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The Death of Free: Will Free Online Content Like Hulu Ever Dry Up?

Chris Anderson WiredIs there a solution to the world’s content woes? Chris Anderson, Editor-in-Chief of Wired Magazine, has proposed an idea or two in his various books and articles promoting the idea of free being the future of business. He states as in his new book Free: The Future of a Radical Price that “anything that becomes digital will become free.” Anderson said in an interview with his own Wired Magazine that he thinks “everything will be available in a free version” because the marginal cost for digital content is zero, so the price should be zero as well. That is the basis of Anderson’s model for free online content.

In contrast, while Doctor says there are many solutions to this problem, he does not think Anderson’s is one of them. He thinks that accepting the mantra that free is the future and the only way to go is “just plain silly.” Of course, Doctor’s suggestions are not free. He thinks more news publishers should charge a “convenience fee” for their content accessed through mobile devices like eReaders and smartphones. “Chris Anderson seems to think this problem will work itself out, but obviously it’s not,” he says. “People are already used to paying for mobile services, so for news publishers and other Web content providers to start charging more mobility fees might be a more gradual solution.”

In defense of Anderson’s thesis, John Blossom, the author of Content Nation: Surviving and Thriving as Social Media Changes Our Work, Our Lives and Our Future, says Anderson merely “points out the basics of supply and demand” and that the fundamentals of what he’s talking about are “totally sound.” Blossom, President and Senior Analyst at Shore Communications Inc., says that Anderson clearly says in his book Free that artificial scarcity can still be a useful online tool. “To a certain level, Chris points out the fundamentals of economics and his argument can work to a certain extent,” says Blossom. “For example: I’ve been blogging for almost six years and I’ve actually gotten quite a few consulting contracts just from people reading and liking the free content on my blog.”

Wall Street JournalTaking a step further, he has his own solutions for the matter. Blossom says this situation is nothing new. “The publishing world has always had a mixture of free and paid content, so this debate is nothing original,” he claims. Blossom believes there is a happy medium dwelling somewhere within free and pay-only. The most successful model of this is the Wall Street Journal (WSJ) that shares some of its news with the online public, but the majority of online WSJ viewers have their own subscriptions. Blossom says the print and web industries need to figure out how to make viewing their content an “experience.” The media understands that experiences are marketable—people pay hundreds of dollars to go see their favorite band in concert, they pay $20 cover fees for entering a cool new club, and they’ll pay to have a subscription to the WSJ. “People pay a lot of money for an Apple computer to be a part of that ‘Apple community’ and the Wall Street Journal has been so successful because they made it exclusive,” he says. “They made people want to read their news because they are a branded community.”

Furthermore, Blossom agrees that the economic downturn amplified pressures for online publishers to produce more paid access models and, he says, the number of these models can be expected to increase over the next few years. However, the websites that will have WSJ-status success will be the ones that can market something unique along with free content. The paid models that will struggle are those that lock down web content in a we-did-it-because-we-can type of fashion. According to Blossom, everyone wants to be part of a “scene,” and people will pay websites to be a part of the unique experience they can provide.

In a hopeful conclusion, Outsell’s Ken Doctor reports that advertising is coming back to the Web and that 2010 is looking far more stable and profitable. But, the mania surrounding the free content battle is far from over—some experts will say free is the future, while others disapprove. What we do know for certain is that, whether it’s free content or a free lunch, there will always be a basic human demand for “free” things.

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