Paying for free content

Earlier this week, I noted that book publishers and authors had, so far, been largely protected from the mass copying that has helped to undermine the music recording industry's profits. The reason is simple. You can't copy dead-tree books for minimal effort and cost the way you can CDs or MP3s. But, with e-books finally seemingly establishing a bona fide foothold with Amazon's Kindle, that's going to start changing.

New York Times Op-Ed columnist Paul Krugman notes this trend in "Bits, Bands and Books" together with a corollary that Esther Dyson predicted in 1994:

”that the ease with which digital content can be copied and disseminated would eventually force businesses to sell the results of creative activity cheaply, or even give it away. Whatever the product--software, books, music, movies — the cost of creation would have to be recouped indirectly: businesses would have to--distribute intellectual property free in order to sell services and relationships.”

This, of course, is what a lot of folks--whether as a way to justify music piracy or otherwise--have been saying for years about the business model for music. It's (supposedly) OK if you can't sell a lot of CDs (or iTunes downloads) any longer. Krugman notes that, according to a recent Rolling Stone article: "Downloads are steadily undermining record sales--but today's rock bands, the magazine reports, are finding other sources of income. Even if record sales are modest, bands can convert airplay and YouTube views into financial success indirectly, making money through 'publishing, touring, merchandising and licensing'."

I'm a bit skeptical that selling tchotchkes, tickets, and "extras" in one form or another is really a practical substitute for selling the music itself in the general case. But let's leave that go for the time being. It's been endlessly debated and isn't going to be resolved here. What seems to me even more problematic is the suggestion that there has to be viable alternative models for creative content that becomes de facto free in the general case. For example, Krugman goes on to write:

Indeed, if e-books become the norm, the publishing industry as we know it may wither away. Books may end up serving mainly as promotional material for authors’ other activities, such as live readings with paid admission. Well, if it was good enough for Charles Dickens, I guess it’s good enough for me.

And here, I'm deeply, deeply skeptical. At least with music, there are a variety of revenue-generating activities that are a natural outgrowth of the primary creative product. Most musicians do live performances in any case. The only question is how much money they can make by doing so.

But writers? Sure, some well-known authors make engaging speakers. Geoffrey Moore (author of Crossing the Chasm and Dealing with Darwin) is one I've heard fairly recently. J.K. Rowling just spoke at Harvard's commencement. But just because someone is a writer--even a best-selling one--doesn't make them a good speaker. Indeed, some of the best writers are reclusive and would shudder at the thought of having to make a living by public speaking.

Yes, business models are changing. And all of us will have to adapt in various ways. But let's not kid ourselves that advertising, live performances, or magic money trees are going to automagically pay the bills for creative content that we want to consume but don't want to pay for.

[James7777777]

Creative works do not necessarily need to be free, distribution just needs to be smart.



Digital copying and distribution reduces the cost of business, that cost should be reflected in the price. EBooks/MP3s should be significantly cheaper then Paper Books/CDs.



The Digital copies need to be of high quality and convenient. Things like low bitrates, lock-in formats and DRM only make pirated copies more appealing. If the legal paid for version is the better choice people will pay.



Companies need to embrace their customers, remind them where the money is going, to the artist





The music industry is already screwed as MP3s of an album can cost more then the cd, they only provide mp3s in crippled low end files, and they have alienated their customers with lawsuits and proved the artists make chump change. Publishers can learn though.

[thebenro]

Did you get paid to write this article? Because I certainly didn't pay to read it...

I also read Paul's article for free and I am positive he doesn't write for free. I keep reading articles on freely distributed blogs about how there is no way that anyone could make money giving away creative work.

[ghaff]

Historically, advertising has paid for newspaper staff. Increasingly that doesn't work--for "unbundling" and other reasons. And there are a variety of other reasons why giving away some content may make sense--building brand and awareness as a sideline to a paying gig. And, of course, to a limited degree as a hobby. However, these are all different cases from converting a primary revenue product from something paid for to something given away.

[thebenro]

And historically, most writers would never get published because the cost of entry was too high and musicians gave away music for free to increase the prestige of the wealthy patron who was paying them. Things change regardless of our desires, you have to adapt or be prepared to be left behind.

Actually, the history of the newspaper is a great example. While they make the bulk of revenue from advertising, many charge an additional fee for the tangible good (the paper and printing). Many of them tried to keep this model as they moved online (NYT included) and quickly realized that with so much good competition online, people refuse to pay for an infinite product (digital content).

The internet is rife with examples of "converting a primary revenue product from something paid for to something given away". Think of cook books, how-to books, encyclopedias... These are sometimes brand building or sidelines, but there are plenty of people making (extremely good) money from giving away this content for free. Trent Resnor the musician dumped his record label and made millions selling limited edition box sets and other merchandise (tangible goods) while giving away the music (infinite goods).

You seem to be mistaking "I can't think of a way" with "it is impossible" that writers can make money giving away content. There are quite literally infinite business models out there to monetize free content, some quite likely better than any of the particulars we are discussing here. Even the particulars you dismiss casually are very good models.

You say "some of the best writers are reclusive and would shudder at the thought of having to make a living by public speaking" and to that I say so what? It may sound callous, but just because one model won't work for some of the people doesn't mean that the model isn't a good one, it just means those reclusive writers will have to find a different way to monetize. If they can't find a way, it certainly doesn't mean the system is broken. I am sure that there are plenty of examples of writers who are locked out of the current system for some reason or another completely unrelated to their writing.

The change is happening, whether we like it or not. There are always those who lament "the good ole days" and there are those who adapt, create, and thrive and become quite happy and content in the new ways. Which one will you be?

[thebenro]

Bleh, sorry for the wall of text above, I really did put paragraphs with spaces in, not sure why they didn't show up...

[brienmalone]

Gordon, I'm afraid you are completely detached from the reality of the digital underground. If you want to see the impact illegal eBooks have had on the publishing industry, talk to any publisher of technical books. Those US$40-60 telephone book sized references are copied and distributed across peer-to-peer networks with lightning speed. Fiction is out there, too, but its not as popular.

Amazon's Kindle is a recycled idea that failed years ago. The GemStar REB1100 was a portable eBook with a built-in modem and network jack that allowed you to purchase books online. They actively prohibited people from putting their own content on the ebook -- and frankly, that killed its usefulness. From the reviews I've read, Kindle is on the same locked-down, expensive content path. At $400, you might as well throw a few more bucks in and get a small laptop.