Chris Anderson, in his new book Free: The Future of a Radical Price, argues that people under the age of 30 no longer expect to pay for news, music, TV, films or social networking. He suggests two models for digital media businesses to adopt if they are targeting this age group: 'freeconomy' and 'freemium'.
Businesses operating the freeconomy model, such as Google, provide content for free and generate revenue from advertising on the site. However, Anderson acknowledges that this model has lost its appeal since the onse of the credit crunch. He states "From the middle of 2008, it became clear that advertising was going to be limited. It was not going away, but it was not going to float all boats."
The other 'free' business model is freemium, in which the basic service is free and subscibers are encouraged to upgrade and pay for additional services. Fickr, the photo sharing site, adopts this model. Basic subscribers can upload images for free, but they are restricted to 100mb storage a month and access to smaller-sized images. Premium (pro-account) subscribers pay approx £17 per annum to store an unlimited amount of photos and are able to download images in their original resolution.
Spotify, which has been discussed in this blog twice previously, is an interesting case as it mixes both models. Subscribers can stream music for free, with ocassional adverts between tracks. But, by paying £10 per month, they gain access to the premium service and can listen to the music uninterupted by adverts and can also use Spotify on mobile devices.
Of course, the major battle that has raged over recent years, as a result of this changing social demand for free digital media, has been between the companies who own the rights to popular music and the generation which is using BitTorrant sites to share free copies of the music. Pirate Bay, with 20 million users, has been at the forefront in this battle. In April this year, its founders were jailed for breaking the music copyright law. Would this event signal defeat for free file sharing? It appears not. Pirate Bay has just been bought by Global Gaming Comapny for £4.7 million and has devised a new free business model. More of that next time.
Note:
The title is a line from the John Lennon song Love from the Plastic Ono Band LP (1970)
