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People Won’t Pay for Content, Right?

January 26, 2011 | Author: Ibex Marketing

Ah, the wonder that is the Internet, where you have access to all the content in the world, and it’s free. And for those parts that aren’t free, they should be free, right? That seems to be the attitude of a lot of people, and I agree that there is a lot of good and generous work that has been done in the spirit of free content on the Internet. I’d include Open Office, the enormous universe that is the Linux operating system, and the wealth of content available through the Creative Commons License.

But I don’t believe that all content can — or even should — be provided for free on the Internet. The content creators deserve the right to ask for and get compensation for their efforts. I don’t think that Netflix is evil for charging $7.99 a month to access their streaming content; they have had to pay the content producers for the rights to share that content, and this would not have happened without subscription fees.

Perhaps the best empirical example is iTunes. Keep in mind that when Apple first created the site, pirated music sources dominated the distribution of commercial music on the Internet. Many thought Apple’s experiment was doomed to fail because people wouldn’t pay for something that they could get for free. And those people have been proven wrong. Last weekend, the total number of downloads for the site passed the 10 billion mark. Yes, that’s “billion” with a great big “B”! A conservative estimate of $10 billion in revenues (some items cost more than the standard $.99) shows that there is an important incentive for the content producers to participate in this and other digital download distribution services.

I believe that the average American consumers are not looking to get something for nothing. They are willing to pay a reasonable fee for good value delivered. And it has been proven that they are willing to pay for digital download and streaming content. The models are changing, and content producers should be able to find money in this system to support the continued creation of quality music and video content.