In art, as in commerce, a price tag traditionally has magical powers. With the flick of a wand, a dollar sign confers desirability on an item that might be thrown away if it was handed out for nothing.
And yet for almost a decade now, quality entertainment and culture, as well as mainstream sources of news, have been freely available on the Web. The arrival of the Internet has seen musicians, publishers and news organizations all slowly float off together into uncharted waters.
Consumers who have grown up during the past 15 years are completely at home in a world where much of what they want to hear, see or read will cost them nothing. True, in the case of some films and TV shows, the practices involved may skirt around the law a bit. Generally speaking, though, culture has become a happy free-for-all. Now may be the time to pay the bill.
Chris Anderson, a leading US commentator on the Web and editor-in-chief of Wired magazine, puts the matter concisely: “Somehow an economy had emerged around ‘free,’ before the economic model that could describe it.”
Anderson’s next book, Free: The Future of a Radical Price, will both celebrate and analyze the effect of all this giving away. The author of influential 2006 book The Long Tail, Anderson is to suggest that few of the conventional rules of commerce, such as “supply and demand” and “economies of scale,” apply any longer.
While some suppliers, such as Sky Sports, might still get away with charging their audience, they would have to be pretty sure they offered a unique product.
One of the biggest players in the game last week questioned the rationale behind the current give-away culture. Rupert Murdoch, head of News Corp, even went so far as to refer to it as a “flawed” business model when he spoke to reporters in New York.
The media mogul — who owns the Times, Sunday Times, Sun and News of the World in Britain, as well as Fox News and the Wall Street Journal in the US — announced that he was considering charging for more of his Internet sites.
“We are now in the midst of an epochal debate over the value of content and it is clear to many newspapers that the current model is malfunctioning,” Murdoch said.
His volte-face followed background news that profits from News Corp newspapers were down year-on-year from US$216 million to US$7 million and that British newspaper advertising revenues were down 21 percent. The upshot was, Murdoch concluded, that within a year the Web would have utterly changed its financial model and his titles would be leading the pack.
Earlier in the week, reports that the Guardian Media Group (GMG), the owner of British daily the Guardian and the weekly Observer newspapers, was thinking along similar lines had ricocheted around the globe. While GMG management have no plans to charge for content on its sites, chief executive Carolyn McCall did suggest that a subscription system was conceivable for some specialist areas.
For Anderson, the changes that lie ahead are more complex than simply introducing entry fees at a few gates on the Web. Instead, he is predicting the twin birth of a “reputation economy” and a “time economy” to exist alongside the battered old “money economy.” As a result, value will be assessed differently by both providers and consumers.
Free access to entertainment and information is inevitable on the Web, he argues, because there is still unlimited shelf space. Putting something up there, in a shop window, costs nothing, so the worth of the product alters. People are already making lots of money charging nothing, Anderson points out, and that is because it brings them other things they want.
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