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The notion that information wants to be free might be good for many consumers, but it is isn't exactly welcomed by people who want to sell that information. According to Simon Dumenco, however, technology wants to be free as well. And that should help people looking to sell information.

Writes Dumenco at AdAge today: "Here's why I'm suddenly hopeful about the media industry: Because the tech industry is screwed too."

His argument, in short, is that people who want to make a living selling technology will be forced to partner with information sellers. And that can only increase the value of media.

Dumenco uses the evolution of the netbook to demonstrate his point. Low end computers used mostly to connect to the Internet are lowering prices for software. After testing out a $300 netbook in 2007, Dumenco wrote that the computer, "has me contemplating nothing less than The End of Microsoft."

A year later, stories like "Microsoft earnings drop as netbooks take chunk of PC sales" and "Light and Cheap, Netbooks Are Poised to Reshape PC Industry" were proving his point.

But while they may be revolutionizing the PC industry, netbooks aren't neccessarily creating a positive change for laptop makers. As sales of netbooks increase, their price points are falling, to somewhere at or below $300 currently.

And like the media industry, the PC market is poised to have its lunch eaten by products that can be had much at much cheaper prices, or, altogether free.

But Dumenco sees that as good news. He thinks that as much as information wants to be free, it also wants to be expensive. He quotes Stewart Brand, the creator of the wellknown Whole Earth Catalog:

"Information wants to be free because it has become so cheap to distribute, copy and recombine -- too cheap to meter. It wants to be expensive because it can be immeasurably valuable to the recipient. That tension will not go away. It leads to endless, wrenching debate about price, copyright, intellectual property, the moral rightness of casual distribution, because each round of new devices makes the tension worse, not better."

The key to the success of the netbook market — and the media industry  — according to Dumenco, is to package their products with popular media options:

"Hardware makers may have no choice but to turn their internet devices into multi-tier-subscription-based media machines, because there will never again be enough margin in the basic price of the hardware."

The problem of course is whether users will want to pay for access. There is a general presumption underlying Dumenco's argument that software developers will be able to silo their partnerships and get users to come for their speciality packages with certain media companies. But for many brands and media providers, the key to user adoption is being available on as many platforms as possible. if they can figure out a way to sell access to products that can be foudn for free elsewhere, more power to them.

Image: NYT

Meghan Keane

Published 8 June, 2009 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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Deri Jones, CEO at SciVisum.co.uk

It's a fascinating topic Meghan.  I like the open source software shift (Firefox, OpenOffice and all the LAMP web server stuff), and interesting that that could impact the media sector.

My kids discovered lastfm.com which seems to let them listen to pretty much any songs they like on demand, and the new mobile phone contracts with music bundled in

It's going to be tough for media providers to wrench things back from what looks like a downward price spiral, at least for music.

about 7 years ago

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