The Future of Media (continued)

One of my basic assumptions about digital media is that it wants to be free and the consumers want it to be free.

I wrote the following in my initial The Future of Media post:

Leaving aside the rights issues, which I know are large, if I were a
television executive right now, I’d take my content, microchunk it, put
a couple calls to a video ad server in the middle of it, and let it go
whereever it wants to go, safe in the knowledge that whenever the show
is viewed, I’ll get to run a couple 15 second spots in the middle of it
(which I could change whenever I wanted to and which I could measure).

That is not what the TV execs are doing for the most part. What they are doing is putting Desperate Housewives up on iTunes for a $1.99 download or reruns of I Love Lucy on Google for a $1.99 download.

I think that’s not a mass market service. I’ve watched I Love Lucy for years for free in my home, I’ve Tivo’d it and can go back and watch it anytime, and I am not excited about paying $1.99 to download and watch The Courtroom episode.

What I am excited about is downloading The Courtroom episode for free from Google, Yahoo!, iTunes, and whereever else it may be made available. Then cutting and pasting it to get to the scene I love and then posting it on my blog for others to do the same thing with it.

Free content without rules (DRM) is The Future of Media.  The business model will be advertising and its coming, quickly.  Where we are now is an interim step because nobody is yet willing to make the leap.  But someone will soon and they will be rewarded for it with a advertising market that will compare with and possibly beat the size of the paid search market.

But I have been saying this for a while now based mostly on gut instinct.  Now we have some research to support my thesis.  Yesterday MediaPost published an article about a consumer survey on these exact issues.  The headline quote is:

consumers, almost three to one, would rather see commercials than pay a fee–$1.99 a download

The numbers are even more telling in the all important 18-24 age group (who is the future of media):

Consumers 18-34 prefer free, ad-supported
content 68 percent of the time–as compared to 26 percent, who prefer
to pay a fee. Five percent of those consumers were undecided.

And the notion that just because you’ve paid for the content you won’t see ads is a false hope.  Just yesterday, Mel Karmazin was quoted as saying that Sirius will sell over $600 million in advertising this year on its PAID sattellite radio service.  If you think you are going to avoid ads by paying for content, you are wrong about that.

But paid content online is a niche business.  Free content online is a mass market business.  How many websites require a subscription?  Very few. Why?  Because content on the web wants to be free.  Links are the essential currency of the web and when you click on a link and get asked to pay, most of the time you move on to something else.

The big media owners don’t get this right now.  It will take a while of flailing around with paid content models before someone follows the four rules of The Future of Media.  But when they do, they will end up with a very large business quickly and the others will follow.

That’s my prediction.