Seth Grossman circulated a link to me this morning saying ” [Here’s] an interesting example of Bought / Owned / Earned being leveraged – Publishers are paying for placement on Kindle using their owned platform of the books they publish to actually distribute free books that get readers hooked on the author to drive sales of other books by the same author. All delivered digitally”.
There are strong parallels with the way of the music industry as well. This article by Mike Masnick about free music content is worth a read. From a content perspective we are going to see an increasingly clear picture emerge in the next 12 months on this subject. Some of the emerging [non] business models of the music industry totally negate paid-for content and instead rely purely on revenue generated from live events and merchandising and potential sponsorships. Mike Masnick’s case study on Nine Inch Nails is also worth viewing though can be neatly summarised as:
Connect With Fans (CwF) + Reason To Buy (RtB) = The Business Model ($$)
Interestingly, movies don’t have that luxury as the performance can never be “live”, so while the studios gloated over the failure of the music industry in the past decade, I think the last laugh may yet be on them partly because their whole business model actually depends on their catalogue and the 60% margins they get from the DVD window and the 96% margins from the TV release window. Either way, there are going to be more opportunities for brands to “sponsor and “own” blocks of content from music/bands, books, films and news.
On a slightly separate but related matter here’s a link to “that note” that created some buzz last month from a 15yr old intern at Morgan Stanley who wrote a very clear consumer portrait of media and device usage for his generation. It has interesting reflection on cost sensitivity of teenagers on using various tools (like e.g. twitter – they don’t use it because it eats into their free SMS’s on mobile…); why they still go to cinemas and their attitude towards banners as well as various other pertinent insights.
So what is Rupert Murdoch’s view? If his newspapers are moving towards a paid-for model, how are they going to compete with “free news content”? It’s all very well to argue for the need for News publishers “to delicately perform some kind of cashectomy on digital consumers” but it is hardly news to announce this without elucidating a more refined solution. In my view the only way he will achieve that is by creating a lot MORE VALUE for consumers on his newspaper sites beyond news content from additional sources such as film, music and books; by that stage it is arguable whether it is the news content or the additional content that consumers are prepared to pay for.
My two cents worth is that we will move closer to the free content model as demonstrated by Kindle, Masnick and the Morgan Stanley intern than we will to Rupert Murdoch’s simplistic pay-per-play model.