds and aggregators and it’s all free. I might want one little piece of the Guardian one day, two little pieces of the Times the next, I don’t want either all the time so why should I buy 12 month’s worth?

    That’s how I consume content as well – piece by piece, fragments from a large number of websites. This, it seems to me, is the key issue: people don’t mind paying tiny amounts of cash for little pieces of content, it’s just that there isn’t an easy-to-use, trusted third party system like that in place for news content.

    There are in music and movies. iTunes and NetFlix, and LoveFilm in the UK, all provide users with the ability use a single system to buy movies and music (and games and apps) from many different publishers. Xbox users can use NetFlix on a subscription basis, and last week Virgin and Universal made the announcement that they are launching an eat-as-much-as-you-like service for MP3s.

    So, there are models out there that seem to work, or look extremely promising, and it’s clear that people will pay for certain types of content if you make the experience seamless and brainlessly easy.

    Now, it appears that similar services may exist for newspaper and magazine publishers. Journalism Online are launching a service will provide users with a password-protected website where they can buy subscriptions that work across multiple sites, and individual articles from many publishers. The Publisher has some control over setting the price and  Journalism Online will add value by negotiating licensing and royalty fees with intermediaries provide insight data that will help publishers optimise circulation revenue and maintain traffic to support advertising revenue.

    That sounds pretty interesting.

    Just to be clear, I think it would be madness for newspapers to try and put everything back behind a pay wall. The most likely model to emerge is a hybrid one where I continue to enjoy a lot of free content and the conversations that exist around that content, but when I want to go deeper or consume richer content then *sometimes* I should expect to pay a small amount for it.

    After years of getting it for free on the Web, it won’t be easy for publishers to start charging for even some of their content but there may be no choice. Personally, I am willing to pay a small amount to make sure that I am properly informed, and although I think citizen media is often quicker than traditional media I still want to live in a world where there are professional – and accountable – news organisations. I know this is not a view that everyone will subscribe to, but it’s not clear how else news media in particular will be able to remain in business.

    The answer is almost certainly a bit of everything:

    • Ecommerce – newspapers and magazines already sell directly to their readers, but could do a lot more of this, including providing more paid-for online services. The role of online community in this is obvious
    • Micropayments and subscription – along the lines envisaged by Journalism Online
    • Advertising and sponsorship – an important but smaller part of the mix

    Anyway – these are my half-formed thoughts. I’m willing to be persuaded either way. I’ve also heard that the new iPhone SDK makes it easy for developers to build micropayments into the apps they make. Not sure if this is true but does this hold out the tantalising possibility that the iPhone and iTunes could be the digital wallet we’re all waiting for? I already find it a bit too easy to spend money on iTunes!

    4 Comments

    4
    Tim Malbon By Tim Malbon

    22nd June 09

    4 comments

     Made by Many

    Social Web

  • And here’s something else “they” will struggle to understand…

    “But why do people do it? I just don’t get it…”

    How many times have you heard people ask that question when they discover that you work in something to do with blogging, Twitter and Facebook?

    They start to struggle when you tell them most people don’t do it for money. That makes them very suspicious. Not for money? Must be something really suspect then – possibly perverted. Perhaps you’ll end up using *that word*: “altruism”. That’ll get them smirking nervously. Altruism. Oh yeah.

    Try them on the term “culture of generosity” and you’ll probably get personally abused, as if the very idea of human acts of online kindness between “strangers” marks you out as some sort of deranged and – quite frankly – dangerous fantasist with a weakness of character.

    Some of the coverage of Twitter over the past fortnight has been lamentably stupid. Elin’s post provides some hilarous examples. The come-latelies don’t understand the culture of generosity. It’s that feeling I get when I read the Mail: it’s-all-going-to-hell-in-a-handcart, glass-half-empty pessimism. People who just can’t bring themselves to feel good about other people. I honestly don’t know why.

    We should round these cynics up and bus them into London tomorrow night to watch ‘Us Now‘ – a new British documentary film the ways people are using the Web to support each other in non-commercial  activities across the political, social and cultural spectrum. The film covers a range of subjects: the site couchsurfers.com runs a system of free accommodation for travellers; slicethepie.com connects music-lovers to the demos of hopeful musicians, where they take their pick and pledge a fiver towards the making and marketing of that band’s CD, and of online fan-owned and managed football club Ebbsfleet United. The film’s on tomorrow night at 8.30pm at the Barbican.

    BTW I found out about this film through Twitter again (thanks to @leebryant) who provided a shortened link this morning to an article in the FT.com. If there are any nay-sayers reading this, that’s another great example of Twitter saving me time: I follow a network of people posting links to the things I’m interested in… it’s easier than searching.

    3 Comments

    3
    Tim Malbon By Tim Malbon

    24th February 09

    3 comments

     Made by Many

    Social Web

Our latest tweets

Categories

Archives

Find us on the web