Is 'Free to Consumer' the New Model?

Free is becoming a new business model that is causing many established players in many media sectors to rethink life.

The music sector certainly is starting to adopt the free, ‘advertising paid’ model with producers such as EMI and Universal licensing their total catalogues out to the likes of Spiral Frog and others. They didn’t have lots of choice being outmaneuvered on all fronts by both pirates, and consumers.

The newsprint world has long had the ‘free local rag’ but these are now seriously growing in terms of circulation and ad revenues. The Metro is generating in excess of £8m profit a year and it is claimed by its MD that it will overtake the circulation of the Daily Mirror within 12 to 18 months. We only have to see the litter on the underground to believe that claim. By increasing its distribution it copies circulated rose to just under 1.4 million in October, an increase over the previous month of 10.6%. In contrast, the Daily Mirror, Britain's third biggest-selling daily, sold an average of 1,525,477 copies a day in October, a fall of 4.68% year on year.

We have recently seen the wall Street Journal declare the end of its highly successful online subscription model. It is hard to envisage the subscription online model surviving.

Then we have Joost and the free over internet TV. We highly recommend you download the beta an experience the next TV generation on the Internet it is very impressive even if the content today is limited. It is free and brought to you by those smart guys who invented Kazza and Skype, so they probably know a thing or two.

In China we have written about BookGG and their free ad paid books. It may not work in the West, especially with moral rights but is an example of the ‘free to consumer’ model.

So what will happen moving forward? What is certain is the business models are changing and the only thing that is certain paying for digital content by traditional models is under threat.

Books for Free?

Books for free where everyone gets paid, author, publisher and retailer! This may sound far fetched but it is happening today. The money will not come from the consumer but from the likes of Ikea, Walt Disney, Nike, Pepsi etc. We have seen the emergence of the advertising model all over the internet from Google to social networking sites, we have seen it spread to the music industry through new ventures such as Spiral Frog. Well now it could be entering the shelves of bookselling!

We have seen and reported on the move to bring an advertising based model into the medical journal market but this one is different in that it is customisable. The consumer selects the advertiser!

Shanghai-based Bookgg is exploring a new advertisement powered free book business model. The consumer selects the book and then selects the sponsors with their placement on your book until the price of the book drops to zero. The book is then printed and posted.

For every free book, you need to have a book ticket, which you get once you have registered. You then earn further book tickets by referring new users or orders or buying into an account, which will issue new tickets every month.

Every advertising sponsor can only be selected by an individual once so promoting you to spread your sponsors and in effect find out about others. The sponsor receives all personal information.

Finally the books are printed on demand by Bookgg and contain your sponsors adverts.

So does this make sense? In the Chinese market it probably does fit with both their culture and also the exploding distributed POD market where many bookstores are using POD technology. But will it influence the western markets? It is novel but raises many questions on copyright, royalties sales tracking and accountability and the author could have serious concerns about exactly who they wish to have sponsor their work.