Free ain't what it used to be

It seems like ‘Free’ may not be the future of business after all. It certainly doesn’t seem to be working for media.

The new book from Wired honcho Chris Anderson is imminent. Called ‘ Free: The Future of a Radical Price: The Economics of Abundance and Why Zero Pricing Is Changing the Face of Business’, it’s currently available for pre-order from Amazon. For £11.39.

A couple of weeks ago, Rupert Murdoch announced that News Corp was to charge for their news websites. Stung by profits falling year-on-year from $216m to $7m, Murdoch admitted that the free model is ‘malfunctioning‘. Put simply, there aren’t enough adverts to pay for the content.

Meanwhile Murdoch’s own freesheet, TheLondonPaper, recently announced losses of £12.96m for the last year – down from £16.48m in its first year, but still a nasty red mark on News International’s books.

Fortunately Murdoch has deep pockets – as do his rivals at Associated, which publishes London Lite. Which is bad news for the UK’s other newspapers, already struggling with high costs, plunging ad revenues and falling circulations.

It’s happening in magazines, too. Last month, Sport magazine – one of the free weeklies distributed at stations and street corners – suspended publication. A takeover by Talk Sport owner UTV will see the magazine re-appear in the summer, but the notion that ‘free’ is the future of publishing seems to have been damaged.

Meanwhile the music industry is finally waking up to the power of free on internet, a decade too late to stop the inevitable implosion. Now that PRS has reduced its streaming rates, it’s possible that music services like Spotify, Last.fm and Pandora will find a sustainable business model – but they’re still chasing the same diminishing advertising buck as the newspapers. There’s money out there – but, as Stuff’s commercial director so eloquently – if inadvertantly – put it last week, “how much is money?”.

And let’s not forget that the same pot of advertising money is increasingly going directly to Google, which happily pockets the profits in return pointing people to other people’s expensive but ad-light websites.

Which is why the drive towards free only seems like great news for consumers until you think about quality.

A music industry nurtures and promotes new talent. Yes, most musicians do it for love, but without record company backing, The Beatles and The Stones wouldn’t have changed the face of the 20th Century. And Radiohead wouldn’t be able to reach a massive audience and ask them to pay whatever they wanted for In Rainbows.

And a newspaper industry helps to police our democracy. Would the MPs expenses scandal may have come to light if The Telegraph didn’t exist and we had to make do with Metro instead?

And a magazine industry? Well, that puts food on my table and gadgets in my pocket.

There’s no avoiding a radical reshaping of the media landscape. For all the pain, I’d argue it’s a good thing – too many people have been paid too much for doing the same old things without a true creative vision. But the recession might prove to be the saviour of paid-for media. Without advertising revenues, free publications – and websites, and services – will struggle. There’s only so long you can continue with the ‘let’s hope Google buys us’ business model. Anderson’s notion of ‘Free’ is eloquently argued, utopian and highly appealing. It contains some useful truths. But I can’t help thinking that it’s the froth of the second internet bubble, and that bubble has already burst.

You can read Anderson’s original Free feature from 2008 – back when it all made a lot more sense – over at Wired.com.

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