Posts Tagged netflix
As my involvement on this blog stems directly from my continuous commenting on this blog, the straw that broke the camel’s back, as it were, was Kris’ recent post on Thought Leadership and the Freemium Concept. And although the last thing I want this blog to be is Point/Counterpoint, I would like to build on a few points Kris made.
I’m pretty sure Kris and I are saying the same thing here … that at some point content isn’t the thing that you’re selling; at some point, content is the thing you give away to build the credibility it takes to sell the thing that makes you money (the "solution" in the "B2B solution organization" he mentioned).
Should iTunes be free? To that I’d say 2 things: first, iTunes is the "How," not the "What." Second, the music (the "What") is essentially free these days. Even a few short years ago we had to pay $12-$15 for the CD if you wanted 1-2 songs from an artist. Now we pay $1/track. The revenue from that content is shrinking at an alarming rate. The smart artists have figured out that the songs are the tools they use to lure people to concerts, to get them to buy DVDs, to get them licensing deals in movies and on TV shows. Moby, Sting, Dave Matthews … all of these are artists that understand the value of diversifying away from the canonical content. iTunes/Apple, for its part, essentially gives away the content for free (they take 30% of the tx, spending most of that on infrastructure and delivery costs), with the goal being to sell more iDevices.
Whether Netflix should be free is a slightly trickier question, mainly because they’re not the content producer, they are the content delivery mechanism. I’d go so far as to say that Netflix *has* made the content free; for one flat rate I get as many movies as I can watch (remember that Netflix streaming is no incremental payment and unlimited streams per month). While the major studios have clung to the idea of monitizing the actual movie (ticket sales, DVD sales), Netflix has essentially given away the content in an effort to make money on the delivery mechanism and the idea of "entertainment whenever wherever."
Contrast both those situations with the UK Times, where they are still stuck in the mindset that the content is the thing that’s going to make them money. Sure, the stated goal might be "readership," but there’s not much chance that ad revenue is going to make them any sort of real money. And now compare that to Bloomberg and WSJ, neither of which sell the content so much as up-to-the-minute access to the content. Subtle difference, but both the WSJ and BB are actually making money.
In his book "Free," Chris Anderson goes through exactly this sort of debate. As a matter of fact, when the book first came out, he gave it away, looking instead to make money on the lecture circuit. Jeff Jarvis discusses many of the same concepts in "What Would Google Do?" although he directs most of his analyses towards the Google products (another example of a company that gives away the content in favor of generating revenue through other means).
So I guess my point is that I completely agree with Kris’ closing paragraph and would add that, regardless of whether its B2B or B2C, The Change is already happening. Those that can recognize and admit that the change is happening can adjust and thrive; those that cling to old and outmoded business models will not fare as well.