October 3rd, 2007
Open source tells content owners adapt or die
Open source offers a business model for software which gives consumers more control. They get the code, they can see the code, they can change the code, without ever paying you a dime.
That they do pay you, that they pay you enough for you to make a business function, is the great business miracle of our time, resulting from the Internet dropping marketing and distribution costs to near zero.
This column is also an open source business model of a sorts. You’re not paying me to read it. You can talk back to me, and you can even get changes made if I misspell something, get something wrong, or there’s an update. The ads pay the bills.
This, too, is a function of the Internet’s low, low low distribution costs. The success of this model can be seen in The New York Times‘ decision to drop their paid TimesSelect service. The company said it was making $10 million/year from subscriptions but felt it could make more giving away access, from advertising.
Now we’re seeing musicians embrace the open source concept. In effect, groups like Radiohead are “busking” on the Internet, hoping that their fans’ contributions will bring them more money than they could get from a record company.
Again the model is the same. And the assumption is it will work best for established brands, which don’t have to pay to market themselves, which can get enough free distribution so ads and donations will make the numbers work.
Can this work for new writers, for new musicians, for new journalists? In many cases it already has. In others, as in this case, intermediaries still do a better job of aggregating and monetizing the necessary eyeballs.
That’s how all content middlemen will have to earn their keep in the future. The open source movement has hit content big-time, and things will never be the same. You adapt or you die.
I’ve adapted. ZDNet has adapted. The New York Times has adapted. Radiohead has adapted. Not everyone has.
Do those who don’t deserve to live, in a business sense?
Dana Blankenhorn has been a business journalist for 30 years, a tech freelancer since 1983. You can follow Dana on Twitter. See his full profile and disclosure of his industry affiliations.
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| 10/06/07
