Or so thinks Chris Anderson. In his new book the future of radical price - so well precised in the July issue of Wired - there is a healthy dose of skepticism that free is the optimal price point. As with his ground breaking theory of the Long Tail, undoubtedly there are categories where his model fits well and others where it is totally inappropriate. Not sure if manufacturers can give away a motor car for free then hope to claw back a return from a cut of the fuel sales. This is exactly how he applies his Free model to music.
In fact free is a very touchy issue particularly when we look at the world of online content. We are going through a time of unprecedented online change where the traditional advertising model funded website is imploding due to a massive oversupply of inventory and plummeting CPMs. No longer can content be made available for free and hope to be funded by advertising revenues. For traditional media this is exacerbated by falling circulations and offline ad revenues as readers stampede online. Surely, we are going to have to develop multiple revenue streams to sustain profitable websites for publishers. Consumer will have to pay for the content they consume however unpalatable this may sound. The groundswell is beginning to establish new paid for models. With the might of Rupert Murdoch behind the movement, something is bound to stick. The subject of another great article this month in Wired.
And perhaps this is not so alien to the consumer at large who has been paying for mobile content on a pay as you go model for years. Anyone remember ring tones? Very twentieth century but a good demonstration of demand-led paid for content. iTunes and the App stores are pioneering the way, and perhaps provide a real guide to how the static web needs to develop a range of paid for content models, before we see a significant decline in the number of websites.
By the way the Wired article is here
