The traditional publishing industry is developing strategies to counteract the adverse effects that digital-content providers like Google and Amazon.com are having on its business. Among other things, publishers facing plummeting sales of physical media and advertising are expected to assert more control over when, where and how their content is made available.
However, Forrester Research Vice President Mark Mulligan believes today’s pervasive free content means paid content is no longer king and the traditional media meltdown will continue through 2010.
“As the contagion of free continues to infect everything it touches, the old media business models and products are on borrowed time,” Mulligan wrote in a recent blog. “Only with a new generation of media products that play to the relative strengths of the various digital platforms will new successful media business models be built.”
A Multitiered Model
Mulligan advises the media industry to align its content assets with current consumer behavior and demand by adopting an entirely new framework for media products. “Just erecting a pay wall around your existing content will simply drive the vast majority of your audiences to the nearest free alternative,” Mulligan warned.
Content scarcity may be gone, Mulligan observed, but high-quality, unique content experiences are extremely scarce in the digital arena. “When they exist, they prosper,” Mulligan wrote.
Mulligan proposes that publishers follow a three-tiered model to monetize their digital content that consists of free, subsidized and premium content offerings — a model that Amazon is already following. Beyond offering free books and low-priced best sellers, Amazon recently announced that it will offer exclusive e-book deals on the latest releases from best-selling authors such as Stephen Covey.
However, Gartner Vice President Allen Weiner thinks exclusive e-book deals send out a bad message to the majority of publishers not on The New York Times best-seller list….