Thursday, June 9, 2011

The web is less free - good!

Back in 2009 Chris Anderson, the editor of Wired, published "Free:How Today's Smartest Businesses Profit by Giving Something for Nothing". His general thesis was that the web and digitization was radically changing the dynamic of pricing, and that consumers were being so conditioned by free, that there was no choice but to embrace free as a starting point. (Malcolm Gladwell wrote a pretty savage critique back in the day which was kind of delicious in its nasty-ness). 

I met recently with people from the NYT which got me thinking about Mr Anderson's book. 

The digital world, I believe, is not becoming more free. The NYT in erecting its pay-wall joins the WSJ, FT and Times of London, in becoming non-free. If these experiments continue to be positive, expect more and more journalism brands to follow these leaders. 

Looking broadly across the web, you can see brands with significant digital footprints such as Netflix, Ning and Apple, all making a ton of money by charging upfront for it. Netflix is 100% paid, Ning flipped to a paid model a year ago (and has more than doubled its customers), and Apple charges top dollar for everything. Even Google, a bastion of free, has been experimenting with charging for content, such as movies on YouTube.

What really seems to matter then? Well, another old maxim applies perhaps: content is king! For all the billions of videos on YouTube, how many do people really want to watch? HBO, Pixar, Random House, the WSJ, these brands provide content worth paying for and they are reaping the rewards. How you migrate customers from free to paid is tough, but clearly not implausible or impossible.

Brands will continue to experiment with pricing, offering free samples and the like, but as the web/digital has become pervasive, perhaps business as normal might become more normal. The world has changed, but we humans are still who we are. A new normal would be nice. In this view, good cotent offering good value will sell. In fact, brands will have even more ways to sell their output than ever before.


p.s. Is it ironic that the digital version of the book Free costs $9.99?

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