The Wiki Man

9 May 2009

A fortnightly column on technology and the web

The ‘Free’ model falls down when — to extend the pub metaphor — people turn up to use your gas barbecue and bring their own drink. Or when a rival opens an off-licence at the bottom of your beer garden selling beer at a discount. This sounds absurd — and in the real world it would be. In the digital world it happens all the time: the money is made in one place while the costs fall somewhere else altogether.

So when broadcasters allow internet users to download films or watch high-definition television programmes online, they pocket the revenue while the costs of providing the extra bandwidth fall to your internet provider. Is this fair? Equally, is it right that Google make money by directing people to a web page while the people who wrote the page earn nothing?

Much of this misdirection of money has arisen because of a widely held assumption that people won’t pay for content online. And yet, as Apple’s iTunes music store shows, if you make it easy enough, it isn’t impossible to get people to pay smallish sums quite readily. Although some online newspapers tried charging for their content and then abandoned the attempt after readers fled, it isn’t clear whether their readers were rejecting the practice because of the cost or because of the hassle involved. It’s time people gave the idea of micro-payments a second try. After all, if Susan Boyle had earned only a fraction of a penny from each of her 75 million views on YouTube, she would have enough to keep her cat Pebbles in hand-reared organic mice for life.

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William

May 11th, 2009 12:38pm Report this comment

This is a very interesting article, Rory.

Unlike some, I don’t believe in the death of the music industry. The two main expenses of the recording industry – recording and distribution – have been dramatically reduced in the computer age so costs are down and people still want to make music and still want to listen to music. How do you get the two to match up? One of the key issues, as you say, is to make it easier for people to buy music. Apple’s iTunes store is tremendous in this regard and with the spread of gadgets like the iPhone then buying music online or through your mobile phone will only increase. There could be future tie-ins with merchandise, concert tickets, etc. You buy a couple of cheap MP3’s and are offered concert tickets, T-shirts, etc. by the artist. Make it easy and people will click and buy. Make it difficult and they’ll navigate away.

The only thing I would add is that the savings in distribution costs isn’t always passed on. You can buy an album for £6.99 from iTunes or buy it for £6.99 on the High Street. How so? The iTunes album should be cheaper as there is no CD cost, no printing cost, no distribution cost. It’s this kind of feeling of being slightly ripped off that annoys people. Yet people are generally honest. You will always have a hardcore of people who will want music and other content for free but most people are happy to pay for something that they like so make it easy for them! When record companies were complaining about Russian websites offering MP3’s for 10p or 20p part of me asked why they weren’t offering low-cost MP3’s themselves? I’m not excusing Russian piracy but you have to be flexible and consider if it’s better to sell more for less than sell less for more.

I’ve always considered it madness for newspapers to offer their content for free and then wonder why hardcopy sales are declining. Yet I subscribe to The Spectator when I could easily just view it online every week for free? Why? One is that I like The Spectator so I want to support it and keep the content coming. I also like to have a hardcopy version of the magazine. I don’t really feel that way about newspapers. Would I take out an online subscription to a newspaper? Possibly. If it was the right price. Or they could let me buy access to a particular section/article for, say, 5p. If I want to pay for The Guardian’s sports section but not its’ politics why can’t I do so online? At the moment, I get it free anyway! However, I may want to support the writing of Kevin McCarra but not the writing of Polly Toynbee. Again, they have to consider that something is ALWAYS better than nothing.

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