Adam Vincenzini, a PR professional with Paratus Communications in London, and publisher of The Comms Corner asked for
our 2010 prediction. (In the interest of
transparency, we aren’t paid journalists.
This prediction is the premise for the Comradity value proposition for consumers,
content creators, brands, and publishers/programming companies.) So here it goes . . .
The word “Free”
has been a divisive lightening rod in 2009 - the battle line between traditional
media programming and publishing giants and new media advocates. The tension around the word “Free” is associated
with only one of its 36 definitions on dictionary.com.
In fact it is #36, the last definition: “without cost, payment, or charge.” The many
other definitions of “Free” are about freedom, starting with the first: “enjoying
personal rights or liberty, as a person who is not in slavery: a land of free people.”
Our
2010 prediction is that we realize the inevitable risks of the advertising business
model are not exclusive to traditional media.
Specifically, the inevitable risks of the advertising business model are
these:
1) Giving away
content for free is a great way to minimize marketing costs but the inevitable
risk is lower perceived value.
2) Relying on
advertising dollars to fund the development of content is more efficient than
convincing millions of people to pay for the content, but the inevitable risk is
satisfying the needs of the paying advertiser at the expense of the non-paying consumer.
3) Outsourcing content
and technology creation lowers the cost of product development, but the
inevitable risk is that the creators lose enthusiasm for the YWFFTMMR (You Work
For Free To Make Me Rich, an acronym coined by David Winer, who is, ironically, a
pioneer in the development of the technology that made YWFFTMMR possible: blogs
and “free” syndication or RSS, which create free content for Google News and the
Huffington Post).
In
2009, the news industry has learned that giving away a product online, that
they charged for in print, has lowered the perceived value of the content.
In
2009, Techcrunch quotes
Zynga founder, Mark Pyncus “I did every horrible thing in the book just to get
revenues.” Specifically, most of Zynga’s
revenues relied on tricky advertising referral deals. But this is the tip of the iceberg. A class action lawsuit against Zynga and
Facebook has much bigger implications for 2010.
In
2009, at the Monaco Media Forum, Arianna Huffington, who aggregates
professional and amateur produced content links, without permission or licensing
fees, and fills in the rest of the content needs with “volunteer” bloggers,
faced the music from Mathias
Döpfner, chief executive of Axel
Springer. According the Financial Times,
he “told Arianna Huffington that a Polish newspaper his company set up
at the same time as she founded HuffingtonPost.com in 2005 was already making
more in profit than the rumoured $6m-$10m her site was seeing in revenue.” Unlike the Huffington Post, the Axel Springer cross-media platform pays
content contributors, charges content consumers, and
generates ad revenues without relying on them.
Our prediction is
that traditional and new media businesses will adopt the Axel Springer business
model, opening the door to evolve the notion of “free” to freedom.
Here's the discussion at the Monaco Media Forum:
