• On CBSSports.com: Watch SEC Championship LIVE online!
Click Here
advertisement
The Real Deal : Helping you fight fear, uncertainty, and doubt.
Free media ride is over
By Tom Merritt 
Executive editor, CNET.com
May 19, 2006

Audio and video entertainment on the Web has media execs and consumers clinging desperately to the old ways. Both will have to give up eventually and get used to a new world before we can all take the most advantage of new technologies.
What do you think is the future of audio and video?

It's well covered how music and video companies fail to "get" the promise of new digital technology. They're trying by DRM or legislation to force the continuation of 50- to 100-year-old business practices developed when you had two choices: over the air or in the theater.

What's admitted much less often is that consumers dig in their heels as well. For decades now, thrifty consumers, myself included, could get free content while letting others pick up the virtual tab. My grandfather did it with a mute button, one of his favorite inventions. I've done it with the snack/bathroom break and later the fast-forward button on the VCR.

Old media practices developed somewhat naturally
The old business practices developed naturally. You could make content and broadcast it, but how did you get people to pay for it? There wasn't a very good way to make people pay for it on their end. So the industry innovated, starting with radio. They sold some parts of the content to advertisers, based on how many people heard or saw their content. Consumers couldn't skip the content, so it was a fair trade. The public would put up with being forced to hear the ads, in exchange for getting the content for free. The only friction was when advertisers tried to influence the rest of the content.

There have always been cheats out there, though. Whether by mute, fast-forward, or bathroom, clever folks could get TV shows without paying proper attention to the commercials. Media companies never tried to outlaw the bathroom break or the channel changer, because they understood that enough people saw the commercials to still make money. As a result, some folks got their content subsidized by the attention of others.

New technology frightens everyone
The digital world has the media moguls scared because it's so much easier to skip commercials, and they know that more people will do it. But on the other side, consumers still want their content to be free and "paid for" by the other poor saps who sit through the commercials.

Both behaviors are bunk in the digital age and must change.

People will pay for content
Cable television has proved that people will pay a small amount for better programming, or at least a wider choice. If the broadcasters could have figured out a good plan, they would have charged consumers directly right from the beginning. They went to the advertising model because there was no other acceptable way of charging. The BBC tried the direct charging method by funding channels based on TV licenses. That has worked with mixed success. While the BBC delivers quality programming, there are also commercial channels springing up to fill some gaps.

Direct charging doesn't eliminate commercials, anyway. If you can get people to pay (as in cable) and still be able to add commericals, then that brings in even more money. It works for print media, where people buy magazines and put up with ads as well. But people skip ads in print publications in far greater numbers than in broadcast media. That is, they did, until digital came along.

The copying is the problem
Add to all of this the incredible ease of making copies. This should be a huge consumer benefit, but instead it's turning into an excuse for technologies on our media that are incredibly restrictive. Some of the fuel for this fire is driven by the free content habit. People are used to free content, so why should the Internet be any different? All my life, I've been able to watch TV for free. With the advent of the VCR, I could even skip the commercials and make copies. With TiVo and the Internet, I can easily watch all my shows when I want.

But with the benefit of all this convenience, consumers need to be prepared to give in on the price. Or at the very least, you can't expect others to subsidize your viewing anymore. If you can get what you want, exactly when you want, and in the format you want, then you need to be prepared to pay for it, whether you pay with money or attention.

People laughed at the idea of cable TV at first. Why would people pay for something they got over the air for free? Now 80 million cable subscribers show that people will give up the free if the alternative is worth it. We need to accept a new model. Just as broadcast media had to find a workaround for the fact that you couldn't directly charge the end user, Internet media needs to find a workaround for the fact that the end user can manipulate the files in many ways and easily copy and share them. On the flip side, you can charge the end user directly for the source material. iTunes is doing it right now.

Combat copying with quality
My belief is that you combat the copying problem not with laws and restrictive DRM, but the same way cable won against free over-the-air broadcasts. You give people quality and selection and charge directly. The market will dictate the price that makes paying outweigh the trouble of getting copies. Some copying will even help promote newer shows and should be encouraged. But make the official source reliable, high quality, and easy to use at a fair price, and you won't need any new laws or DRM technology. One reason is immediacy. Right now, people with TiVos still watch shows at airtime, not because they don't know how to record a show, but because they want to see it right away. Content creators still have that very powerful leverage in their corner.

Change the ad model
If direct charging isn't enough, there are still ways to get advertising messages through without compromising my ability to manipulate a file. For starters, there's the tried and true "sponsored by" announcement. You can try shorter, more interesting ads. You can weave in product placement where it doesn't unduly affect the content. All in all, though, you're fighting a reaction to what people are used to rather than to the reality. Folks used to want to pay only for ads on the Web that got click-through. Then the ad agencies realized that a consumer seeing the ad was valuable, and click-through wasn't the only value proposition. So now folks will have to get used to the fact that Internet audio and video work more like a magazine ad. Because everyone can skip the ads, doesn't mean everyone will.

I don't propose that I've answered all the questions or that we'll even see any company brave enough to give it a shot anytime soon. But I do believe that the natural pressure will eventually lead us to this kind of model. It's just the nature of the Internet beast. Unfortunately, it's also the nature of humanity to resist change.

Ever wondered how technology and the Web really work? CNET's Tom Merritt gives you the Real Deal on deals, steals, tips, and tricks.
More commentary
Buzz Report
Molly Wood
Taking a bite out of hype.
Security Watch
Robert Vamosi
Don't get burned by viruses and hackers.
Fully Equipped
David Carnoy
The electronics you lust for.
On Call
Kent German
Solutions for your wireless woes.
Driving It
Wayne Cunningham
What's hot and what's not in car tech.