FREE IS NOT WORTH THE PRICE, Pt 1 of 2

Today’s guest post is from filmmaker Michael R. Barnard.  Michael had written to me on Facebook after I had tweeted about the end of film industry trade papers.  I felt he had some interesting thoughts on the subject, and the bigger issue for filmmakers on the “free” economy.  Today’s post is 1 of 2, with tomorrow’s set to look at the inevitable end from the culture’s embrace of “free”.

The New York Times reports on the malaise hitting the very-important-to-Hollywood trade papers, especially Daily Variety. (See online at http://www.nytimes.com/2010/03/15/business/media/15variety.html?src=twt&twt=nytimesmovies)

Daily Variety is suffering the fate of many news publishers (even the New York Times), but attracts attention because of its reactions to its problems. This important trade paper recently fired staff critics, now favoring freelance critics. The paper is also one of the first to duck behind a paywall. You can no longer read the entire paper online free.

Everyone, including me, chafes at this. The news publishers themselves established their value, and the public always perceives value to be the very least it can be. And for years, the news publishers valued their content as “free.”

So how did news publishers like Daily Variety end up in the non-business of giving away their content?

In the mid-‘90s, I had a routine. I would spend 75¢ on a print copy of DAILY VARIETY from a newsstand, spend a buck on coffee, and sit at the Coffee Bean & Tea Leaf on Sunset Plaza studying the industry in Daily Variety and then pounding out a mediocre script, a thriller set in the time of the Northridge earthquake of a couple years earlier.

I liked that life.

But a few years later, the paper and the coffee cost about four times that much. I stopped my routine.

Thankfully, during that same time, the Internet was beginning to blossom into the “Electronic Super-highway.” The Internet existed before those days, but it was populated by geek-esthetes, academics, and government wonks married to the text-based exchange of statistics, data, and reports.

As the World Wide Web began to overlay the Internet, the denizens were outraged by the commercialism. As the first wave of newcomers arrived on the World Wide Web–using their exciting new Mosaic browsers and 14.4 Kb dial-up modems–they settled in to a new and attractive overlay on the free exchange of information that existed on the Internet.

Soon, the original settlers and the newcomers together had something to rage about: paid content. There was a backlash to any attempt to sell information; there was even a backlash to the very appearance of advertising on the early ‘net.

There had been attempts back in earlier days to offer subscriptions via text online. The L.A. Times and the Wall Street Journal offered simple plain-text versions of their papers online for a subscription fee. But they didn’t work. The explosion of the World Wide Web swept those efforts out the door, in favor of “free.”

And people stopped thinking logically. The appearance of cyber-space clouded the minds of many people, leading them to the conclusion that the entire world had become new. It is proven repeatedly that many people cannot discern the difference between cyber-space and reality. (Case in point: several years ago, cyber-space was convinced that Howard Dean was the next President of the United States. Once Dean stepped out into reality, however, the harsh glare of reality immediately shot him down and dismissed him.)

The new netizens and entrepreneurs were swayed by cyber-space, rejecting reality. They conjured up the “we’ll somehow monetize eyeballs” mentality of the Millennial flip, the illogic that had investors pouring millions and millions of dollars into every site that claimed it could “get eyeballs.” They eschewed business plans for generating income, instead chanting the mantra of “We’ll monetize eyeballs!”

And they offered everything for FREE.

News publishers like Daily Variety started with “free” in this environment.

During the Millennial flip, the belief was that, somehow, everyone would get rich. Many did…temporarily, and from investors’ money, not from value. Until reality stuck its ugly nose under the tent and started sniffing around. The Internet bubble burst and its “somehow we will monetize eyeballs” mentality collapsed.

But FREE stuck around. Why? BECAUSE EVERYBODY LOVES FREE. Of course!

We are now feeling the impact of that un-analyzed, self-serving desire, “I want it FREE.”

Yes, the Internet itself must be free. This past week’s announcement by the FCC that it is switching its official support from the old era of broadcasting to the current era of Internet access is welcome and profound news. The Internet needs to be freely available for the exercise of democracy.

But content is a challenge. We want it free, but it cannot be sustained when free.

The Internet has become the dominant distribution system in the world and obliterates the profit streams generated by old-school “analog” distribution systems and old-school “gate-keeper” systems. Those are crumbling quickly, faster than old-world companies can grasp, much less react to.

The mind-set of the consumer must evolve, too.

Of course, we all want everything for free. Of course!

But we must grasp, and are slowly grasping, the old truism, “You get what you pay for.”

If we do not step up and recognize the true value of quality–again, a value that had been set by the news publishers themselves as “free”–then we will eventually, and sadly, recognize that FREE IS WORTHLESS.

End of Part One.  Part Two continues tomorrow with a look at how $1 is still virtually free, and one entity’s good business is a culture’s eventual demise.

Michael R. Barnard is a filmmaker and marketeer living in Hollywood. He is rushing towards pre-production on his indie feature film A FATHER AND SON (http://AFatherAndSon.com)