Six Pixels of Separation - The Blog
January 5, 200911:39 PM

There Is A Cost To Free

Whether you are creating any form of content online (text, audio, images or video) or are simply consuming it, there is a huge cost to all of this free goodness.

On December 23rd, 2008 I posted a Blog entry titled, Breaking News On The Internet, where the question came up:

"Who is going to pay for all of this content that we are all now consuming online?"

That question could well be the crux of the problem most Marketers have with trying to figure out either how to monetize the Social Media channels or how to connect with consumers within it. The business behind most content has always been:

1. Advertising supported to make the content free.
2. Advertising supported to subsidize the cost.
3. Advertising-free with a cost.

Free without any form of advertising is only a business model if you can either sell and profit from the content (like a book) or if the media is being supported in another way (like government funding or private support). It's the way it has always been, so exploring new business models (see: Trading Analog Dollars For Digital Pennies) is a huge challenge for most companies. The other side of the coin is forgoing the idea of getting into these channels via advertising, and engaging in the concept of creating your own content and building your own community. Nothing builds loyalty like providing high quality content in a constant flow. These digital channels (be it a Blog, Podcast or online community) enable people to publish for free, but there is a huge cost. It's not just from the design, implementation, maintenance and hosting of the online channels (after all, if you don't want full control over the final product, there are many places that will give you the tools and the space to do it for free), but it's the creation, ideation and ongoing curating that is expensive.

Anybody can Blog, doesn't mean anybody should Blog.

Yes, the best part of these tools is that they are free and easy to use, but we all know the saying, "just because you can, does not mean that you should." On the personal or hobby side of things, Blog away, post away, tweet away. From a professional perspective, you need to have the content creators and a semi-well thought out plan in place if you really want to use these channels and tools to create a viable media property surrounding your brand, products and services. It's not as simple as freelancing the video out and it's way harder than hiring a writer to be your in-house Blogger.

There's probably a decent argument here that being able to publish for free has made the value of great content that much more valuable.

If everyone is publishing content across all platforms, who stands out? Clearly, the ones who are really being different, unique, creative and relevant. Finding the right people who "get it" and understand how the conversations flow, and how to keep them going is priceless. Figuring out how to take that channel and make it work - in terms of pure ROI and alignment with your overall business strategy - can't be cheap (or free)... and it shouldn't be.

What do you think: is content really free?

By Mitch Joel


Comments Comments Feed
  • Posted by Mike Bishop
    Mitch Joel

    I can't answer the problem, but I wonder what kind of penetration and success are online pledge drives like the recent WikiPedia having? And are we as a culture ready for more of that?

    Reply
  • Posted by Jeremy
    Mitch Joel

    It's gonna be an ever more important question. I think as TV advertisers recognize that 70% of DVR owners don't watch any commercials at all (according to Universal-McCann), they are going to look to new places to get their message across.

    We all know interruption advertising is not very effective, but I think until someone comes up with a better way, we may have to deal with it.

    In the podcasting world, the sponsorship opportunities are HUGE and the listener pain can be relatively minimal (no more than 10 second pre-roll). Ad agencies are going to have to step up and be quick to turn around customizable content for targeted audiences in this space.

    Also I think that budgets that used to be spent on other things (print, manufacturing, etc) could maybe be repurposed toward remarkable content creation. I'm hoping, anyway.

    So who pays? Anyone who would like to connect their brand to the particular content being created, I suppose.

    Reply
  • Posted by Chuck Green
    Mitch Joel


    Interesting you pose this Mitch. I just read an article that pointed to the fact that the motivation for many is a different type of currency--control and influence. We are definitely in uncharted territory.

    I think the new issue is being heard. It wasn't long ago that writing a book, even an article required the investment of a publisher, an editor, a printer, and so on--that in itself signaled the reader that you might have something worthwhile to say. Now, the content world is vast, uncharted territory. You've got to find what you're looking for AND establish credibility. I'm not complaining, I love it. But it is a very significant shift in the paradigm--one we are yet to understand the ramifications of.

    Reply
  • Posted by Kirk Skodis
    Mitch Joel

    Yes. Content is really free.

    Free for the consumer. Unless you count time spent consuming it as a charge. Which isn't the case in common parlance.

    Of course it's expensive for the creators, but they have already estimated their ROI and decided that whatever the cost may be (time, effort, curation, strategy, etc.), it is worth it.

    But even at professional levels, content creation for Social Media channels is miles cheaper than old media.

    Reply
  • Posted by Brett
    Mitch Joel

    Content isn't free.
    In the creation of anything, there is a cost, and most of the time we try and define that cost in finacial terms. Doesn't mean the cost, or the definition is accurate. Some people use the formula 'more is better', for either creating or consuming content. Not always accurate.
    As for ad-based revenue, it needs to change. It's become so pervasive that we begin to unconsciously block it - quite effectively too. It isn't effective, it's just annoying and degrades the experience.
    Would we support paying for content? Yes, if there wasn't a cheaper, inferior alternative.

    Reply
  • Let me be very clear. Advertising works. Traditional advertising and the new stuff. If it did not work, people would not do it. We also need advertising - and of all kinds and strategies. Great advertising does sell product and build brand reputation. Could it be better? Always. Are there other things that a company can be adding into the mix to do more? Yes. Even with overall response declining, there are those advertisers who beat the odds (and by a lot). The reason: they are spending their time focusing on it and not just watching the numbers decline and doing nothing about the general fatigue.

    I don't think people ignore ads. I think people ignore bad ads that are not relevant to them.

    Reply
  • Posted by Heather Kennedy
    Mitch Joel

    Content isn't free. Time and attention are the commodities. Even a blog such as this that does not display advertising requires of you, your expertise and for those of us that comment, our time and thought to do so.
    This 'free' content that you publish benefits both you and the community of those who comment here. Free feedback on your best ideas to move your work forward.
    In a sense your 'free' content is advertising for you, for your brand. A stretch perhaps, but you are one of my top reads. I might have 150-200 posts in my reader that I plow through each day. I would pay to have exclusive access to my top 10 reads, but over time they would be less valuable if they were set apart and didn't link to other non-exclusive content.

    Instead? Nonetheless, I still "spend" more here and at my top sites because I read and reread them, follow the links, recommend them as good reads and return time and again for the quality.

    Though I 'spend' equally at my craft/hobby blogs because I twitter with those folks, comment more often, return to comments, shop at their Etsy stores and genuinely care more on a personal level.

    Which areas of my online presence would I cut if I had less time? That is what will be interesting to see with the Facebook crowd. High school to college. College to work. Employers getting stricter about online access during work hours owing to needing greater productivity in leaner economic times. So many factors. There is no free anything.

    Twitter only succeeds because people use it. If there was a boycott and the fire hose of information was but a dribble? What data would there be to analyze? The recent hacks remind me why I'm only marginally invested there. It's a fascinating tool, but not a stable one.

    Reply
  • Posted by Bob Krupinski
    Mitch Joel

    Content is no longer king. Content is water, its plentiful and only valuable if the supply is interrupted or the quality is considered unacceptable. But given what the majority of people are willing to consume, that bar is very low.

    Return from existing content must come from added value or the content's exclusivity which today is very difficult to maintain.

    I don't understand why branded ads are so slow to take root. Is it just risk adversion?

    Reply
  • Posted by Mark Dykeman
    Mitch Joel

    No, content is not free. The cost is either financial, physiological (time and effort spent), emotional or opportunity. Someone always pays. Over the long term, content creation must be rewarding (in some way) to both the creator or the consumer or else the content will eventually stop coming.

    Reply
  • Posted by Ryan Deschamps
    Mitch Joel

    Content isn't free, but the costs for development could be paid for from leisure (ie. hobbyists). In short, for many, the consumption and production of content are both commodities, (subsidized by day-jobs of course).

    That said, if content production is leisure, that would imply it should be taxed heavily, which wouldn't gain a lot of support from this audience I presume. :)

    Thus, the real money happens for companies/products that open the door for people to engage in content production. What Twitter eventually does to make money is going to be very very important in the end.

    Reply
  • Posted by Guy Jarvis
    Mitch Joel

    Interesting question. At present content is free - quality notwithstanding - and I cannot imagine the public's willingness to switch back to a premium or subscription format anytime soon. Resistance to change is strongest when the wallet is concerned.

    Major changes in the way we normally do things is always a disruptive process, and the media & advertising alliance has probably just started down this path.

    From an online perspective, I believe advertising will obviously survive (as I agree that it does work), however it will flourish in a very targeted environment, and this does not include behavioural. Just because I am watching some hockey highlights does not mean that I play hockey, therefore ads for the new top-end skates will be lost on me. Targeted ads within a quasi-closed social network however that can learn and adjust from my personal profile would have a higher probability of click-through success….and this comes back to content. There are so many people shouting from their soapbox, I cannot hear myself think. I would prefer a web2.0 community where participation is qualified to ensure integrity and quality of content.

    Advertising will meander but eventually settle in an environment where audience composition is clearly defined and the market quantification is transparent, as the advertisers’ ROI will be the determining factor.

    Reply
  • Mitch Joel

    I'm an indie author who's watched the homogenization of American literature at the hands of media megaconglomerates with growing horror. Those once-mighty media megas are now being hoisted on their own petards, but they've left a ravaged countryside in their wake where literature is concerned, focused as they've been on killing the midlist, finding the next blockbuster and getting celebrities into print.

    The good news is, the failure of Big Pub opens the door to entirely new paradigms in publishing---including perhaps, for the first time ever, successful publishing models which incorporate advertising as a revenue stream rather than a cost. Product placement and ads bound into books have been tried only experimentally in the past, and without much success. But if product placement can work in movies, why not in books?

    I'd like to be able to capture the realism of one of my characters drinking copious amounts of Diet Pepsi, say, or maybe being a rabid CSI fan, but to do so opens a can of licensing and permission worms. Why shouldn't companies welcome that sort of exposure, and see it as a new advertising opportunity? Instead of paying per click, perhaps companies could pay per book sold or something similar. All I'm saying is, when old methods have failed and new opportunities abound (i.e., POD, podcasting, ebooks), it's time to slaughter the sacred cows and indulge in some radical innovation.

    Reply
  • Posted by Gustavo Pineda
    Mitch Joel

    I think this is a great topic to discuss, now days we have twitter, facebook, youtube, myspace and so on... social networking channels.
    This is a growing process without plan, like a bacterial growth. Like Chaos theory or Fractal math.

    The world is going that will give us as result a chaos consequence of a natural as human are to grow without a financial or potential business plan.

    The best good practice in my opinion is Google, they start free for search free to find but if you want to be the first on the list you must pay. millions of indexed pages are now at Google.

    So far and for good those social sites will be the new TV but the question will be how?

    Easy organized Ideas and filtering trash content, provide the most accurate and quality content will be drive to the success.

    Reply
  • Mitch Joel

    Of course, content isn't free, and the price you pay for it is related to the value it has, either from the content creator perspective or the reader/viewer's perspective. You either pay for it directly, you're exposed to advertising, it is used to build brand value or someone is using your demographic data to build a profile that is eventually used or sold for marketing purposes. Or all of the above.
    Publishers of content have a business to run and need to earn their living... Don't they?

    Reply
  • Posted by Stephen Rothman
    Mitch Joel

    Clearly the times they are a changin'. There is plenty of good content available for free. But the best content that garners large numbers of people who come back again and again will be able to attract advertisers. And that's a good thing. There are cases of blogs that have attracted large enough audiences and advertiser revenues that the blogger has been able to make the blog a full-time profession. And theoretically, at least, that enables the blogger to dedicate more time to developing better content, although there is a time cost involved in managing that business dimension. But in most cases we'll still need new revenue models. One reason is that fragmentation of audience will mean relatively small revenues for most individual content providers, certainly compared to the income old mass-media content providers could demand in "the good old days." (Just kidding.) So that might mean a subsidized model combined with some kind of payment from the audience. At the same time, I can imagine that a Google AdWords model applied to other advertising forms (like videos that the viewer clicks on if interested) might be very attractive to advertisers because of their superior effectiveness vs. the old interruption model. Superior both as a result of better targeting as well as viewer opt-in. I agree with one of the comments ahead of mine (perhaps yours Mitch): of course there's crummy advertising, but the key point is that even "average" advertising isn't an annoyance if it's relevant to the receiver and if it is served up as an invitation to view. That's something that the online space can do much more effectively than the old traditional media channels.

    Reply
  • Posted by Vergel E
    Mitch Joel

    Even if content is free it still takes time for us as consumers to watch/read it. The filters and the monitization of content is where I as a consumer feel the value is.

    Attention costs time and even free content will be ignored if it's not worth the attention time required to consume it.

    High quality content is always worth the attention, having access to trusted filter/montization authorities is where I feel the future of free is headed.

    Reply
  • Posted by Kirk Skodis
    Mitch Joel

    Since we're all reading Mitch's question differently and arguing semantics, here's another angle to consider: Freedom.

    Social Media tools allow the FREEDOM to create content and publicly publish it like never before. And even as content creators bear the brunt of the cost of content (vs. consumers) in time/effort, it is increasingly more "free" to open up new channels (wordpress blog, for example).

    Ergo, we are free to create content. We are free to consume it. Content is FREE.

    Reply
  • Posted by cockrox
    Mitch Joel

    I wonder what Picasso or Leonardo (da Vinci not Di Caprio) would have done in the time of Twitter and Facebook. If artists have been reduced to mere "content providers" whose real task is no longer the mastery of their craft but the mastery of social networking sites in order to create a broader awareness for their "brand" of a probably watered down version of their true art (had they more time to produce it ) in order to keep the content flowing and interest in their site/blog, etc; what then of the quality of the actual content? And all this for free? And if everyone can do this because it's so easy to create your own presence, should they? Is everyone really that talented? Or is there an aweful lot of noise out there in need of a filter?

    Sure you can find lots of good content for free out there. But will we ever see true masterpieces again and if so, how often? How long can and do some of these talents sustain themselves on little or no compensation? And why should it be the birthright of Generation Whatever to have free access to all content 24/7? Because we've set it up this way, that's why and that's all they know.

    Quality content requires quality time to create. And the people who take the time to create quality content should be compensated, as opposed to needing a day job to support their true passion and perhaps true talent.

    I like the subsciption model as a means of compensation for the content provider and a way for their followers to access the content and provide a sustainable future for that content provider.

    The key to changing the prevailing model might be to start a trend whereby someone on high (most popular bloggers, YouTube artist, etc campaigns for this or another fair model by charging for their content and then subscribing to other content sites and blogging about it to their followers; all in an effort to educate the world that free is not necessarily better and help raise the bar out there in cyberspace to a higher level.

    Ramen noodles are cheap, yes and most can afford them. But to taste a fine meal prepared by a chef, made with the freshest ingedients should be experienced if but once to know what is possible. Like the CARD says, "Membership has it's priveleges." Maybe we could all benefit by this membership and raise the bar by following this custom and supporting our online and offline community.

    Reply
  • Mitch Joel

    cockrox -
    You touch on the issue of art, and how artists are to maintain the wherewithal to continue creating. This is a salient issue for authors too, since literary fiction now seems to be in crisis in the mainstream. To big publishers, enlarging the canon of literature is not the priority it once was. In olden times there were actual 'patrons of the arts', who would provide financial support and introductions to artists and authors whose vision the patron believed deserved greater exposure.

    I don't write literary fiction, but I've certainly read and valued it. In today's chilly publishing climate, maybe it's time for patrons of the arts to rise from the ashes once again to back worthy self-published efforts. Either that, or authors of lit fic and other artists will have to come up with some as-yet-undiscovered means of supporting themselves. Many artists have only scorn for commerce, but their very survival---or at least, that of their art---may soon depend on it.

    Reply
  • Posted by Damien
    Damien

    When discussing the future of content revenue models, it always seems to fall back on some version of advertising playing the role of the intrusive slurring bore we must suffer at the bar because he pays for our drinks. I, for one, think advertising should be given some time off to go dry out.

    There's a some other people that need to pony up a few rounds -- the hardware manufacturers and the data merchants.

    As more and more content goes digital, accessing it requires specialized, ever-evolving, expensive devices -- and the cycle is only getting faster. We buy new mobile devices, phones, TVs, game consoles, and iPods every few years. Then we license ever-more bandwidth to get us increasingly detailed content even faster.

    How much money do we spend as a society to just so we can access content? What is a 66" 1080p flat-screen and a THX-Certified sound system good for without someone on the other end making Battlestar to watch on it?

    I'm not saying it would be easy, but if all the content producers could get together and act as a group, couldn't they force Big Hardware into requiring that all devices possess a valid license to access the global content stream?

    Then, once a price for a second of eyeball-time has been established, advertising can come back defray the costs of interested individuals instead of great rooms of people at a time.

    Or maybe that's just wishful thinking.

    Reply
  • Posted by Andy Strote
    Mitch Joel

    Re: Mitch's comment on whether people ignore ads or just ignore bad ads....

    First off, although it's popular to say that people don't like ads, research shows it's simply not true. In fact, in many publications - Vogue comes to mind - ads are a big part of the content. Want to see the latest fashions by D&G - it's in the ads.

    Even "bad" ads are often read word for word. How many of you bought electronics during boxing day sales? How much time did you spend scanning newspaper ads (or retail web sites which are basically all ads) looking for the best deal on that monster TV? Oh I forgot, no one here watches TV anymore .....

    Reply
  • Posted by Steve Martell
    Mitch Joel

    This is a pretty strong debate. I think everyone can acknowledge that 'costs' go beyond cash paid/earned, but I think Mitch was focusing on the tangible as that is what most businesses care about.

    I ran across this thought provoking perspective from Adam Gurri on Chris Anderson's blog:

    "The internet has made it possible for the content industries to look more like the acting industry: people giving away content for free because they enjoy it, while making money with a paying job.�

    Source:
    http://www.longtail.com/the_long_tail/2009/01/guest-post-acti.html

    Reply
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