EDIT: January 31/08 – this piece is flawed and should have been edited much more thoroughly. I am going to do a rewrite at some point in the near future. My apologies for inflicting this on you, dear readers.

I don?t like to pay for something when I think I can get it for free. At the same time, I would be disappointed if I didn’t make some revenue from the fruits of my hard labor. This is a paradox and I’m still trying to resolve it in my mind. But I think it’s one of the biggest issues in modern culture and it’s not going to go away.

In this virtual boxing ring we call modern society, we have two competitors:

• In this corner: writers, artists, musicians, corporations and anyone who ever tried to copywrite, patent, trademark, or otherwise protect their creative output.
• And in this corner: Google, shareware, Creative Commons, and 99% of the people participating in blogging and other social media, plus anyone who ever downloaded or used content without paying for it.

There’s a growing number of people with a foot in both camps. There’s an ever-increasing amount of user-generated content proliferating through the Web, most of which does not provide revenue for its creators. Social media sites are draining a lot of time, effort, and energy from users while those site owners make revenue through ads distributed around and in their user’s content. Many users contribute their time, energy, and emotion to create content and their motivations will vary.

In a similar vein, it’s getting harder to get an ever-growing number of consumers to actually pay money for content. Especially when so much content (audio, video, writing, and images) can be obtained without paying the creator. In some cases, the creator gives away their work – it seems like hundreds, if not thousands of people have free eBooks, podcasts, MP3s, YouTube videos, and photos available.

Freeware and shareware have been around for more than a decade and help to launch companies like ID Software, the makers of Doom and Quake. On the other hand, virtually any song, movie, or television program made in the past couple of decades can also be viewed or heard without paying the creator and a lot of it is not considered to be free.

I?m not here to judge whether or not it’s immoral to pirate content. However, I think it’s important to acknowledge that a lot of work goes into creating content, regardless of the quality or whether or not it sticks with the audience.

FRUITS OF LABOR

Let’s compare the creation of content with the creation of physical assets for a moment:

• If someone built a hospital for your community, such that it would provide needed services and employment for many people, would you expect that work to be done for free?
• If someone built you a house, a place where you were to spend many hours of your life, would you expect it to be done for free?
• If someone built you an extension on your house, some place where you would spend a number of hours of your life, would you expect someone to do it for free?
• If someone redecorated a room in your house, made it look more beautiful and more useful, so that you would derive hours of enjoyment from being in that room, would you expect someone to do it for free?

I could continue on with these examples to a much more detailed level, but there’s an interesting principle in play with these scenarios. Granted, we’re talking about bricks and mortar, literally, instead of creative content, but there are more similarities than differences between creative content and physical objects.

A creator, whether a creator of ideas or something solid, exchanges time and effort for some future reward. The reward may be material, monetary, or emotional, but almost no one is so selfless to create something without the expectation of some future reward, save for a child who delights in creation and experimentation, or the adult who clings tightly to their work of art, unwilling to part with it.

This exchange of labor and time for compensation was the status quo for centuries until the World Wide Web and inexpensive content distribution served to decimate the collective willingness to pay for most content. Now that there?s an almost incalculable supply of free content (music, books, videos, pictures, stories, reference materials, you name it) available online, why would anyone ever want to pay for content, even if some of it represents the pinnacle of human creativity?

You, the person reading this article right now, are only paying for the ISP time needed to give you access to the Web. I?m exchanging a couple of hours of my life in order to create this article and I probably won?t receive any money for my work. I figure that it’s a relatively small sacrifice to make, especially if I convert you, dear reader, into a fan of my writing. Someday I’ll hope to monetize your interest in my work, but that’s not a realistic expectation in the short term.? As Seth Godin once indicated in his Ideavirus eBook (available for free), asking for money too soon in a creator-consumer relationship will ultimately reduce the revenue that can be generated from an idea.

Now let?s look at a similar, yet very different scenario: writing a book. Writing a book can take weeks and months of effort from start to finish. Instead of two hours of my time and effort, a book might require two thousand hours of effort spread over two or more years.

While I might get a lot of personal satisfaction from writing a book, many people would earn $25,000 (or much more) in their full-time jobs by exerting a similar amount of effort. However, since many of us do hold day jobs, the time spent writing a novel is time stolen from other activities, like leisure, friends and family, personal development, charitable activities, community service, exercise, and sleep. The same holds true for creating a large painting or mural, sculpting a bust, or recording a music album.? There is a price to be paid for mastering any skill or art, but the promise of a career, or at least an income

Meanwhile more literature is available, for free, on the Web. It?s great for the consumer, but it’s lousy for the creator, unless someone actually pays for the work. Everyone needs to eat, have shelter, and otherwise survive. The tradeoffs between creative time and survival needs are very difficult to manage. Many struggling creators have been highly dependant upon patrons, grants, and multiple paying jobs in order to maintain the essentials while trying to build a career in the arts.

Some readers are probably rolling their eyes at this point. Anything that’s worth doing is supposed to be worth the sacrifice, right? The answer to that question is dictated by the individual’s desires and values.

SOMEONE’S GOING TO PAY

Fortunately, a “white knight” or sorts appeared on the scene to help save the day. Enter Google and on-line advertising, which can pay some of the bills and, with some luck, even make it financially rewarding to create content. These ad platforms are what make free work.

Let’s look at this relationship in more detail. There are four main stakeholders to consider:

Content production
The creator (in this case, myself)
The distributor (ISP, blogging platform, hosting services, other supportive services)

Content consumption
The ?enabler? ? the middleman who makes ?free? financially viable
The consumer/advertiser ? the person who actually pays for the content

In the standard ?buy and consume? model, the consumer pays for the content at retail prices (prices which have been set by determining the cost of production and distribution plus the desired profit margin). In the ?free? model, the creator and the advertisers pay for the content creation and distribution.

It?s great to be a consumer, but the environment for the stakeholders at the other end of the transaction isn?t so rosy, unless the content proves to be extremely popular, which can lead to ad revenues to cover costs and, heaven forbid, turn a profit. Someone somewhere has to pay or else the system collapses.

What I?m really trying to say is that there is no such thing as ?free?: we?ve merely changed who is really paying for this content through the development of new distribution techniques. Cover prices and subscriptions are becoming obsolete as content becomes more of a commodity.? Ad revenues are becoming the primary model of revenue generation.

Periodicals have been using this revenue model for years, except that it?s become a model whereby you can?t charge a cover price for a newspaper or a magazine anymore and expect the reader to pay for it when there?s a fresher, ?free? version available online, unless the experience of buying and handling the content is more important than the money you give up by paying for it.

Today the advertising revenues either pay for the whole thing, part of the costs, or, in many unfortunate cases, doesn?t pay at all. In the case of many user-generated content sites, the original creator never receives any revenue (and you can argue that quality of this content ranges from abysmal to brilliant, but most of it is probably average quality or less, so most of it can?t find a willing buyer).

If the creator did their research ahead of time, they must know that they made this tradeoff at the very beginning of their creative journey. After awhile, though, it must sting a little, despite the knowledge that it was a voluntary arrangement.

There?s a whole industry and science around the publication and distribution of ?free? content that?s really paid for by advertisers. Enter Google Adsense/Adwords and hundreds of other methods to pay for content production and distribution. Over the past decade, these advertising platforms have smoothly and deeply inserted themselves into the publishing status quo. ?Free?, as we know it today, probably won’t work without these advertising platforms.

QUESTIONS FOR THE FUTURE

This leads me to two very important questions:

1. What happens when the advertisers decide that the Google advertising platform, and those of its competitors, isn’t sufficiently rewarding for them and they opt out? In other words, what if they feel that all of these ads are not leading to increased sales and market share?
2. What happens when the advertising platforms decide the status quo isn’t sufficiently rewarding for them and they either raise prices, reduce the creator’s cut, or else find a more profitable business to be in?

I don?t have any answers to these questions. But I think the future of free content lies at the heart of the answers to these two questions.

Author’s note: this essay was influenced by multiple sources. I particularly want to acknowledge the writings of authors like Seth Godin, Jeff Jarvis, Scott Karp, Mathew Ingram, and Yoni Greenbaum as having inspired the thoughts behind this essay. If I have unintentionally omitted some other source, please let me know I’ll adjust this section to reflect their contributions.