David Evans asks: Can we unwind the free business model?
He says in an insightful blog post:
We’re currently moving through a period of disequilibrium. The prevailing price structures and ways of doing things are unlikely to be viable in the long term. As more eyeballs move to internet connected devices, the supply of advertising inventory is going to grow explosively and it is going to become cheaper and cheaper for advertisers to reach massive audiences or just the right audiences. But as advertising fees decline, web publishers are going to have to find other revenue streams to survive. When we come out of this period of disequilibrium, my guess is we’ll end up in a mixed world where there is still free content supported by advertising, there’s much paid content, but the content creates enough value that people are willing to pay for it. Content will evolve and improve. Face it, a lot of free content is crap because it doesn’t have to be very good to get people to consume it just for enduring some advertising.
Pricing and business models can and do change with the times. The commercial web is only about 14 years old and advertising-supported web content really only took off, along with what we now call Web 2.0, five years ago. We’ll see lots of adjustments in the coming years as all this gets sorted out.
I agree to the overall principle but think that the advertising alone is not enough. People are paying for the same content when it is consumed on devices or in another format
The Amazon kindle is already making traction and we see that the traditional media will lose out unless it evolves ITV misses out on Susan Boyle fame
The caveat is: prices may be lower in the digital world – and that means the traditional media will suffer due to it’s large overheads i.e. content will be paid for but at a lower pricepoint . That’s partly why ebooks never took off since many tried to charge the same cost for the ebook as they do for the print version(which is silly) but only now is the ebook market taking off driven by Kindle and Sony book readers(devices) but at lower pricepoints
Thus, in my view, in the Recession devices may be an avenue chosen by content creators since devices (when they sell content at lower pricepoints) will act as a de-facto micropayment system.