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The New Auteur

Independent Film in Times of the Internet

Tag Archives: Free

Finally some experimenting with “Giving it away for free” from a UK cinema chain: Slackers Club (probably Michael Moore fans). Picturehouse Cinemas has teamed up with E4 to let students watch films for free – ones a month – and force everyone who shows up into alcoholism by providing them with a free Stella Artois – so they even got some sponsoring money.

This goes a bit against the notion of freely giving away infinite goods and charging for scarce goods. It follows another strategy: Create a free event and earn with ancillaries – sponsoring, food, drinks, etc. – and hope to create a future audience.

I wonder why cinemas don’t experiment more with free stuff:

  • Everyone who pays for the online premiere of a film (preferably a local indie production) will be able to watch it for free in the cinema.
  • Watch a film at the cinema (and pay for it) and get a free download (to rent or own) of that film.
  • Pay for a new film of a filmmaker and download an older film for free.
  • Pay a monthly subscription fee to have online access (probably streaming) to all films that are shown in the cinema this month (okay, there is not really a free option here).
  • Let people watch a basic version for free online and charge for an extended cut of the film in HD plus Q&A with the filmmaker at the cinema.
  • Give away deleted scenes and Making Of documentary online and charge for film.
  • Create an online audience and earn with advertising.

In general, I think, cinemas should try to use the internet much more to attach the audience to them. Create online events or contests. Have additional content online – not just a synopsis of the film but also trailer, deleted scenes, making of, director’s commentary, I-don’t-know-what. Let audiences vote on films they want to watch. Let them comment on films they have seen. Attract the audiences of local filmmakers by having slots for their films (Manchester Monday, Territorial Tuesday, Community Wednesday – I’m sure someone can put it much better).

Speaking of local: You are a cinema. You are a local thing. Sure, the blockbusters bring in cash – and that’s how it should be. So show them. But remember, everyone shows them. Start getting an identity by being part of your community. Bring together local film fans with local films and their filmmakers. Be special. Get a face.

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Just read Sujewa Ekanayake’s post about Mark Cuban’s post on TV Everywhere. To quote Cuban:

many people think tv programming should be widely available for free on the internet. Of course the content is never free. Someone has to pay to create it and we purchasers of cable and satellite services pay the subscription fees that pay the content companies and allow them to create all that content. Someone always must pay for free. Its unfortunate that there are some incredibly greedy people who think their entertainment needs should be subsidized.

To be fair, I think Cuban talks about piracy (which is a nasty little habit of people with an interest in media products but without the necessary funds to pay for them). But I can’t help it and am always reminded of Chris Anderson’s new book when people talk about free entertainment online. I think that Mark Cuban (though being the boss of the coolest Basketball player) misses some things here:

  • I wrote about Anderson’s book before and can just repeat that there seem to be business models around giving things away for free. Direct payment is not the only possible income for entertainment products. When things are given away for free, they create new business opportunities (advertising, merchandise, live shows, superior products and so on – check out my earlier post for more examples). So free not always equals free. But, okay, let’s say that this is not so much for TV but rather a business opportunity for single entertainment products.
  • But even when looking at TV, we know that there is not only Pay-TV (in which case we directly pay for the content). But there is, and this is probably something rather European, also Free-TV, which is – like one can guess from its name – basically free. Money is earned through advertising or a license fees. Those things could also work when giving TV away for free online (though, I doubt that US TV will ever see license fees like we do in Europe). So, again, free doesn’t need to equal free.
  • One more remark about license fees: We have to face it that entertainment products, in a digital world, are public goods (we can’t exclude people from using it and owning/using a product doesn’t mean someone else can’t own/use it). Public goods create the chance to free-ride (in this case “piracy”). One way to deal with free-riding is a taxation system (this works in health care, defence, partially in public transport and education). License fees are just such a taxation system.

I don’t try to defend piracy (though it is also not right to absolutely condemn it either). But saying that direct payment is the only way of financing entertainment products is just wrong.

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A week ago, I was trying to write a chapter on culture as a commodity and all the things concerning payment for creative products. What always struck me as a bit weird was that nearly everyone takes it for granted to be paid for their creations. This is something I don’t understand. I would like to teach much more, but the university doesn’t seem to have any vacancies. So should I just teach without getting paid? Maybe. As a filmmaker, I want to make a film. So I will. But why do I expect the world to be waiting for my film and people line up to pay for it?

A lot of the criticism of Chris Anderson’s (not so new anymore) book Free (of which there is a lot: Shooting People members, Malcom Gladwell, John Taplin and in the comments of this Techdirt post) is this weird sense of expecting to be paid for something that nobody asked for, paired with sticking to old, and possibly outdated, business models of the analogue world.

I do think that Chris Anderson made some valid observations and that there are business models around giving products away for free. And his argument is backed up by simple economics:

  • Competition in a free market always drives the price of a product to its marginal costs.
  • Infinite goods will have marginal costs of almost zero and will thus be available for free.
  • Scarce goods, on the other hand, can be sold for a price above their marginal costs.
  • When giving things away for free, those things stop generating income. They can no longer be considered a product. But they become a free resource for other products, which then create a new market.

All of this is nicely laid out in Michael Mesnik’s post on Techdirt – and discussed ad nauseam in the comments.

I think, most of the criticism is motivated by protectionism of old businesses. But the internet puts artists into a new environment. Digital products are no longer scarce – they are abundant. Whereas before the internet, access to films was restricted through cinema admission, TV license or DVD rental/purchase and owning a copy/seat meant that someone else couldn’t own this copy/seat, today those limitations do not apply anymore. What once was a private good (excludable and rivalrous) is now a public good (non-excludable and non-rivalrous). Films will never ever again be private goods – if copyright protections will start to work (or if people decide to follow legal offerings like iTunes), films might become club goods; at best. But the times of a film being a private good are over.

This now doesn’t mean that people will not pay for films anymore. They will; just as people pay for other public goods (train fares, NHS in the UK). But there will also be free-riders – pirates.

A friend of mine is a booker and publisher for independent music. He clearly profits from advertising shows and bands online – for free. Those bands are able to play live and even earn some money from their shows (though not enough to make a living). But still he complains about the internet and piracy. Nobody buys CDs anymore. Well that might be true. But on the other hand, marketing is free. It is much easier for smaller bands to attract fans and to get known.

That all goes together with people complaining about Anderson’s Free. What is it that we want? Do we want an internet that allows us to communicate freely and widely or do we want a pre-internet world where access is scarce and expensive? I would rather like people to see the internet as a chance and embrace the new opportunities than complaining about some free-riders. And if those pirates are such a big problem, then maybe we should follow the suggestions of Chris Anderson, Brian Newman or Kevin Kelly, who seems to have spoken about this first.

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