The future of free web (take 2) in software and content

I had posted previously that the free web has to move towards a paid-for-content web model.

It has to happen for most blogs, newspapers and other sources, which provides content for free. Free content will still exist in niche sectors like people who post content for free out of love or to spread a cause or the few who can sustain on advertising revenues. However by and large companies will be forced to move to subscription model for web content.

Today we see large-scale adoption of the tenet of providing free content by newspapers, even prestigious ones like New York Times. It costs to produce original content and to get from various sources like AP and Reuters. The same is true for software. You have to pay the developers, for the facilities etc.

The Wall Street Journal experiment suggests the contrary. About 700,000 people subscribe to its online edition, with 300,000 of them subscribing to the Web edition only and 400,000 subscribing to both the online and print editions. The print edition has 1.8 million subscribers.

Content is the King. WSJ has a high value in the financial market for its content and people are more then willing to pay for its unique content.

“If you have strong value, people will pay for it,” said Todd H. Larsen, president of consumer electronic publishing for Dow Jones, which owns The Journal. “There is nothing so magical about the Internet that everything has to be free.”

Source: New York Times

This is true for news as well as software. People pay for good software even when free alternatives exist. However free options definitely serve to dilute the market value.

Newspapers will have to charge. However it cannot charge for traditional news. It can however charge for unique content produced through investigative journalism, in-depth coverage of events and sports, financial analysis etc.

The key challenge is identifying the customers. Some customers like me will think thrice before paying for a software or newspaper. However even I do pay for some software where the value overwhelms my desire to save. Fortunately we may be in minority as far as software industry goes.

In software normal business users are more likely to spend to get quality product and support from a reputed company. The prevalence of enormous choices in open source arena coupled with high noise ratio (bad products versus good products) is forcing more and more users to move towards the old business model.

Free content will force newspapers to produce more unique and interesting content to survive. Free software will force companies to produce higher quality product. Overall free is an wakeup call for the industry. Customers today are more aware then ever before. You can still pull of a Google. However you have to provide strong value as Google does.