Content versus Income

I’ve been mulling over why it is I feel that Murdoch’s strategy for closing off content for subscription-only access is such a bad idea.  It sounds like an odd thing to do; those of us deeply associated with social media actually understand intuitively that it is a Bad Thing, and that there are a whole range of reasons why it’s bound to fail. Indeed, there are countless articles covering this subject out there that explore these reasons (often from a technical and financial perspective) in detail.

But I think there is room to consider this further; I think it’s about a fundamental shift in property and revenue generation.

Essentially, value has previously considered to be embedded in content property.  Copyright and other property-oriented laws grew up around this essential notion, and income has been generated through consumption and sale of copies of content.

I’d argue that there is still value in content. But I think from a consumer perspective, value is now shared between the content itself and the means of accessing relevant content.  Indeed in a period of spectrum and content abundance, highly personalised and high quality content becomes a scarcity and the provision of efficient access to such content is greater than the value of the content alone.  Thus instead of content property, we have shifted to a period of valuing content and context.

But that’s not the end of the story, either.  Not only do we value efficient access to the right content, we expect to be able to access that content as part of a service benefit.  Note that’s key: service benefit, not the service itself. We are less willing to pay for content property and more willing to pay for service access.  My major problem with notions of Free as the future of business, is that it is not a business model, and never was, and that there is clear evidence that professional content property markets are in decline, not being assisted by emergent media.

Murdoch gets most of this, but he is assuming that content quality is a service itself.  It isn’t.  While News Ltd might provide ‘quality’ news reporting and opinion, it is essentially undifferentiated in its quality from competitors in the marketplace, including high quality amateur content creators (citizen journalists).  It is therefore merely a service benefit.  It might be content property, but almost imperceptably the economy of content has shifted from content property to access/context.  What we pay for is not generic content nor even the navigation to that content (there are numerous content and data handling tools that we can use to customise content search to meet highly personalised needs), but rather the devices and gateway to the internet, as well as highly specialised, high quality (and generally rich media) information on demand, and on a micropayment model.  Newspaper content doesn’t have either the longevity nor the exclusivity to be regarded as valuable enough to pay for.  It’s not an experience, and it’s not sufficiently personalised to be anything the man in the street would consider lengthy or rich enough to part with micropayments to consume.

The broadcast model (a few organisations, transmitting limited content to a vast audience) is no longer a relevant income generating model for business.  There is more content than ever before and there are more producers of content, and audiences are less concerned about content quality as entertainment and personalisation value.  And, on top of all that, advertising in traditional media is declining, as companies seek ever-more-efficient means of generating hot leads for product sales.

I’m not suggesting broadcast (radio, television and print) media will die – far from it – but the business model for content production and access is shifting dramatically.  Income isn’t generated from content property anymore. It’s generated by devices for accessing content – the physical goods (not the software) we need to access content – and from broadband access.  That’s it.  Everything else is either created and shared by the community, or it is kept behind a thin layer of micropayments for viewing/engaging on demand.

That’s why Murdoch’s strategy will fail.  It’s not just filters and content navigation alternatives that will kill the idea.  It’s his belief in content as property that is blinding him to the investment opportunities available in networks and devices for interaction.

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