In a Free World, How Can We Make Content Pay? 10.09 2009
By Brian Newman
Speak to anyone in the film industry and it’s clear they are losing not just their wallets but their minds over the threat of free content to their business models, chiefly from piracy but also from ad-supported legal sites. There are zero returns to rights-holders from piracy, and those from other avenues are fast heading in the same direction.
Real money is spent producing this content, and even with faster servers, someone has to foot the bill. There truly is no free lunch, but apparently consumers seem to think otherwise.
Unfortunately the film business hasn’t learned anything from the experiences of music and print, with the Motion Picture Association of America following the example of the Recording Industry Association of America, and the UK considering draconian new intellectual property rules — all to defend a model which is out of date.
Some wish for the good old days, but a quick analysis shows that save for a few — Hollywood, some auteurs and subsidised players — the old system never worked, with everyone fighting over scraps and trying to break out of obscurity.
As Power To The Pixel has demonstrated in recent years at its London conference, digital isn’t business as usual — but who wants more of the same? Perhaps it would be better to take ownership of the concept of ‘free’ and create business models that incorporate it, building the future instead of fighting for the past.
How do we entice people to pay for content they can get for nothing? The key is recognising that in the digital world, there are new ways to measure value. The old model was one of scarcity, but in a digital world it is easy to make a copy, so there’s no scarcity and therefore less value in each copy.
As digital writer and publisher Kevin Kelly argues in his essay ‘Better Than Free’, when content becomes super-abundant, value shifts to those things that can’t be copied, which he calls ‘generatives’. For example, consumers find value in getting something immediately, preferably before everyone else.
So as well as abandoning traditional windows, we should consider offering fans access to films, at a price, before they reach theatres or even festivals. People also value content that is personalised to their needs or tastes, so we could create multiple versions of our content — one might be online for free but the extended cut, violence-free or ad-free version has a price.
These are just two ways we can offer value worth paying for in a free world. Kelly’s eight generatives, all applicable to film (see sidebar), offer the beginnings of a business model that can satisfy consumer demand for free content while returning profits.
It will not be easy for the industry to adapt, because each generative also undermines traditional practice. Right now most of these paths are being explored by DIY indie film-makers who have the most to gain (and the least to lose) from exploiting the new technologies.
The organisers of Power To The Pixel believe the exploration of these ideas can help not just indies, but the entire industry. Perhaps some collective creative thinking will help us all to respond to the challenges brought by digital while building a better system than before.
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Brian Newman is a consultant in new media and former CEO of the Tribeca Film Institute. He will be speaking at Power To The Pixel’s Cross-Media Film Forum (14-15 October).
There are better ways to deal with the threat from free content than clinging to an antiquated business model. Brian Newman has some suggestions for the film industry.
NEW MODES OF VALUE
In his essay ‘Better Than Free’, digital writer and publisher Kevin Kelly suggests eight things for which customers are prepared to pay:
- Immediacy – Receiving a product immediately, or earlier than everyone else.
- Personalisation – Content tailored to the consumer’s needs.
- Interpretation – For computers, this means free software with expensive tech support. In film, it could mean product accompanied by extra materials.
- Authenticity – Receiving a product from source, autographed perhaps?
- Embodiment – The film is free, but there are speaking fees for the college tour.
- Patronage – Direct support of the artist – see rock band Radiohead’s release of In Rainbows, for which consumers paid what they felt the material was worth.
- Accessibility – Making content easy to find.
- Findability – As more content comes online, services that help wade through the junk are valuable.
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Ben Garman Says:
Just read this article in Screen and I found it particularly interesting, and great to see that people in the industry really are addressing possibilities for change to adapt to this digital age.
My own two pence is that something along the lines of what Spotify did for music is needed for film. Or similar to what itunes is doing but much more up to date and with swifter releases, perhaps with a monthly subscription.
For instance, if I knew I would have instant access to stream films that are literally just out of the cinemas whenever and wherever i wanted, just by signing in to my account, that would be a service I would happily pay £25+ a month for. And you could pay more for a premium service of some sort too. There is definitely still a considerable amount of money to be made from film, people just need to start looking in the right places to make it. Piracy is only a threat because in some ways it offers a better deal than any legal options available. As soon as the industry is the one providing the best service, people won’t have a problem with paying.
Thanks for your article though. Perhaps this idea might find it’s way to the right places?!
September 16th, 2009 at 3:31 amScott Walker Says:
Completely agree with Ben: wrapping services around content (which is moving closer to behaving like a commodity or advertising than a differentiated product) is key to monetizing content going forward.
Few industries like what’s happening in this age of digitization and piracy, but reality is requiring changes in business models if companies want to continue to be relevant.
Consumers want content, and most are willing to pay (something) for it. Content creators are challenged with finding at what price and under what conditions they can extract value from the content they produce.
Legislated subsidization will not save outdated business models…
September 16th, 2009 at 9:05 pmDouglas Smith Says:
One of the main problems is that the Cable TV model is now out of date. Cable providers, like Virgin need to jump fully on the digital-downloads on-demand model, using the monthly subscription plan. This needs to be supported by a realisation of the major studios releasing that multi-channel simultaneous releases is simply smart business in this new age. They fail to realise that in the digital world, when you see a trailer, you want to see that film now! Not in 6 months. And when the film is released, and you see it in the theatres, you want to see it again, often right away instead of waiting 3-6 months for the DVD release. Release schedules no longer make any sense and are just representative of an industry that refuses to wake up to reality.
The other untapped opportunity is any serious growth in legal peer-to-peer. Technically, peer-to-peer should enable 100% custom ad-serving embedded within the peer stream. However, no platform has yet to do this correctly. If a robust ad model existed that was non-interruptive, and was supported by fast service and the above mentioned change in studio behaviour, then legal peer-to-peer would replace illegal torrenting.
However, as you can see in both models, the industry needs to change their tune in regards to how they release content before revenues can be released in digital.
September 28th, 2009 at 7:38 am» Blog Archive » 4Docs: “VODO: Is this the future?” Says:
[...] was focussed around questions like the one raised by digital film consultant Brian Newman - in a free world, how can we make content pay? We have to move with the times and stop wasting our energy on battling P2P sites which are, in a [...]
October 21st, 2009 at 12:56 amBBG Communications Says:
Great post. I really appreciate the information. You are doing a wonderful job communicating your message. Keep up the great job.
June 24th, 2010 at 11:58 pm