Make Money Around Free Content – Why $0.00 is the Future of Business

* Image courtesy of www.treehugger.com/us-money-photo.jpg

 Fred Wilson discusses the media business model in, ‘Make money around free content‘.

Wilson explains how both media and most online businesses are based on ‘software economics‘, where the cost of creating something of value is relatively high, but the marginal cost of distributing to each consumer is very low.

Generally, when people think of the ‘media business model‘ they usually just think of advertising, but Wilson explains how it goes far beyond that in his list of all the revenue models that can be found in the media industry, all based around a core of free or almost free content.   

Chris Anderson in ‘Free! Why $0.00 is the future of business‘ discusses how the rise of freeconomics is being driven by the underlying technologies that power the Web, such as the cheap price of bandwith and storage.

With more people turning to the Web as a news medium, broadcast commercials and print display ads have given way to a blizzard of new Web-based ad formats, such as Yahoo’s pay-per-pageview banners and Google’s pay-per-click text ads.

These approaches are based on the principle that free offerings build audiences with distinct interests and expressed needs that advertisers will pay to reach.

Advertisers are now more able to aim advertising at certain demographics, thus place more advertising on the websites of news organisations.

“The ability of technology to track readership of specific stories has given editors a powerful weapon in future financial battles, for the first time making an indisputable link between strong editorial content and the kind of higher readership that attracts advertisers”, (http://journalism.org/node/11977).

The Future of Media Report informs us that 37 per cent of consumers would rather pay for online content than be exposed to advertisements, I know that I certainly would.