by Mike Masnick

The End Of Free Content Online?

from the not-this-again dept

Well, now the NY Times is wondering if online publishers are moving towards a subscription model instead of the (mostly) free model. The problem with this discussion is that every single time a reporter writes about it, they never step back to look at the basic economics involved in information. Since the marginal cost of reproducing information approaches zero. In a competitive market, that information will be priced at zero. That's how things work. Companies that are trying to offer information that can be found elsewhere, will have to be priced at zero unless they can somehow convince people that their information is somehow better (and worth more). If the information is specialized, and not easily copied, then there may be opportunities to charge - though, you still have to convince people that it's worth paying for. In general, I think there are plenty of business models surrounding free content - where you use the free content to sell something that doesn't have a marginal cost of nothing. The problem is that people don't seem to realize that free content is promotional material for other services.

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  • identicon
    dorpus, 9 Dec 2002 @ 2:52pm

    Works both ways

    If the cost of information approaches zero, then there is also less economic incentive to gather it. This leads to sea of useless, low-quality information.

    There is still a need for professionally gathered and analyzed, high-quality information.

    If people don't like paying a dollar for every news article they read, maybe we could have online country clubs where a flat $5,000/yr fee gives access to a variety of high-quality news, game servers, chat rooms, etc.

    reply to this | link to this | view in chronology ]

    • icon
      Mike (profile), 9 Dec 2002 @ 3:24pm

      Re: Works both ways

      I'm not saying there isn't a need for professionally gathered and analyzed, high quality information. That's what my entire business is based on.

      I'm just saying that a model where people pay a dollar for every news article they read is unlikely to work because of basic economics. Even though information has "little economic incentive to gather it" people still do - they do it for other reasons than direct compensation. They do it for fun, or for non-direct economic compensation. I put Techdirt's main blog online for free - no advertising, no tipjar, no subscription fees, because it's valuable to us as a way to promote Techdirt's business side.

      reply to this | link to this | view in chronology ]

      • identicon
        lorenzo, 9 Dec 2002 @ 3:44pm

        i make it work another way

        I like those sites where all content comes free because they build enough buzz and visibility to licence it to TV and other rich (in the sense of money rich) media. (too bad icebox went bankrupt)

        It s like going to Uni, it s a great place because you learn a lot, yes, but also you have a lot of fun, that fun is paid for by your parents but once you re out of it you re useful to society and everyone is better off

        Let s make internet syndication a feasible proposition and have newpapers pay webloggers, TV pay indie filmmakers and the CIA buy out disinfo sites

        reply to this | link to this | view in chronology ]

        • identicon
          dorpus, 9 Dec 2002 @ 3:52pm

          Re: i make it work another way

          I don't know, that sounds like a welfare state mentality. Old media cannot magically make money if the net intrudes upon their turf.

          I wonder if a paradigm shift will occur in another, as-yet-unmentioned way -- instead of old media concentrating their resources on making easily-copied movies or TV shows, maybe they'll start making better ads. Some countries like France or Italy concentrate their media resources on making ads that are really funny and entertaining.

          reply to this | link to this | view in chronology ]

          • identicon
            lorenzo, 10 Dec 2002 @ 12:40am

            Re: i make it work another way

            yeas but, for example, latest Telecom Italia ad for broadband connection is ...guess what ?

            Ifilm top ranking short, the plane landing over the highway with the old lady sticking the middle finger

            and 2 networks out of 3 in Italy now have a "short" segments where they show precisely those shorts that have been going around the web for years.

            If you are a freelance producer, the web is for sure the best way to get you work promoted with your customers and, for most content, the fact that something is on the web doesn t make less attractive to TVs or newpapers.

            There s no bloody convergence, reading a newspaper is not like reading news on the web, and I still enjoy very much reading on tomorrow newspaper all today s news seen on the web.

            When it comes to rich media, TV is able to make any audio or video look better, I d love to see on Tv many things senn on the web.

            It is an efficient way to distribute your copyright making it available on the web for free, at least if you target B2B distribution of time sensitive content (precisely what the web is loved for). It is free content apparently, it is actually paid for already in a content-for-visibility swap

            reply to this | link to this | view in chronology ]

            • identicon
              lorenzo, 10 Dec 2002 @ 1:35am

              an example about weblog and journalism

              consider a newspaper like the nytimes, made by staff writers, correspendents and free-lancers' contribution.

              Imagine a world where weblogging and syndication has spread so much that, for example, all correspondents for the nytime will choose to work on a free-lancer basis and publish first things on their weblogs, because so they could re-distribute instantly to other countries, or second copies to the same country, and still make it freely available to the web.

              this way of sourcing content could probably cover as much as of 70% of a newspaper content without it losing identity.

              If you take the time to look for the unedited NYtimes content, you could still have it for free on your desktop, otherwise you could swap search costs with a legitimate subscription which make it easier.

              In the end the web does not lose content, the content provider is probably better off because can make more of its copyright, and the nytimes can lock up its sites without impoverishing the www.

              that would make weblogs a revolution for journalism.

              Unlikely ?

              reply to this | link to this | view in chronology ]

          • identicon
            nhs, 10 Dec 2002 @ 9:07am

            Re: i make it work another way

            A welfare state is a good thing.

            reply to this | link to this | view in chronology ]

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