The value of free media

Free newspapers, free TV stations, free digital radio, free music downloads and free websites. It seems that the only thing no longer free in the media is the proverbial lunch. Last week Rupert Murdoch, the oracle of media profitability, found himself talking about free content encroaching on his businesses in both newspapers and on TV.

Metro, the free morning commuter paper, conceded Murdoch, had had a negative effect on sales of the Sun, and as a result Murdoch's News International is watching developments in the market "very, very closely". For Associated Newspapers, which launched the Metro concept in the UK in 1999, this is analogous to the tethered goat being told that the boa constrictor is watching its situation very, very closely. But what is the worst that could happen? Another free newspaper? As the old saying goes - you can't fall off the floor.

Transport for London is discussing the possibility of allowing a second free paper to be distributed, in the evening, in the tube - an option which has attracted interest from at least three national newspaper groups. Free newspapers are not new, but Metro has shown what was previously in doubt among the nationals, that the cover price does not necessarily determine the value of the audience to the advertiser.

It also opens up some uncomfortable truths about the modern media model. It is what Clay Shirky, US academic and writer on internet economics, describes as the "fame versus fortune" model - ie what happens when a medium becomes attractive for its reach rather than its revenue. If barriers to entry are sufficiently low (for instance publishing on the internet which costs nothing for one amateur) then free content flourishes because writers are motivated by exposure rather than money. The paid-for media have been snooty about free content on the web for a long time, but now the price of content is being driven down - and not just by the internet but by increased competition in the industry

Read the article: www.media.guardian.co.uk