In a free world, how can we make content pay?

Speak to anyone in the film industry and it’s clear they are losing not just their wallets but their minds over the threat of free content to their business models, chiefly from piracy but also from ad-supported legal sites. There are zero returns to rights-holders from piracy, and those from other avenues are fast heading in the same direction.

“In a digital world making a copy is easy,there’s no scarcity. Value shifts to things that can’t be copied”

Real money is spent producing this content, and even with faster servers, someone has to foot the bill. There truly is no free lunch, but apparently consumers seem to think otherwise.

Unfortunately the film business hasn’t learned anything from the experiences of music and print, with the Motion Picture Association of America following the example of the Recording Industry Association of America, and the UK considering draconian new intellectual property rules — all to defend a model which is out of date.

Some wish for the good old days, but a quick analysis shows that save for a few — Hollywood, some auteurs and subsidised players — the old system never worked, with everyone fighting over scraps and trying to break out of obscurity.

As Power To The Pixel has demonstrated in recent years at its London conference, digital isn’t business as usual — but who wants more of the same? Perhaps it would be better to take ownership of the concept of ‘free’ and create business models that incorporate it, building the future instead of fighting for the past.

How do we entice people to pay for content they can get for nothing? The key is recognising that in the digital world, there are new ways to measure value. The old model was one of scarcity, but in a digital world it is easy to make a copy, so there’s no scarcity and therefore less value in each copy.

As digital writer and publisher Kevin Kelly argues in his essay ‘Better Than Free’, when content becomes super-abundant, value shifts to those things that can’t be copied, which he calls ‘generatives’. For example, consumers find value in getting something immediately, preferably before everyone else.

So as well as abandoning traditional windows, we should consider offering fans access to films, at a price, before they reach theatres or even festivals. People also value content that is personalised to their needs or tastes, so we could create multiple versions of our content — one might be online for free but the extended cut, violence-free or ad-free version has a price.

These are just two ways we can offer value worth paying for in a free world. Kelly’s eight generatives, all applicable to film (see sidebar), offer the beginnings of a business model that can satisfy consumer demand for free content while returning profits.

It will not be easy for the industry to adapt, because each generative also undermines traditional practice. Right now most of these paths are being explored by DIY indie film-makers who have the most to gain (and the least to lose) from exploiting the new technologies.

The organisers of Power To The Pixel believe the exploration of these ideas can help not just indies, but the entire industry. Perhaps some collective creative thinking will help us all to respond to the challenges brought by digital while building a better system than before.

Brian Newman is a consultant in new media and former CEO of the Tribeca Film Institute. He will be speaking at Power To The Pixel’s Cross-Media Forum (Oct 14-16). See powertothepixel.com for more.

There are better ways to deal with the threat from free content than clinging to an antiquated business model. Brian Newman has some suggestions for the film industry