By Katherine Warmen Kern, from www.comradity.com, New York.
Adam asked for 2010 predictions. (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 realise 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 customer could unwittingly or intentionally deceive the 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.”
The Axel Springer cross-media platform pays content contributors, unlike the Huffington Post, charges content consumers and generates ad revenues, but does not “rely” 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.
Follow Katerine and the guys from Comradity on Twitter via @comradity
I discovered Katherine and Comradity via Twitter about six months ago.
We struck up a pretty instant connection due to our collective passion for media and its role in society.
I asked Katherine to give us her opinion on how 2010 might look from a media perspective.
I think you’ll agree some great stuff has been raised and shared.