Beyond Free – The Cutting Edge Of Business Modelling

Over the last year or so, we have looked quite deeply into P2P and how it impacts content owners. We take the position that P2P is in many respects no different to radio or TV. It provides a great platform for doing promotion on a new title. For back catalogue it represents a more complex challenge, granted.

But that is not the purpose of this brief article.

The story that Tom posted about the impact of Facebook games on media generally prompted me to think about where media is now positioned, what the threats are and what the opportunities are for engagement with consumers.

The fact is that discretionary time is a zero sum proposition. There are only so many days, hours, minutes and seconds in anyone's life. You can only influence their purchase decisions during the times that they spend engaged with media in the environment that they choose.

Since the development of the Internet that has meant that a lot of old concepts had to be thrown away.

One of the ideas that Internet entrepreneurs leaped on was the idea of 'free'. Giving people free content gave media owners and aggregators the ability to monetise content through advertizing – a model that was established years ago with free to air broadcast TV and radio.

And of course Google has become the master at indexing advertising that is paid for with links to content that is free in a way that doesn't step over the boundaries of copyright legislation.

But how sustainable is this model going to be in an extremely competitive world where consumers are running out of discretionary time, and product sellers are looking for revenues – and growth!

Is it now time for the real next phase of marketing – something that is beyond free?

I think that we are soon going to see a model where people are going to be paid for consuming ads. Why not? After all the media owner that owns or aggregates the content and makes it available to the consumer gets to charge for providing the platform. Why not remunerate the punter too? The model of 'free' telephony, funded by interuptive ads, has been tried, and not surprisingly doesn't appear to be taking off. After all, this is a model where the punter has a bunch of annoying messages interupting quality time on the phone with a friend…

I tend to think that the model would be much much more persuasive if the punter got paid for consuming the ads. And how easy would that be? The phone company (in this case) could provide credits to the phone user for actually consuming a number of ads. It isn't that much of a stretch when you think that the people who are playing the games that Tom has been blogging about spend real money to get tokens to buy virtual stuff. But they receive. There is both a real hedonic and economic outcome for the punter. Now, I know that some people will say that “announcement” ads have been tried in conjunction with telephony and failed in the past. But could it be that the value of the transaction wasn't sufficient for the punter? Trade only takes place when buyers and sellers are able to agree on price. So this is a matter of either getting the quantum of the transaction right or the currency. And could it be that a virtual Farmville style currency is a more persuasive carrier of value than a real dollar? To me this is the sort of quirky idea that is worth trying partly because of the cross promotional opportunities that would come from the trial!

Getting paid off with virtual currency as part of a game – That concept, that meme, that habit is being programmed into people. People who play games are going to come to expect to receive things for their interactive entertainment across a wide variety of activities. The company that can provide a micropayment earning capability to punters first, is in my opinion, going to clean up.

Beyond free – people get paid to surf, to talk, to play, to be entertained…

And as the are entertained they become attuned (you might say brainwashed), to the brand, the product and the fact that this brand likes them enough to give them something, however trivial, for their time.

But payment could also be in carbon credits that the punter could accrue and then cash out, through a broker, or potentially could contribute to a charity of his or her choice. This could be a cool play for a company – pay the punter to engage with the ads, to consume the product for this week only…

And think about this from the point of view of building a sustainable relationship with a consumer, where the consumer is materially rewarded for the continuing brand loyalty that they display.

Imagine this in a P2P music world. Where you stop downloading files for free, because the record company will pay you to do it! The file doesn't have an ad at the start of it, instead it has a java pop up capability that doesn't disrupt your enjoyment of the song, but it gets the message across every time you listen to that track. (Not a million miles away from the Big Fat Radio internet radio play that I was involved in just as the tech wreck steamrolled its way round the world flattening us along with a lot of other startups). And it is focused on you! Getting paid to listen. How disruptive would that be to the “pirates” who can only offer “free”?

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