Peter’s Blog

“Free! Why $0.00 Is the Future of Business”

The most common of the economies built around free is the three-party system. Here a third party pays to participate in a market created by a free exchange between the first two parties. Sound complicated? You’re probably experiencing it right now. It’s the basis of virtually all media.

In the traditional media model, a publisher provides a product free (or nearly free) to consumers, and advertisers pay to ride along. Radio is “free to air,” and so is much of television. Likewise, newspaper and magazine publishers don’t charge readers anything close to the actual cost of creating, printing, and distributing their products. They’re not selling papers and magazines to readers, they’re selling readers to advertisers. It’s a three-way market.

In a sense, what the Web represents is the extension of the media business model to industries of all sorts. This is not simply the notion that advertising will pay for everything. There are dozens of ways that media companies make money around free content, from selling information about consumers to brand licensing, “value-added” subscriptions, and direct ecommerce (see wired.com/extras for a complete list). Now an entire ecosystem of Web companies is growing up around the same set of models.

Great feature piece in Wired’s latest issue by Chris Anderson on why everything is becoming free. What Anderson says here about the media business model being applied to more and more industries ties in a lot with what Tom Foremski has been saying about Silicon Valley becoming Media Valley.

And walking the walk, Wired is giving away the print version of the issue (to the first 10,000). US addresses only, or otherwise I would have signed up. Though I got a year’s subscription to Wired free once with my $20 subscription to Salon, so I’ve already benefited. =)

Apple sizes up Europe’s movie-rental market - International Herald Tribune:

After introducing a new online film rental service for American consumers last week, Steve Jobs, the chief executive of Apple, said he was “dying” to expand the program to international markets, adding that this would happen later this year.

Such an extreme sacrifice will probably not be necessary; but in trying to establish European versions of the iTunes movie rental service, which allows users to rent films over the Internet and stream them to their computers or televisions, Jobs at times might feel as though he were banging his head against a brick wall.

Apple will have to confront legal and regulatory hurdles, copyright challenges, scheduling conflicts and technological issues that demonstrate that the European media landscape remains a patchwork of several dozen individual countries - not the single “internal market” that the European Commission envisions.

It might be a funny question to ask, but will Apple (and Commission push-back) be the one responsible for creating a true single market in media in the EU?