In Going Free, London Evening Standard Doubles Circulation While Slashing Costs

from the but-free-doesn't-work!! dept

In October, we wrote about how, just as Rupert Murdoch and crew look to put up paywalls for online content, the operators of the London Evening Standard were going in the other direction and making their physical paper free. So, how's that been working out? mowgs alerts us to the news that the paper has doubled its circulation in just a month. Not bad. But what's more interesting is that it's also slashed its distribution costs massively. It used to cost about 30p, and now it's just 4p per paper.

This actually brings up a point that's rarely talked about in the free vs. paid debate. Charging can be expensive. It takes quite a bit of effort to charge, to take money, to manage the money, to set up the accounting and bureaucracy for managing each transaction. And, even worse, if you're working with third party distributors, like news agents, then you have to handle financial relationships with them as well. Getting rid of the per paper price changes the economics not just on the revenue side, but on the cost side as well -- something that's rarely discussed at all. And, yes, this impacts online news orgs too. Putting up a paywall is going to prove a lot more expensive than most people think on the cost side.

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Nasty Old People, Give It Away And Pray And Releasing Movies For File Sharing

from the another-one dept

We were just talking about some indie filmmakers who were happy with the extra attention they've been getting from having their movie "leaked" on BitTorrent, and ChurchHatesTucker alerts us to another story of filmmakers embracing file sharing. This one is actually from a few weeks ago, but a Swedish filmmaker made a low budget indie film called Nasty Old People and released it under a Creative Commons license, along with a request for donations. The link is to Metafilter where there's an interesting discussion about whether or not the experiment is a "success" or a "failure." It's a bit of a mixed bag, as at the time of the discussion, the filmmaker had made back 20% of the film's budget and there were questions if it would get much higher. Thus, it was easy for some to quickly call it a clear failure.

Of course, it's not really that simple. First, I've said for years that I'm no fan of "give it away and pray" business models, which really aren't business models at all. While it works sometimes, it's pretty much a crapshoot, and never strikes me as a real business model. So, on the whole, I'm not too surprised that it didn't bring in much more than 20% of its budget in 2 weeks (though some compare it to blockbuster movies that can often make about the same % of their budgets in the early going.

However, if we compare this situation to what would have happened otherwise (i.e., if the movie were not released this way) the situation becomes a little more interesting. This was a very low budget indie film that likely would not have received any distribution at all. At best, the filmmaker perhaps could have self-printed DVDs, and would have been lucky to have sold a dozen or two. She could have tried to enter it into various film festivals, but that's quite difficult, and even then there's a pretty good chance that the movie doesn't end up actually making any money. Yet, in this case, she not only made money from donations, but the film is getting picked up and shown in theaters around the world. So, compared to that situation, things actually look better than the alternative.

On top of that, while this particular movie may have been a net loss, she could use it for marketing herself. She can go around and show the movie to others, and perhaps use that to get funding for a larger scale project or another film that's released with a bit more of a complete business model. Nasty Old People becomes marketing and a promotion for Hanna Skold. It has to be better resume filler for a filmmaker to talk about tens of thousands of people downloading and watching your film than just going in cold saying you want to make a film. And, in fact, she's already hard at work on a new film script, with many people who became fans of Nasty Old People following along and interested in seeing what the new script is like. So, as a marketing tool, it sure seems like giving this movie away has been quite useful.

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Information Should Not Be Free... Says InfoWorld Columnist That You Can Read For Free

from the just-saying dept

Doug sent over a link to an angry screed by columnist Bill Snyder that bashes anyone who thinks anything should be offered for free. Want to read it? Go ahead, because it's free at InfoWorld.

And, of course, that's the problem with Snyder's analysis. It doesn't take into account the wider business model. The reason that Snyder's article is available for free is because InfoWorld has decided that it has a better chance of monetizing that content by offering it for free and selling advertising. It's other option would be to charge people directly to read Snyder's economically confused analysis -- but then no one might pay. So which makes more sense? According to Snyder, the latter.

Snyder also takes on the scourge of free WiFi, that pretty quickly showed that paid WiFi is a niche market, only working where you have limited and captive audiences (and even it is under greater and greater competitive threats). Unfortunately, his economic analysis is misguided:

News and Wi-Fi service are commodities, just like cars, housing, and food are commodities. Labor and raw materials, as well as the capital to buy them, are the essential ingredients of most any good or service we might care to own or consume. No money, no commodity -- that's a basic economic principle that the digital revolution has done nothing to change.

Sounds good, but it's wrong. Very wrong. Yes, they're commodities, but the defining rule of a commodity is that it is priced on the marginal cost, not the fixed costs. And yet, Synder suddenly thinks that while that applies to cars, housing and food... it goes away in the digital world? The only person really claiming that the economics has changed is Snyder, in insisting that digital products do not adhere to the same laws of supply and demand.

Snyder seems positively confused that free is a part of a larger business model:

I don't write for free, my editors don't edit for free, and I'll bet your IT hands don't run networks or produce code for free.

And yet, your content is available for free. Funny how that works. Why does it work? Because it makes good business sense. But, to Snyder, when this is pointed out, he gets confused and thinks that it proves his point:

I know, I know -- some of you are going to bring up open source.

Sorry, that proves my point. Open source has grown in influence and quality in the last few years as business models in the community have evolved. Not too long ago, any open source company that dared post a paid or paid-support enterprise version of its software would be pilloried. But not any more. The recession has put many excellent technologists out of work, but there would be even fewer employed if open source companies were afraid to make a profit, then plow it back into development projects and expanded infrastructure.

Just ask the open source millionaires at MySQL if they think everything they produce should be free.

Snyder figured out the wrong thing. Yes, getting paid is important, but the question is what you get paid for, and he's asking people to charge for the parts of a business that make the most sense being free -- and doesn't explain why he gets to decide what should be free and what shouldn't. The answer, really, is that none of us decides: basic economics tells us. If you have a competitive product with no marginal cost, it's going to eventually get driven to free. Whether you like it or not. And then you shouldn't whine about the evils of "free." You should instead figure out ways to use that to your advantage.

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Free Doesn't Mean Devalued

from the more-to-life-than-money dept

The concept of zero took ages for societies to recognize, let alone understand. Mike has explained before how it's been a stumbling block in economics for some libertarian and "free market" types more recently. People who think about economics in terms of scarcity get upset when abundance pushes price down towards zero, as if the economic equation were broken. But if you flip the equation and think of it as a cost of zero, you realize that the trick is to use as much of those abundant goods as possible, adding value to complementary scarcities for which you can charge. Zero doesn't break economics, it just requires a different approach.

But artists and other creators hit a different stumbling block than libertarians (libertarian artists aside...). Zero is a problem because they feel like their art is worthless; they aren't hung up on scarcity, they're hung up on "devaluation." We've heard it from journalists. I hear it most often from fellow songwriters. The economic theory makes them feel as though their work is just viewed as some sort of cheap commodity. The thing is, value and price are not the same. Price is monetary value, but value is so much more than money. Price is what gets driven down to marginal cost, but value factors into the demand side of the equation. Expensive things aren't necessarily valuable, and valuable things aren't necessarily expensive. I value oxygen a lot, but it seems silly to pay for the air I breathe each minute, given the abundant supply.

More importantly, songwriters who get hung up on "devaluation" confuse recordings with music. They equate the two. A recording is not the song, it's just an instance of it, and a digital audio file is just an instance of the recording. Equating these reduces music to recordings to files. As important as recordings are, there's so much more to music. When you think of a song, do you think of the recording, or a memory you had connecting with the music? Do you think of the file and how much it cost, or the emotions, people and experiences that the music conjures up? The recordings are just a means through which we experience the music. Songwriters (of all people!) should know that the value in music is so much more than the price of a recording. It's not devaluing music to give it away for free, but it can increase its value by allowing more people to connect with it, to know, love and understand it -- to value it. It's through that experience that music is valued, not price!

Ironically, the underlying concern ends up being economic -- how will we make money? A price of zero for digital audio files doesn't mean that no one values the songwriting profession, or that no one is willing to spend money on music and keep songwriters in business. Sharing digital audio files makes the music more valuable and leads to more opportunities for monetization. When you give music away and connect with an audience, the opportunity for monetization is in the associated scarcities -- access, containers, community, merchandise, relationships, unique goods, the creation of new music, etc. -- by giving people a reason to buy. Getting hung up on "devaluation" is a distraction from the opportunity -- the necessity -- to experiment with new business models.

So, can we please stop complaining that free means devalued?

Blaise Alleyne is an expert at the Insight Community. To get insight and analysis from Blaise Alleyne and other experts on challenges your company faces, click here.

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Blink-182's Tom Delonge: Time To Adapt, Give Music Away For Free, Monetize Other Things

from the another-one dept

This one's from a couple months back, but I missed it at the time. Reader Amber Walker sends in this fantastic video interview with Tom Delonge of the band Blink-182 from the Guitar Center blog, where he makes many of the points that we discuss here, noting how technology has made it cheaper to make, promote and distribute music, and he thinks the big opportunity is in giving your music away for free, and recognizing that there are other things to sell, such as merchandise, but also subscriptions and other types of events.

Some quotes:

The one thing I've learned is that, like any other type of art, it evolves. So if you're a business that supports a type of art, you need to evolve with the art. Now, a lot of things have happened that have made creating art a lot easier with the computer. And it's also made the distribution of art a lot easier.... What I have chosen to believe is that if you look at your band with a modern filter, your band has so much potential to have all these different elements about it. You can create all this really cool merchandise and concert/live experiences. You can create a really cool portal on your website. You can mix all these elements together and I always believe that if the tools are available, you can monetize all these other elements, and not really worry about selling the record. In fact, I believe that, you should take down every barrier and put as much music out there for free...

In my mind, the way the music industry is changing is that music is easier to make and it's easier to give away for free. And that will enable the band and the music and the art and everything to be bigger than it's ever been. It's just how do you collect that and how do you build your business...

I think the internet's a funny thing, because anything... that cuts through the noise on the internet will get found. The beautiful thing about the Western world is that all good art will get found no matter what. It just might take a little bit more time for some than others.... To try to really make a presence known, a band needs to capitvate people online first, no matter what -- it can be with a video or a film. It can be a song or a live broadcast. It needs to be something that's really clever. To do that, you should study the campaigns that work....

Of course, he notes that at the core of this is still good music. He says that you don't remember a band years later just for the marketing, but you need that to get attention, and then you need the music to live for itself, which leads to an interesting mantra:

The true art is not just creating the music. The true art is seeing how many people that music can touch in various ways. That's the art. Because you can be as artistic as you want and no one hears it and no one likes it. The true art is trying to break through the noise and getting millions of people to notice.

Sounds quite a bit like the difference between invention and innovation that we talk about, doesn't it? Nice to see yet another artist who has this all figured out.

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Irony: U2's 'Free' Concert At The Berlin Wall, Blocked By A Big Wall

from the u2,-tear-down-that-wall dept

Dementia writes in to point out the rather ironic situation of a "free" concert put on by the band U2, at the remains of the Berlin Wall in order to celebrate the demise of the wall... but MTV decided to put up a big temporary barrier around the event so those who didn't have free tickets could not even see the event. Yes, they erected a special "wall" to block out a free concert about The Wall. As Dementia noted with the submission, "you're doing it wrong..."

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Is Google Going Better Than Free On Navigation? Will That Set Off Antitrust Alarms?

from the should-it? dept

A few friends have passed along Bill Gurley's excellent (as usual) analysis of how Google is disrupting the navigation market by ditching the two big players in the space (Tele Atlas and Navteq), going it alone and also (the big news) offering its navigation info for free. Gurley points out that the truly disruptive part is that Google is actually offering mobile operators a deal that is better than free, in that they get to share in some of the ad revenue associated with anyone using the services. The point is pretty clear: those who are relying on the old business model of getting paid for navigation info are likely in serious trouble.

Of course, there are some perception issues. Plenty of companies who have tried a "we'll pay you" approach to marketing often find that it actually breeds some level of mistrust, as partners/users start wondering why, and if there's some sort of nasty catch. Google, of course, has a pretty good reputation, and ought to be able to overcome that issue. However, it does make me wonder if this will set off the Justice Department (and Google's enemies) on some silly witchhunt, claiming that this is somehow "predatory pricing." That, of course, is ridiculous if you actually think it through. The only real problem with predatory pricing is if it's used purposely to drive others out of business to then jack up prices. But Google's idea is to just give it more opportunity to make ad revenue. It's not predatory, it's just smart from a business sense. However, with so much scrutiny on Google these days, you could certainly see this backfiring.

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Stop Overreacting: Hulu Not Ditching Free Yet

from the hold-your-horses dept

A ton of readers here have been submitting various versions of stories claiming that Hulu is getting rid of free content. I'd been ignoring the story, because it's a non-story at this point. But people keep submitting it, so let's go through the details. Basically, at a Broadcasting & Cable event, News Corp. Deputy Chairman Chase Carey basically said that free content isn't the best way to monetize and that Hulu "concurs." Here's specifically how B&C reported it:

"It's time to start getting paid for broadcast content online," he said. Carey said that while everyone cites the infamous Jeff Zucker quip that "We'e exchanging analogue dollars for digital dimes," the industry continues to do exactly that. The strategy needs to be more than just fighting piracy and Google, he says.

"I think a free model is a very difficult way to capture the value of our content. I think what we need to do is deliver that content to consumers in a way where they will appreciate the value," Carey said. "Hulu concurs with that, it needs to evolve to have a meaningful subscription model as part of its business."

AdVerse had a quick chat with Carey too and posed the question, when exactly does Hulu start charging then? Carey, who says he's only been to one Hulu board meeting since arriving at News Corp., suggests there is still no timeline but supposes it's at least in 2010. Carey says that while throwing up a pay-wall around all content is not the answer, it doesn't mean there wont be fees for some specially-created content and TV previews

So... this is really no different than what was said a few months back, when News Corp's Jon Miller started saying that Hulu should add subscription offerings. It's the official News Corp. position, ever since Rupert Murdoch suddenly flip flopped and decided free content online is evil. All News Corp. execs have now been making noise about trying to charge for content.

But... Carey is just one board member, not Hulu management, and has only been to one board meeting -- this is hardly an official announcement. He even admits that a paywall is not the answer. This isn't anything official from Hulu. So, before we freak out about how dumb this is, let's wait and see what Hulu actually does. As we've been seeing the ad rates on Hulu can be quite impressive, and the site itself is still somewhat new. So, yes, giving up on free content would be dumb, and would just drive people back to file sharing for TV shows. But until we see what Hulu is actually planning, the claim that Hulu is giving up on free content simply isn't supported by what's been said.

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WSJ Editor: Those Who Believe Content Should Be Free Are Neanderthals

from the that,-or-people-who-understand-economics dept

Danny Sullivan has an excellent analysis of some of the more ridiculous statements from WSJ managing editor, Robert Thompson, trashing pretty much everything online. Most of Sullivan's analysis focuses on how ridiculous it is for Thompson to claim that Google makes news readers "promiscuous," so I won't address that again (though, you really should read Sullivan's writeup). Instead, I wanted to focus in one little bit that Sullivan mentions, but doesn't explore too much (other than to mention how insulting it is). Thompson declares that there are "three types of people" online, starting with:

There are the net neanderthals who think everything should be free all the time.

Pretty scary that someone who's the managing editor of the most well known and well-respected business newspaper out there thinks this, huh? First off, I don't know anyone who thinks "everything should be free all the time." People are more than willing to pay for scarce goods of value. Where they fundamentally have issues is with being charged for content that can be made free at no additional cost. And that's not "neanderthal" thinking, it's good old classic economics -- the kind we thought the WSJ supported.

And, of course, this also shows Thompson fundamentally not understanding the debate. For many, many years there's been plenty of "free content" in the terms of "free to the consumer" but which is supported in other ways. As Sullivan points out, News Corp., which owns the WSJ, also owns Fox -- which delivers free content, over the air, to consumers, but supported by advertising. Is that a Neanderthal opinion?

It really makes you wonder what they're thinking over at the WSJ or what sort of business smarts they have when they both consider Google to be a problem and think that basic economics on content pricing is "Neanderthal." It should call into question their thinking on other business topics as well. And, remember, this is the same company that is lashing out at "aggregators" like Google News, at the very same time that it's offering its own aggregator as well. If Thompson thinks Google News makes people promiscuous, why does his own site offer something similar?

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The Debate Is Not Free vs. Paid

from the that's-over dept

Michael Scott points us to a column by Shelly Palmer that clearly articulates a point I've tried to make in the past, but haven't been able to make that clearly: arguing "free vs. paid" is the wrong debate. Professional content is always paid for somehow -- it's just a question of how. In some cases it's a third party paying. In some cases it's a user paying. And, in some cases, it's a user paying not with money, but with something else, like time or attention, which helps give a third party the reason to pay:

Can you frame this conversation as free vs. paid? No. Not if you are trying to get someone to pay you cash directly for something that is ubiquitously available for free. Free vs. Paid is not the great debate, it's a no-brainer -- free wins! Valueless vs Valuable, Scarce vs Ubiquitous, Demanding of attention vs Commanding of attention are the debates and the winners will be the individuals and organizations that can most effectively translate the value of content into wealth.

Exactly. This is why the focus on "free" is almost always misplaced. People stop thinking once they hit that big oval zero -- and forget that free is simply a part of a larger business model, which is often about bringing in a larger audience that gives other reasons to pay.

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Dungeons And Dragons Online Highlights How Free Can Work As A Part Of A Business Model

from the nice-job dept

Pretty much everyone who reads Techdirt seems to be sending over the story of how Turbine has changed the business model for Dungeons and Dragons Online, going away from charging people $50 for the game and then $15/month to play, to a model where you can play for free and there are additional benefits to actually paying. And, so far, it seems like a massive success. Many more people are playing than before... and many of those who would never have paid (or played!) at all are realizing that there are good reasons to pay for some things within the game. While these sorts of situations can be a fine balancing act (if the company gets too focused on trying to convince people to pay, it could make the free stuff annoying), it appears that Turbine has done a good job finding a sweet spot -- making sure that if you just want to play the game for free, you can absolutely do that and it's perfectly enjoyable all the way through. Putting money into it just gives players certain additional benefits that they feel is worth it. Suddenly, paying the company money becomes a reasonable per transaction situation, rather than an ongoing chore. While it's still early, it should be worth watching to see how well this particular business model experiment goes -- but the early indications suggest that it's yet another example of how "free" can work as a part of a business model.

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Steve Ballmer Declares 'Free Is Not A Business Model' -- Apparently Unfamiliar With Microsoft's Free Products

from the check-'em-out,-steve dept

Josh W points us to an article about Microsoft new mobile phone software that contains an odd quote from Steve Ballmer, responding to a question concerning Microsoft's plans to compete with Google's free Android mobile operating system:

"Free is not a business model," he said. "We are a commercial company, we will look to gain revenue and profit from our activities. You'll have to ask our competitors if they'll make money on free things."

Internet explorer. Bing. Microsoft's new security software. All free. All offered by Microsoft. Is Steve Ballmer admitting that he doesn't know about any of these things... or is he just expecting that the reporter and the readers of the article are flat-out stupid? Clearly, Microsoft seems to recognize that free is a part of lots of smart business models, so why is its CEO apparently acting clueless on this front? As clearly anyone who thought this through knows, free by itself is not a business model, but free, in combination with a larger business model often makes a lot of sense. That's what Google is doing, and it's what Microsoft is doing as well. So why is Steve Ballmer pretending otherwise?

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Another Author Notes That Giving Away His Book Increased Sales

from the piracy? dept

Dave points us to a recent interview with Lester Brown, who's been pushing for alternative energy for years. I'd actually heard about his book, Plan B 4.0: Mobilizing to Save Civilization a few months ago when someone pointed out that he was giving away his book for free, but I hadn't heard much more about it. Yet, in the interview, he mentions that the book can be downloaded, which appears to surprise the interviewer, who seems to assume that this means the guy is willing to give up revenue to get his ideas out there by noting "you do feel strongly about this." But then Brown points out that it's not hurting sales at all, but quite the opposite:

Dr. BROWN: No problem. Incidentally, "Plan B 4.0" is online at earthpolicy.org. It can be downloaded free of charge.

FLATOW: No kidding.

Dr. BROWN: Yeah.

FLATOW: Wow. You do feel strongly about this.

Dr. BROWN: Yeah. And it's interesting, people think this must reduce sales. In fact, it increases sales.

(Soundbite of laughter)

Dr. BROWN: Just between the two of us

Of course, this is hardly the first author to recognize this, but add another one to the pile. It's about recognizing that obscurity is a bigger risk that piracy, and then figuring out how to get more attention and then giving people a real reason to buy on top of that attention.

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Edwyn Collins Can't Give Away His Music Thanks To MySpace, Warner Music

from the thanks-guys dept

Mesanna alerts us to a blog post from the wife/manager of pop singer Edwyn Collins discussing the hellish experience she's gone through trying to offer up Collins' most famous song, A Girl Like You, on MySpace. Collins owns the copyright and wants the music to be freely downloadable by anyone, but Warner Music claimed that it owns the copyright, even though it does not:

At the beginning of this year I noticed that Edwyn's myspace had gone bit wonky and I tried to upload the tracks back on to the music player. His most famous track, which he owns the copyright in, as he does for most of the music he's recorded in his life (preferring to go it alone than have his music trapped "in perpetuity" to use the contract language of the major record company) is called A Girl Like You. It's quite famous. Lo and behold, it would not upload, I was told Edwyn was attempting to breach a copyright and he was sent to the Orwellian myspace copyright re-education page. Quite chilling, actually. I naturally blew my stack and wrote to myspace on his behalf demanding to know who the hell was claiming copyright of Edwyn's track? Which, incidentally, he always made freely available for download on myspace, something which amazed his followers. Eventually, after HUGE difficulty, I was told Warner Music Group were claiming it. I found a nice lawyer guy at Warners, very apologetic, promised to get it sorted, but all these months later it isn't. That is because Myspace are not equipped to deal with the notion that anyone other than a major can claim a copyright. Warner's were one of the lead petitioners in the attempt to put those three stoner lads in Sweden in prison recently, remember.

Meanwhile, the song which Collins wants to give away, but cannot, is being sold all over the internet... but not by Collins. Instead, it's by major labels who have no right to do so, according to Collins' manager:

A Girl Like You is available FOR SALE all over the internet. Not by Edwyn, by all sorts of respectable major labels whose licence to sell it ran out years ago and who do not account to him. Attempting to make them cease and desist would use up the rest of my life. Because this is what they do and what they've always done.

Wait... major labels... selling a song they don't have the right to, and not giving any of the money back to the artist? That seems a hell of a lot worse than just sharing a song for non-commercial reasons, doesn't it?

Meanwhile, Collins has no problem with the sharing of bootlegs:

Andrew Loog Oldham said that getting ripped off (by the industry) was your entrance fee to the music business of the sixties, so get over it. He's right and things have not changed. We are very over it, but nonetheless aware of who the biggest bootleggers around are. It's not the filesharers. Personally, we've always loved bootlegs. Even when Edwyn was really skint at the fag end of the eighties, I remember being in Camden market and seeing some tapes of a couple of his shows on sale. I tried to buy them but the stallholder somehow knew who I was and said "free to the management." I failed to see how that guy selling tapes of Edwyn or even U2 or anybody on the list of signatories above could harm their career.

And... then at the end, she's got a nice little message for the Featured Artist Coalition and its silly petition to try to stop file sharing:

The gig's up. You might as well take a position about when you want the sun to come up in the morning. It's over. Now let's get on with working out a wonderful new way for music lovers to enjoy music for free or for a small subscription that makes it legal and easy to hear ANYTHING and allows the artist to reap the rewards of such freedom of access. Viva la revolucion!

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Did Showtime Benefit By Giving Away Free Content?

from the apparently dept

Here is yet another example of how "free" can co-exist with paid content, even when the content is basically identical.

Recently, Showtime made the season premiers of their hit shows DEXTER and CALIFORNICATION on YouTube for anyone to watch for free.  So, did this gut their numbers when the shows aired on their subscription-only, kind of expensive if you ask me, premium cable network?

Both Dexter and Californication scored some huge opening numbers last Sunday with Dexter setting a new opening record for the cable network.

More than 1.5 million sets of eyeballs tuned to the season four opener for Dexter and 821,000 stayed to watch the opener for Californication. That's 3 million single eyeballs for Dexter and more than 1.6 million for Californication.

Guess not.

Crossposted from MyMediaMusings

David Title is an expert at the Insight Community. To get insight and analysis from David Title and other experts on challenges your company faces, click here.

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That Whole Watch An Ad To Get Content Thing? Patented... And The Patent Holder Has Been Suing

from the watch-out dept

So we were just talking about some new company called Free All Music, which has a plan to let people download free mp3s if they agree to watch a video ad first. I have my doubts about how well it would work... but apparently the company may also need to watch out for another issue: a bogus patent. You see, there's some company called Ultramercial, who not only holds a US patent 7,346,545 on the concept of distributing content where the user can get it for free after watching an ad, but Ultramercial recently went legal. Just a few days ago, it sued Hulu, YouTube and WildTangent for infringement over that very patent. Seriously, USPTO? A patent on watching an ad before getting free content? This is why patent examiners get such a bad rap.

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Filmmaker Discusses Creative Marketing, Freeing Up Movies, Embracing New Business Models

from the sounds-cool dept

Nathan Smith alerts us to an interesting interview with filmmaker Sally Potter, discussing her new movie Rage, which has a variety of unique and interesting facets to it. The movie -- which has a bunch of famous actors, including Jude Law, Judi Dench, Steve Buscemi, Diane Wiest, John Leguizamo and others -- is being released first on mobile phones, with a different part of it released each day for a week (I believe this past week). The film is supposed to be from the view of a cameraphone, so that makes sense. But, Potter has also worked hard to cultivate a strong fanbase through a variety of online methods. And, of course, she's all about embracing "free," embracing what the technology enables, and thinks the rest of Hollywood is a bit silly to live in fear and try to lock everything down:

FNB: It's true, everyone is talking about this, what is the economic model? Is there one?

SP: Not yet. The music industry is slightly ahead of us and had to go through the same thing already and it's shock, horror, terror, everyone's going to go bankrupt because everyone can have everything for free. Lots of resistance, I'm talking about filmmaking now, legislating against copyright and everything is watermarked, anxious, anxious, and all that. And I think my attitude is, go the other way. Open the gates, say "okay have it." It's free, it's yours and then if you want me to go on and make other things, you're going to have to complete the circle by going out and buying the DVD. Maybe in the future it will be some sort of subscription model but I always wanted to do that with this one.

FNB: There was a recent article we read that said the next generation of digital consumers still wants to pay to go to theaters. It's not mutually exclusive, which is calming to know that just because one is succeeding doesn't mean the other is going to disappear.

SP: Its not either/or, it's AND. It might make cinema owners and distributors sit up a little bit, and make it a more pleasant and thrilling experience to go to the theater, make the quality of the projection better, the seats more comfortable, make it back to the real beginnings of what joining together in a big group is all about. Similar people can have their own access to watch it home on Blu-ray, its one of the things that I do. I have a good screen and I watch things together with a group of friends. Comfortably lying about. And that feel just as true of a cinema experience as going to some wonderful cinema.

Indeed. We've been pointing out for the better part of a decade that going to the movies is a social experience, and the best way to do that is to make that experience better. Many theaters have started to catch on to this (finally).

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Smashing Pumpkins Latest To Embrace Free Music... With A Reason To Buy

from the really-free dept

It looks like another "big name" band is recognizing the power of free. The Smashing Pumpkins have announced that its latest album will be released entirely free:

Each song will be made available absolutely for free, to anyone anywhere. There will be no strings attached. Free will mean free, which means you won't have to sign up for anything, give an email address, or jump through a hoop. You will be able to go and take the song or songs as you wish, as many times as you wish.

And quite an album it will be: the band is working on releasing 44 songs. The idea is to release a song at a time starting around Halloween (the band is just starting to record them now) until all 44 songs are released. But, the band is also offering up a "reason to buy" as well:

We will however sell highly limited edition EP's (of 4 songs each times 11), and details of how those EP's will be made available are still being worked out. Because the songs themselves will be free, the EP's will be more like collectors items for the discerning fan who will want the art itself, along with the highest possible audio quality available. The EP's will be more like mini-box sets rather than your normal cd single. We may also offer other variations for sale, say for example a digital single with a demo version of a song. The commitment that is most important is the one I'm making to you: that the music of 'Teargarden by Kaleidyscope' will be available for free to everyone. All 44 songs: free for ALL.

When the entire album is finished, it will be compiled into a deluxe box set which will also be made available for sale. Those who have bought the EP's need not worry, as the box set will not be a recompilation of the limited edition pieces.

Sounds cool to me. Give away the music for free, connect with those fans, and then give them a reason to actually purchase something physical and scarce that's much cooler than just the music. Great to see another "big name" figuring all this out as well. And, before people say that the band can afford to do this because it's already huge and well known, most of the artists we discuss doing this sort of thing are small artists, who do it to establish themselves to get attention. Claiming that this only works for one type of artist is an increasingly naive statement. Smart musicians of all sizes are recognizing all of the opportunities that using the music as a free promotion presents.

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Forrester Plan For 'Saving' The Music Industry: Annoying Windowed Releases?

from the copying-bad-movie-industry-ideas? dept

Last year, we wrote about a claim from Mark Mulligan, a VP and director of research at Forrester (the big analyst firm), who argued that music can't be free -- even as a bunch of musicians were proving him wrong. His argument was based on a faulty understanding of both the industry and economics. Mulligan is also the guy who wrote the Forrester report (funded by the recording industry) that involved some nifty guesswork and totally made up numbers that the UK government is now relying on to describe the "piracy problem" in that country.

His latest effort is to release a report on how "to save the music industry from the current Media Meltdown it finds itself in." Funny, I thought we were just seeing multiple studies -- including one from the music industry itself -- noting that the music industry is getting bigger, not smaller. Not quite a media meltdown. What's been getting smaller is one increasingly obsolete portion of the industry: selling songs (or, really, selling physical media with songs on it, and a weak attempt at replicating that online).

First, the good news: somewhere in the last ten months or so, Mulligan has recognized that free music can exist. That's progress! The second part of his theory is also a big step forward, claiming that the key to "saving" the industry (that doesn't need saving) is to create "a continual artist-fan relationship." Yes, exactly. Some of us have been saying that for years. There's more in there too about how much of the industry needs to change and innovate to keep up with the times. Good stuff and great to see Forrester finally catching up and catching on to where the market is headed.

But, of course, parts of the plan are a bit of a headscratcher. It still seems very much focused on getting people back into "buying music" rather than coming up with actual scarcities to buy. Instead, it tries to invent new artificial scarcities, mostly by copying an awful idea from the movie industry: windowed releases. The idea is that "premium club" members would pay to get access to music before others, and could get some sort of bundle of content. Two weeks later, the regular "release" would happen, with CDs, download stores and radio. Then, three weeks later, there would be a "free" component that actually is more "feels like free" using either ad-supported downloads or streaming.

Of course, like the movie industry, this ignores both reality and what people want. Those timelines won't make much sense, because as soon as the music's out, it'll be widely available. There's just no stopping that. Artificially holding it back doesn't do much good and doesn't give anyone a reason to buy. If anything, it actively drives people to unauthorized copies. Those who don't want that "premium club" offering won't wait six weeks for the official "free" streaming version with ads. They'll just go out and get an unauthorized copy.

So, while I'm glad that Forrester and Mulligan seem to be trending in the right direction with this report, it still seems to come up a bit short in terms of reasonable concepts for the industry.

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NPR Recognizes It Makes Business Sense To Give Up Content Cash Cow And Go Free

from the good-for-them dept

A few months ago, Newsweek ran an excellent interview with NPR CEO Vivian Schiller, who only recently joined the organization, after leaving the NY Times. The interview showed that Schiller totally understands the problems and issues facing journalism today. She's embracing better web interaction, recognizing that NPR isn't a "radio" operation, but a news operation, that NPR has strong advantages in terms of having local reporters on the ground around the country -- and, perhaps most interesting of all, that "free" is not a bad thing:

While employed by The New York Times, you helped the newspaper stop charging for online content. Now it's reconsidering. Generally, why do you oppose paying for content?
I am a staunch believer that people will not in large numbers pay for news content online. It's almost like there's mass delusion going on in the industry--They're saying we really really need it, that we didn't put up a pay wall 15 years ago, so let's do it now. In other words, they think that wanting it so badly will automatically actually change the behavior of the audience. The world doesn't work that way. Frankly, if all the news organizations locked pinkies, and said we're all going to put up a big fat pay wall, you know what, more traffic for us. News is a commodity; I'm sorry to say.

But the Times did get people to pay, right?
We far exceeded our expectation--225,000 subscribers paid $50 a year, in addition to the home delivery subscribers, who got all of the Web for free. But guess what, that's $10 million. Instead of 225,000 who pay the $50, let's say it's one million subscribers. OK. That's $50 million a year. That's not going to save any newspaper. It's going to kill your advertising base. The numbers don't work.

It appears that she's putting this realization to work in other ways, a bunch of readers have been submitting an NPR blog post explaining why it has stopped charging for transcripts of programs, and started offering them for free on its website. Despite being something of a cash cow for NPR, the organization realized that it was short-sighted to lock up the content, and went against what people wanted:

Why did we give up this revenue stream? First and foremost, the users expect to be able to come to our site and read the story they heard on the air. As rich as the radio stories are, reading is faster than listening, our users told us. Although we were writing Web versions of many radio stories, a number of stories still didn't have much text. Making transcripts free solved that.

But a bigger realization was recognizing the basic trendlines. Paying for transcripts is a shrinking business. Getting more people to the website and making money in other ways? That's an opportunity:

There are solid business reasons for making transcripts free. Sales have been dropping over the years. As people search for, discover and share content, offering free transcripts will boost the traffic to NPR.org, traffic that can be monetized with sponsorship. Finally, search engines like text. Many of our stories could not be found by the search engines because they did not have enough text. Now it will be easier for the search engines -- and ultimately the users -- to find and enjoy NPR's stories.

Now, of course, as a partially gov't supported non-profit, NPR has some different issues in how it operates, but those differences aren't nearly as big as many people might think. The gov't support only goes so far (hence the annoying pledge drives and pushes for corporate sponsorship). It'll be interesting to see what other business model ideas NPR and its new leadership comes up with in the future, and it'll be fun to see if the big newspapers put up paywalls, allowing NPR to increase its traffic, as planned.

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