Eric Pfanner has a story in IHT about the spread of advertising-supported free business models to computer games, broadband access, newspapers, digital over-the-air television, legal digital music and even mobile content. There is no guarantee that this ad-financed model will work either for the companies or for the consumers. Some extracts…
There is no guarantee that ad-financed music will transform the industry.
Doubters of the staying power of free, advertiser-supported media worry that the trend may not be as consumer- friendly as it seems over the long term.
Will consumers eventually lose out if media budgets are more heavily financed by advertising? Will diversity — in music, for instance — suffer if media owners have to rely on advertising to finance it? Commercial television, after all, often seems more concerned with ratings, to please advertisers, than program quality. And, is there a point at which advertising reaches overload?
“There’s a definite balance here, and if you surround people with too much advertising, they get resentful,” said Bernoff at Forrester Research.
That is what happened in the American radio market, analysts say, where the free airwaves gradually filled with sound-alike stations, packed with more than 15 minutes of advertising an hour. That created an opening for satellite radio companies like Sirius and XM, which generate the bulk of their revenue from subscription fees and have few or no commercials.
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