Wednesday, July 22, 2009

Is Free Content Sustainable?

Tens of millions of people are taking advantage of free content. The proliferation of the digital universe is making advertising cheaper and providing a range of free information, products and services. Just this morning my inbox yielded offers for free articles, mobile applications, e-books, and a website promotion.

However, free content is not always heralded as a good thing. As has been widely reported many online publishers and journalists are questioning the merits of free content.

The availability of free online content is killing the traditional print media industry and while they are being demonetized they are struggling to find the right balance between free and paid content.

According to Tony Silber, "all the Web ‘visionaries' who say content needs to be free are wrong. It's clear that the business model of charging for your print product and posting all your content online for free makes no sense. It won't sustain. Every journalist should be concerned...But the more I think about it, the more I conclude the Web sites that rely for their traffic on the reporting of others are parasites. They rely on a host body for sustenance and, in doing so, they harm the host. To the point, as in the case of the newspaper industry, that the host dies."

Although I rue the loss of investigative journalism and foreign correspondents, I cannot rue the death of a medium that is as tremendously wasteful as print media. Mr Silber does not seem to acknowledge that free content is here to stay, nor does he understand that parasites do not usually harm let alone kill thier hosts.

We would do well to remember that a truly sustainable business relationship is symbiotic. However to be sustainable a business must also be profitable. This leads venture capitalist and others to ask a valid question, "where's the money?"

With the rise of free content many businesses are struggling to find ways to monetize online offerings. Although Socially responsible endeavours have value in themselves, free content cultivates dedicated readers that often affords unanticipated opportunities.

Online marketers are still grappling with the fact that profits are not only supported by purchasing portals. While there is a wide assortment of revenue based advertising, broader brand building initiatives are often overlooked. At present free content may be a loss leader but it builds brands in ways that traditional online marketing often neglects.

With the proliferation of social media, marketers are beginning to understand that readers value content more than ads. Sharing free content with interested readers may not provide an immediate quantifiable return, but such efforts raise awareness about your industry and are powerful and credible brand builders.

Maybe we should not be so quick to criticize free content. Those who provide free content pay with their time and the return is the kind of brand integrity that cannot be bought. Although it is not easy to calculate the ROI on free content, there is as yet unmined value in the millions of people seeking it.

The choice is not between free and paid content, it is likely that we will continue to see a combination of free content that will include optional paid opt-ins. This business model focuses on upselling a small percentage of readers.

Given the number of companies having difficulty trying to transpose old revenue models onto the Web, perhaps it is time to consider new paradigms.

Presently there are several ways to monetize free content, but no one can predict the precise configuration of tomorrow's revenue models. Although many businesses have yet to find the right balance, building an audience with free content is a good position from which to explore the options.

Related Articles:
Print Newspapers and the Growth of Digital Marketing
The New Normal and Sustainability
Social Media and Sustainability
Digital Marketing for the Young and Not so Young
Digital Marketing Will Thrive in a Downturn
Digital Marketing: Making the Most of Your Marketing in a Downturn
The Growth of Digital Marketing
The Green Market's Series on Mobile Marketing

1 comment:

Jaszy said...

Very interesting Richard! We are in the process of reviewing the book, "Free - The Future of a Radical Price" by Chris Anderson which speaks to much the same ideas that you wrote about.

I look forward to reading more of your articles!

Thank you,
Modern Hippie Mag