The free content model is all the rage, but what are the implications?

Free has become the revenue model du jour. Of course, RadioHead made waves last week by offering its latest tracks for an optional donation. SpiralFrog has already been offering downloadable music and video for free, with ads. And just yesterday Sprint expanded its free mobile TV selection on the new Sprint Exclusive Entertainment (SEE) channel.

The Sprint offering is significant because it broadens the earlier Power Vision channel, which seemed like an experiment in ad-supported mobile video. Now, Sprint is all in. With SEE it is committing to a full bore mobile video channel of homegrown programming. The channels are populated with repurposed Web material but also hours of material from its own studios and talent. And all of it is free to subscribers.

Free is the new fee. Word is out recently that Wired editor and “Long Tail” author Chris Anderson is working on a new book on this very topic. In fact, he aims to offer the book itself in some form for free. His “Long Tail” blog is beginning to test out some of the ideas.  The argument goes that content makes its money on the back end rather than the front end, via consumer fees. The back end could entail advertising. It could entail merchandising. Last year’s OzzFest concert tour, for instance, was free to attendees because the bands themselves were not paid. Instead, they made back their money from advertising. New ad-supported record labels are rumored to be ramping up, offering bands the opportunity to leverage their music as promotion for profitable concerts.

But the model also raises questions. In a world where advertising supports content so substantially, then how much more clout will marketers demand and get from content providers? On the other hand, how will a free-for-all model  affect content production? After all this is a model Google has used in part to justify its endless beta releases of half-baked products. No one is paying for it anyway, so let the users help develop it. Is this a rationale that could permeate the content production chain if a free model tends to de-value content.

Business models are not just ways of making money. They also affect content production and consumption.

Posted under Michael's Blog