From Radiohead to the New York Times, the winds of freedom seem to be blowing through the World Wide Web these days. And Chris Anderson, the Wired editor and author of the big-think business book of the moment The Long Tail, predicts they are going to blow a whole lot harder.
I caught Anderson’s talk at the Éditions Infopresse 360 conference in Montreal earlier this month, and just about every day since its been hard not to see news reports and announcements that don’t bolster his argument that information and entertainment content will soon be almost universally free. Anderson, in fact, says his next book will be called “Free” and he’s trying to sort out with his publishers how to distribute it, or at least a version of it, for free.
To me the Times announcement in September that it would cease having paid subscriber-only sections of its site and allow all comers access to everything gratis was a watershed moment for online media. When America’s journal of record gives up on its decade-plus long efforts to make Internet uses pay for even some of its premium content, you know something big is afoot. Anderson foresees the day that even The Wall Street Journal, widely considered the most successful of old-line media entities at getting users to pay for online content, will ultimately follow.
The 360 conference, by chance, was held the day Radiohead released its latest album, In Rainbows, online with a much ballyhooed pay-what-you-want -or nothing at all if that’s what you want- model. So naturally the state of the music industry was exhibit (Kid) A in Anderson’s case for the inexorable rise of “free” online.
It’s Anderson’s contention –and one that is hard to fault with- that the total music “industry” has never been healthier, especially if you include the sales of digital music players like the iPod. More music is being released and consumed by more people, and in greater varieties, than ever in the past. There’s lots of money flowing around the music industry yet, it’s just that the folks who used to reap the lion’s share of it aren’t doing so as easily any more. Now that the big labels no longer have a monopoly on distribution channels, any niche artist can get their material into the hands of listeners. Few of them are making a killing financially –at least in selling music-, but a lot of them are doing pretty well by increasing their exposure and earning revenue from other sources such as concerts, or special premium priced limited edition pressings or enhances DVD packages. This is Anderson’s “long tail” theory in action.
Radiohead hardly qualifies as a niche band –even if it is without a major label record deal these days– but it has definitely embraced alternative distribution and marketing tactics with In Rainbows. It seems to have paid off quite nicely. The first week saw the equivalent of 1.2 million album units moved, with people voluntarily paying an average of $8 per album for total sales of nearly $10 million. Yes, nearly a third opted to pay nothing or minimally for their downloads. But at the other end of the scale, business was also brisk for an $80 premium boxed-set edition that included two vinyl discs, two CDs and a special booklet. Nice work if you can get it. Even better when you consider that the band doesn’t have to share any of that with a record company.
But does this Radiohead gambit really count as “free” if most people are paying for the music voluntarily? A better example would have to be Prince who last summer “gave away” free copies of his Planet Earth CD with London’s Mail on Sunday. We’re talking almost three million CDs. Prince’s UK record label was so incensed with the deal it refused to distribute the album there. But, here again, “free” is perhaps an exaggeration. People had to buy their newspaper to get the CD. The Mail, viewing it as a circulation booster, did pay Prince an undisclosed fee for the distribution rights. And, ultimately, what this was about was promoting Prince’s 26-night stand at London’s O2 Arena, which sold out –and grossed nearly $26 million in the process– in part because of the CD give-away.
A smaller scale example would be my own relationship with Bruce Springsteen’s latest record. The debut single, “Radio Nowhere,” was available for free from the Apple iTunes store during its first week of release. I downloaded it. Having sampled the “free” single, I –and a few million others- later paid $15 for the full album … and shelled out $130 for a concert ticket too (I didn’t buy the $40 tee shirt, but many did).
Artists with the longstanding brand recognition of a Radiohead, Prince or Bruce Springsteen are naturally better positioned to take advantage of evolving music industry business models. But lesser known artists, and businesses in other sectors, can apply a lot of the same logic.
Chris Anderson made the case that the big mass media giants –and in that he includes his day-job employer Wired, which after all is owned by Condé Nast- are struggling with the new reality that on the Web Joe’s blogshop, operating out of someone’s basement office, can earn Internet traffic that rivals a New York Times or CNN. Here again, media isn’t dying, its just that those companies that used to make buckets of money from their control of the limited media channels aren’t hauling those buckets in as fast and furious as they once were. And those who used to be part of the oligopoly controlling public attention now have to share media consumption time with a multiplicity of voices –almost all of them free. Hence, the Times’ decision that it’s a better business model to have no impediments like fees for access in order to maximize the eyeballs on its site and sell more ads.
The evolution of the stolid old trade press may be the best example of how to adapt to this new media universe. Few trade titles, which by their very nature are niche oriented, have paid circulation models any more. Most rely on controlled or qualified circulations among relevant audiences that appeal to advertisers-essentially they’re “free” to readers. The U.S. trade association American Business Media released data earlier this year that noted for the first time last year business-to-business publishers there earned less than half their revenue from advertising. Instead, the majority of income is now coming from ancillary products like conferences, events, guides and directories that people pay premium prices for. None of those things would exist without the mother ship publication or Web property, but the media vehicles in and of themselves have become almost loss leaders to get people’s attention and bring them into the tent. Not unlike Prince giving away CDs so people might think about coming to the show.
Anderson, in Montreal, was frank about his book projects. On a per hour basis, book writing isn’t where the money’s at-even for a guy at his level. But having a best selling book enhances “brand Chris Anderson,” and ensures he can command serious speaker fees.
For his next book, the one he plans to call Free, Anderson said he will probably make it available online as an entirely free download. But he’d also like to see if he can make it free in a hard copy version, perhaps supported by advertising. And, of course, there’ll also be the “premium” edition that would come without ads and on better quality paper that you can pay for it you want it. He might even try a pay-what-you-like model. It seems to have worked for Radiohead.
Let me know what you think |
