2024-06-18 18:18:13
Internet pushes the concept of ‘free’ content, supported by advertising advertising/economics/market data/movies/music

International Herald Tribune

“FIFA 07,” a video game for soccer fans, costs around €50 in Europe. In South Korea, five million players have downloaded the online version free — yet Electronic Arts, the publisher, is cheering them on.

Realizing that it was impossible to sell “FIFA Online” in a country where piracy is rampant, Electronic Arts started giving away the game last spring. Once the players were hooked, the company offered for sale ways to gain an edge on opponents; extending the career of a star player, for instance, costs less than $1. Since May, Electronic Arts has sold 700,000 of these enhancements.

In the traditional media world, as well, readers
are turning to free: According to the World Association of Newspapers
in Paris, at least 28 million free newspapers are distributed every day
around the world, 19 million of them in Europe, where the total has
doubled over the past three years. And digital over-the-air TV systems
like Freeview in Britain now offer dozens of channels, providing an
alternative to pay-TV for consumers who refuse to limit themselves to a
handful of viewing options.

Qtrax will resemble illegal file-sharing
networks, using peer-to-peer technology to help users find and download
music. But executives hope that the promise of a licensed, safe and
legitimate service will attract users weaned on digital music but
unwilling to pay for it.

“There’s a whole generation of consumers who think free music is a
birthright,” said Allan Klepfisz, chief executive of Brilliant
Technologies, which is developing Qtrax. “The closer you are with a
business model to current consumer behavior, the better your chance of

Worldwide, media spending by consumers and
business users still handily outstrips advertising, by $944 billion to
$385 billion, according to PricewaterhouseCoopers. But growth in
consumer spending on media in the United States has slowed sharply in
the past few years, analysts say.

Worldwide, PricewaterhouseCoopers expects spending on high-speed
Internet access, which delivers digitized media, to increase faster
than outlays on content that traditionally comes with a price tag —
books, magazines, cinema tickets and CDs, for instance. Global consumer
spending on Internet access is expected to rise at an 11.9 percent
annual rate through 2010, according to the firm.

To be sure, consumer spending on media is not
going to disappear anytime soon. According to a survey of 130 media
executives from around the world, conducted recently by Accenture, 31
percent forecast that subscription models would be the dominant
business model in five years’ time, with 25 percent opting for
so-called pay-per-play funding.

But 37 percent said advertiser financing would be the predominant business model in five years’ time.

Can media companies adapt to a world in which “free is the new paid”?

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