Free vs Paid:
the Future of Digital Content
Gerd Leonhard at Tokyo 2.0 August 24, 2009
‣ Futurist
‣ Strategist
‣ Author & Blogger
www.mediafuturist.com
twitter.com/gleonhard

What I do:
www.payingwithattention.com
for free downloads
‣ Understand Clients such as Google, Nokia,
DDB, Sony BMG, Orange /
‣ Imagine France Telecom, BBC, ITV, RTL,
‣ Design
The European Commission, IBM,
Omnicom, Siemens...
www.mediafuturist.com
twitter.com/gleonhard

Connected people ‘consume’ differently!
Real-Time E verything
C ult(ure) of P articipation
The Li nk Economy
Sh aring is the key driver

In the Content Industries,
Command & Control
is irreversibly becoming
Cordinate & Cultivate

Content Futures: Copy $ down, Attention $$ up
Copy Based Revenues Attention Based Revenues
10.0
7.5
5.0
2.5
0
Was Is Soon Near Future Mid-term Future

The challenge: Creating New Models!
Content Consumption (all)
Revenue Potential
Success with Traditional Content Models
Was Is 2 years 5 years

Mobile: Great User Interface & User
Experience changes everything

So will people read like this?
2012 Book
Publishing Revenues:
$43 Billion in U.S. (BISG)
$120 Billion Global (est)

Only an average of 20% a newspaper’s
income is spend on CONTENT CREATION.
Thanks to Flickr.com/alextorrenegra

=
+ +

Our new reality: Listen / Use = Copy

Flat-rated & Bundled Content

What are we paying for, here...?
Not to eat all the food... but to get Access!

Now, Content is first a
Service & Experience,
and only then (maybe)
a Product.

Bundling is the Future

It used to be...
Premium
“Option”
“Extra”
Default

Soon:
The New
Premium
The new
‘Normal’

If Access replaces Ownership as Default...

Experience
Embodiment
Access

How will access to content be paid for?
Paid by 3rd Parties
Flat-Rates
Bundles
Access

Attention
Transfer

A key task now - and even more so, in the future:

A crucial shift in the content industries:
New Generatives
• Content ‘Pre-Web’: Presenting -
and selling - professionally
produced Content
• Content ‘Web-Native’:
Presenting - and selling -
Context, People, Relevance,
Packaging, Timeliness - and
many different kinds of Content!

Free gets you to
a place where
you can get
paid.
Quote by Fred Wilson, Union Square Ventures www.avc.com

Free gets you to
a place where
you can get
paid.

• Provide free and easy access to content to
anyone that is interested *
• Subsidize the free content with next-
generation advertising, affiliates, data-mining
and other ‘New Generatives’
• Addict the users to the offerings by
providing more and more values all the time *
• Offer a myriad of ways of getting further
engaged & attracted to Premium offerings
• Convert between 5%-40% of free users to
paying users

(Trans)Action
Data Creation Engagement
Attention
Conversations
‘Feels Like Free’ Content

Crucial: the right when, how, where!

We need web-native toll-booth strategies

The 2-sided TeleMedia Model -
starting with Digital Music
Content Content
Owners
&
Users
(fka
Creators Consumers)

It’s hard to ‘own’ copies now but
You can still own the
Context, the Meaning,
the Relevance, the
Experience, the
Embodiment, the
Timing...

The Future of Content
Open
Mobile
Freemium
Connected
Collaborative
Interdependent

Thanks for listening!
★ email me at gerd@mediafuturist.com
★ twitter.com/gleonhard
★ facebook: gleonhard
★ more presentations at
www.mediafuturist.com