The end of the free?

“We are in the midst of an epochal debate over the value of content and … for many the current model is malfunctioning … The inchoate days of the internet will soon be over”, claimed Rupert Murdoch last month.
The NewsCorp chairman announced plans to charge for content on most of his internet sites and questioned the rationale of the gift culture of the internet by calling it a “flawed” business model,
This to my mind, represents the unease with which that the old guard of media tycoons face the open, collaborative culture of the internet.

Frau Meigs(2007) describes two alternative business cultures that have emerged on the web: the information provider model (Microsoft, Intel, Apple, etc) and the open economy characterized by collaboration, cooperation and sharing.
The collaborative model of content production has posed a threat to the traditional media business model of mass produced and protected content suited for the needs of mass audiences. The fact that, on the internet, information can be transferred, modified and downloaded poses a risk to traditional revenue streams for these media companies who, for decades, thrived through controlling releases and distribution channels. The initial reaction of the industry was to impose heavy penalties through strict copyright laws and penalties.
While the rights of the content producers and their due rewards must be recognized, with the sharing culture of the internet, many content producers have started evolving their business models creating communities around their brands. For example, band Radiohead released their newest album free for download in order to circumvent illegal downloads. In the process, they generated publicity for their album, recovered their costs through concerts, merchandise, and most importantly secured an increased loyalty from their fans. Asserting only their moral rights through the creative commons license, this has created pattern of “dot-communism” ( Wired Magazine, 2009) among other artists who have adopted this strategy.

So, will the next new economy, the one arising from the ashes of this latest meltdown, favour the shared notion of content production?

There have been numerous online content producers that have successfully able to monetize their products. Gawker (the online publishing aggregator) and Spotify ( a music sharing website) are some. Apart from this, traditional newspapers, like the New York Times and the Wall Street Journal have developed a business model where they give a part of their content out for free but require users to sign up and pay for premium services and have developed a sizeable subscriber base.
Striking the balance between free content that is popular with audiences and maintaining a profitable media business has been one of the biggest challenges that the media industries have had to face in decades.
However, transnational media corporations like Viacom, Universal, Newscorp have been around far too long to adopt this approach quickly. Some have sought to balkanize the internet through the acquisition of insurgents to reestablish the status quo through new media. We are still to witness to a large scale shift of a traditional media company's successful adoption of the open economy of the internet.
Murdoch's recent statement shows an unwillingness to shift. Although, with the evolving expectation of audiences and the pattern of convergence in media industries, the time will soon come where he needs to keep up or be left behind.