“Nothing in this world is free.”
You’ve heard that a million times – probably from your father – but is that antiquated, omnipresent quote valid anymore?
Yes …. and No.
It may seem like we’re getting all kinds of free content – Facebook, Twitter, Hulu, etc. – but blogger John Falls, who maintains the site Social Media Explorer, begs to differ.
In his recent post “The Economy of Free Is Stupid,” Falls argues that our free ride has a limited lifespan. And his stance makes sense. The reason these platforms and applications are “free” is because advertisers’ dollars subsidize our costs. They pay, we partake. But how long will it last?
His point – the short of the long – is simple. Take DVR for example, he says. We love our TiVos, but sooner or later the shows we love the most – the ones we record so we can skip over the commercials – won’t be around. Advertisers pay all the fees associated with television – actors’ salaries, production costs and so on. If you’re not watching their ads, they’re not making any money – and they’ll be less inclined to sponsor that show in the future. And when measurable viewership declines, advertisers pull out, leaving the networks no choice but to halt production.
Of course, there’s a loophole in this theory. Falls’ belief is based on the assumption that the masses will adopt DVR. But so far that hasn’t happened. While many people are moving their TV viewing to TiVo and online, the majority of couch potatoes still watch TV the old-fashioned way – in front of the set, enduring 15-, 30- and 60-second spots for products they don’t need or want (or so they think). But how long will that last? Sooner or later, TiVo – or a similar brand – will wiggle its way into most American homes. Just like VHS, DVDs and CDs did. It took time, but it happened.
In his post, Falls also touches on social media developers. The ones who rely on investors to finance the building and marketing of the technology; the ones who offer it for free, hoping that a Google or News Corp. will swoop down and save the day by buying it up for an exorbitant amount of money.
But that doesn’t always happen. For every Facebook, there are a thousand social networking sites that can’t find their legs – ultimately leaving its developers broke, with investors banging down their doors.
Which goes back to Falls’ original point. How long will this “freeconomy last” – how long can it last? Sooner or later somebody has to pay the bills. But if there’s no one there willing to foot it, what happens next?
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While I see the point – I don’t think it makes much sense. Like anything else, just as these social networking sites evolved and developed, so too will the way people advertise. For example, the networks that now stream their shows online don’t show it for “free” either, they have 3-5 short 15-30 second commercials interspersed throughout the show. Frankly – I’d much rather watch an HD stream online (especially since I can hook it up to my HD tv) and endure 5 short commercials, than to sit and watch it “live” with no ability to fast forward and sit through ALL those commercials – even with DVR when you can skip over it, you waste plenty of time having to stop and rewind at the right moment….
I think it’s all about evolving and changing with everything else. If the medium changes, then the method should too.
The methods for funding TV shows and other content will definitely evolve. The problem is, I think, that we’re in an alignment period where consumers, content providers, and advertisers are all still figuring out what we want and what we should expect. Right now the New York Times has started experimenting again with pay-for-content models. I think everyone is still figuring it out. Interestingly, the publishing industry has been dealing with some of these issues for a while. Hard covers make a lot more money than paper-backs, and the industry rolls out paperbacks on a later schedule to try to shape the marketplace and consumer behavior. They’re doing the same thing with releases for Amazon’s Kindle and other eReaders.