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Why people will no longer pay for access to content

By on December 14, 2011

This post was originally written for the Bookseller, and appeared in the supplement for the Futurebook Conference on 5th December 2011. It is accompanied by the presentation that I gave at the event.

My three-year-old son Alasdair is a fan of The Octonauts, the animated children’s television series that follows eight anthropomorphic animal aquanauts who explore, rescue and protect the creatures who live under the oceans.

If it were up to Alasdair, he would watch the entire series every day, possibly several times. In a previous era, maybe two years ago, Alasdair would have owned a DVD of The Octonauts to enable him to watch episodes whenever he fancied, or more accurately, whenever we let him.

In this era, we don’t own a DVD, because between the iPlayer and a digital video recorder, we have access to every Octonauts episode whenever we want them for free.

If Alasdair asks me for an Octonauts DVD for Christmas, I would give him one, though. He wouldn’t be asking for it in order to watch the show whenever he wants, because he can already do that. He would be doing it to demonstrate to the world that he is an Octonauts fan. To have the joy of ownership. To see the DVD on the shelf and get a little frisson of enjoyment just from seeing it. To show it to his friends and family as something that is, unlike the digital version, unequivocally his. I would give an Octonauts DVD to Alasdair because doing so would make him happy.

All of these reasons are social, interpersonal or emotional. None of them have anything to do with getting access to content.

The value of a dead tree book or a shiny DVD is partly in the way it lets you access the content whenever you want. It is also in the social, emotional, personal or status benefits it confers. These vary from person to person and product to product. You might like to own the entire catalogue of Lee Child’s books or like the visual allure of shelves of books in the distinctive livery of Picador, Faber or Penguin Classics. You might want to demonstrate your erudition, or your love of Dan Brown. You might remember a book or a DVD as a gift from a friend or as a treat for yourself.

As content migrates to a digital world, the cost of making one more copy becomes as close to zero as makes no odds. When that happens, the price of digital content will trend to free, and consumers will no longer pay for basic access to content. So how are you going to offer them something that they will pay for at an emotional, personal or social level? And how will you make up the revenue that you have lost when consumers no longer pay to access?

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com
  • http://twitter.com/barryoneill barryoneill

    This argument no longer holds true for CDs, there was a time when I proudly displayed the hundreds of CDs I owned. Then I digitised them all, kept them hanging about for a bit, and finally relegated them to the attic. It was a process of acceptance of digital, and letting go of the physical artefact. Will this not happen with DVD and books too?

  • Ben Board

    I think it’s a very good question.  Perhaps – and I doubt you’ll like this suggestion – the affected industries return to finding ever more intricate ways to avoid their content being copied for free, whatever it takes.  A DRM arms race; and/or entreaties to governments and ISPs to find better and more heavyweight ways to legislate against illegal copying. Free theorists would probably say that’s impossible: an unwinnable battle against an unstoppable force.  But if I was an author or book publisher who can’t offset cannibalised sales earnings with revenue from live gigs, as musicians can, and my very livelihood was at stake, I’d want to make myself an immovable object.

  • Anonymous

    Going against every trends, I purchased a gaming desktop (assembled with the help of a friend), and just yesterday the first thing I did was signing up to Steam and purchase a digital copy of Skyrim. I find the game is ultra cheap given the amount of content and enjoyment I can draw from it and I felt good spending my cash on it, also knowing there will be a lot of free and paid mods to extend the game’s lifespan.
    This said, I believe Freemium is going to continue to grow for a while and will always appeal with its absence of price barrier.But I am sure people will continue to happily pay –including upfront– for quality entertainment, especially with the average gamer growing ever older.