Don't Tell American Idol You Can't Make Money From Free Content

from the see-free,-disengage-brain dept

As Mike recently pointed out, he gets a little annoyed when people say “free is not a business model.” As he points out, free is really just part of the business model, and the challenge is in using free as part of the business model, and he’s compiled example after example after example of people doing exactly this. Now add American Idol to this list. Building on its free content — the TV show — its producers have teamed up with the company that makes the popular teen virtual world Habbo to create an Idol-themed one. Habbo has built a solid business upon its virtual world by selling virtual goods to teenagers. The new American Idol world will be tied to the show and feature new activities and virtual goods as the show progresses, and will also feature tie-ins from Idol’s sponsors. The main content is given away for free, and used to successfully generate further advertising revenues and create interest in secondary, paid products — like this virtual world, but also the popular American Idol concert tours and other offerings. So why doesn’t anybody blast American Idol’s producers for giving their content away for free?

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Comments on “Don't Tell American Idol You Can't Make Money From Free Content”

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Fentex says:

But it isn't free

I don’t live in the U.S so I may be mistaken here but is not American Idol shown either on advertising supported broadcast or a cable network? Neither of which are free – one you pay for by the portions consisting of ads and the other by payment of a cable bill.

Actual free would be something like the show being tossed out to the world as unprotected torrents. But torrents of the TV show remain copyright breaches, do they not?

hegemon13 says:

Re: But it isn't free

You’re right, in a sense. The show does make money off of advertising. However, the show itself is free to the viewer. The advertising space is a complimentary good that they can sell by broadcasting the show to the viewers for free. This is a perfect example of what Techdirt means when they say they’re sick of hearing that “free is not a business model.” No, free is PART of a business model, just like this one. Having free as part of the model does not mean you can’t make money. If you do it right, you should make MORE money, as we can clearly see with American Idol.

Jack Sombra says:

“Now add American Idol to this list. Building on its free content — the TV show “
As Fentex said, the show is not free, networks/TV stations pay for it, they recoop the costs from advertisers who pay to market their own goods, while viewers pay by having to suffer though Ad’s, that generally these days take up about 20% of their viewing time

Monarch says:

Re: Re:

If you are not paying anything to watch the show, it’s free. Commercials are content too, so you’re getting them for free also. So you are watching the episode for free.

It doesn’t matter who is paying for the show, as nothing manufactured in life is completely free to everyone. Someone always needs to pay to have a product manufactured. The issue is, is the targeted consumer having to pay also, or is that targeted consumer getting it for free?

Plus, as an earlier post was referring. Not only does American Idol give away the main product for free to the targeted consumer, but they have a built in Micro-Payment system. The targeted consumer can actively participate in the show for a minimal micro-payment of a text message vote. So the producers of American Idol know how to get a portion of the targeted consumer to pay for part of the show via voluntary micro-payment also.

Now, on top of that, they are getting others in their targeted consumers to pay for other amenities of the show. These guys have some intelligent marketing people.

anonymous coward says:

What do you mean, free?

I don’t understand your statement that American Idol is free content. Fox pays the producers of American Idol HUGE amounts for the necessary copyright licenses to broadcast the show. Advertisers, in turn, pay Fox HUGE amounts for the rights to advertise on the show. The fact that consumers aren’t paying to view it doesn’t mean that it either the producers or Fox are giving it away for free.

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