Posts tagged ‘free’

The Brand Companions Hypothesis: All media will be free for high-value consumers.

Now and again, I like to try to imagine how media are likely to change in the future. Today I was thinking about what I’ll call high-value consumers–people with a lot of disposable income who tend to purchase products with high margins. Is it possible that a group of brands (i.e., the consumer’s constant “brand companions”) will come together to “sponsor” the media consumption of such consumers so that they no longer have to pay for cable TV, internet access, satellite radio, etc?  What if, for example, BMW, Heineken, Whole Foods, British Airways, Exxon,  Apple and Costco pooled their consumer intelligence data and together ascertained that consumers of a certain profile were extremely likely to use all of their products? Would it not logically follow, then, that these brands would want to do whatever is necessary to ensure that they get a hammer lock on said consumers’ wallets? The best and most effective way to do this would be to block other advertisers out of their lives as much as possible. They could do it by picking up the tab for whatever media these consumers use, and for high-value consumers, the math could make sense. 

Of course, different groups of brands would emerge and align themselves with consumers of various profiles; that goes without saying. What bears some more thought, however, is how this kind of arrangement would change the advertising the consumers would see. If brands “own” consumers, will there less hard sell and more of a partnership between the brand and the consumer?  Will less advertising suffice? Perhaps only PBS-style announcements that “the following program is brought to you by your friends at BMW, Apple and Whole Foods” will be more than enough. Perhaps even more to the point, will your free cable TV get yanked away from you if you buy a Lexus instead of a BMW? It probably should.

Also, what will be the effect on consumers who aren’t part of these groups of high-value consumers that are rewarded with free media? Will they do whatever is necessary–including buying brands they can’t really afford–to reap the benefits enjoyed by others, or will some other system evolve to serve them?

I think this is a fascinating idea. Please let me know if I am alone.


March 23, 2009 at 1:20 am 2 comments

Give your product away for free or you may go broke.

Free It isn’t a new topic, but it’s worth revisiting as it’s a tough one for companies and their agencies to get into their bones. This is not surprising. Telling a businessman he must give his product away in order to make money sounds absurd on its surface. It brings to mind Clov in Waiting for Godot, who famously said: “If I don’t kill that rat, he’ll die.”

If we look at the topic a little more closely, however, it becomes  less absurd. Indeed, it almost makes sense. As we move from an economy of scarcity to an economy of abundance (think digital assets with zero marginal cost of reproduction), how do you make money by giving something away? Increasingly, this is the central question more and more businesses will have to answer. And getting the answer wrong–or worse still, ignoring the question altogether–will earn you an express ticket to failure.

Media and the means of distribution are stronger than any one company or industry. You can’t fight them. It’s like opposing plate tectonics; there’s no point to it. Driven by these media and distribution forces, certain products “want” to be free. Consumers are smart enough to figure this out. Disagreeing with consumers about which products “want to be free” is, in the words of my junior high football coach, “like pissing up a rope.”  In other words, it is not recommended.

Here’s a link to an article from Wharton that should tide you over until Chris Anderson’s new book, Free: The Past and Future of a Radical Price, comes out in July.

March 9, 2009 at 12:00 am Leave a comment

Don’t Try to Save Your Newspaper. Try to Save News.

Walter Isaacson has been out flogging his Time magazine cover story, “How To Save Your Newspaper.” Last night he was on the Daily Show with Jon Stewart. I’m not sure which made me feel more tired–reading his article or watching him as he offered a poorly thought-out “solution” on televison. His big idea, which boils down to micropayments in exchange for content, betrays a profound ignorance of how people use the internet to consume news in the 21st century. Of course, this should not surprise us, as the story was commissioned by a news weekly, which, in an age of instantaneous information, may be the only form of media more archaic than a daily newspaper.  

How to save your newspaper is the wrong question. The very idea of a newspaper is, for all practical purposes already dead. The right question is where will quality reporting come from in the post-newspaper (and post-television) news eras? I’m not sure we know the answer yet, and it’s a damned important question, since an energetic and meddlesome press is absolutely critical to the health of any democracy. I have no doubt that maverick reporters will continue to break an important story now and then. But when we take away the business model that has historically supported news-gathering operations, will what passes for news in America be dumbed down even more than it already has been? Will the number of reporters who can afford to spend months in pursuit of a single, complex story dwindle to a handful?

The question the news industry must answer is how will it monetize “free”? It is the same question that Chris Anderson of Wired has identified as central to the new digital economy of abundance (as opposed to the analog economy of scarcity). And will there be such a thing (singular) as the news industry, or will it be fractured into thousands of pieces by the democratization of technology and the destruction of old business models?

For more on Mr. Isaacson and his regrettable ideas on the newspaper industry, visit Techdirt.

February 11, 2009 at 2:21 am Leave a comment


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