No More Free Lunch?
Spring Connection Week made one thing obvious: Media companies are desperately trying to figure out how to make money off the Web while not offending consumers who are now fully trained to expect a plethora of free media online. It won’t be easy. The genie isn’t just out of the bottle. He’s dancing around like a maniac, daring anyone to try to put him back in his place. This is a bed that content creators have made for themselves, and they must now lie in it no matter how sorry they are that they “put it all out there” before they had a business model to back it up. Authentication. Entitlement. TV Everywhere. Whatever you want to call it. Will such a system be workable and keep consumers happy enough to not pirate content? Who knows, right? But somebody better figure it out before that dual revenue stream starts to go bust, which will lead to smaller TV show budgets, fewer original programs and ultimately lower TV content quality. That helps no one, including video-happy consumers.
It’s especially interesting that today—only a few days after the Cable Show wrapped up its run in DC—the venerable news agency Associated Press announced that it’s going to come down hard on news aggregators. After all, the newspaper industry (the primary patron of the AP these days) is in serious trouble, as evidenced by all the comparisons cable execs made to it during the Cable Show—usually as a reference for what cable doesn’t want to happen. Well, the AP depends heavily on newspapers. And it’s apparently tired of making its expensive reporting operation so readily available to anyone with an Internet connection.
AP basically plans to take on unlicensed news aggregators that claim “fair use” when they excerpt and otherwise use AP copy to fuel those eyeballs. Fair use is tough. Interpretations of what constitutes it in various contexts has always been murky, to say the least. AP’s planned legal fight could force the issue, although it’s probably counting on coming to some kind of financial arrangements with those it threatens. That would be the preferable outcome. If it eventually lands in the U.S. Supreme Court, any decision could broadly affect all content owners, including those with video assets such as cable nets. This is in the early stages, but the eventual impact of these kind of fights can often be larger than it would seem at first glance. Cable should watch the AP’s next moves carefully.
The bottom line is that premium content—whether print or video—usually involves major costs to produce. And as consumers increasingly find ways to get the content they want without paying for it, more will “cut the cord” to either cable, satellite, newspapers, magazines, DVD rental companies… you name it. For a while, it will feel like absolute Utopia to consumers. Free cable! Free news! But few experts think such a situation could last very long before the creative community simply packs their bags and goes home. Sure, we’d still have content. Many dedicated bloggers would still cover the news—some very well. And indie filmmakers and other creators would continue to make content—again, some of which might very well rival or exceed what the big media companies have created. But the vast majority will be low budget, and much of it will frankly be low quality. Think about the hurdles of trying to make “Battlestar Galactica” on a tiny budget. For the most part, take away the millions of dollars major cable nets put into news gathering and content production (driven largely by cable/satellite subscription fees), and quality will inevitably suffer. It doesn’t mean the world would end. We would somehow soldier on without big-budget TV entertainment. But consumers would eventually long for the old days. And the irony is that they would probably beg to pay for it.
