The future of the Internet is more Web sites like craigslist. I got this from an interview that Chris Anderson, the editor-in-chief of “Wired” magazine, did with the incredible Charlie Rose.
Anderson has a book out explaining why free is good for business. Free promotional give always can boost business. I love his equation regarding Oprah and her King Midas-like abilities: Oprah + Free = Blockbuster. Just one look at this graph paints the entire picture. This is a classic example of the Elaborated Likelihood Model.
But “free” is killing traditional, advertised-based businesses (i.e. newspapers). Anderson talks about how craigslist has destroyed revenue from classifieds that newspapers have collected from classifieds. But craigslist isn’t exactly raking in the dough, as compared to what newspapers were once collecting. So if the millions of dollars that newspapers are losing aren’t going to competitors like craigslist, then where exactly is the money going. What I got out of the Chris Anderson interview was that the money is being distributed equally amongst the entire economy. Now that’s something to think about.
This is a tough problem to tackle from a PR standpoint. How do businesses compete with communal Web sites that offer services for free or little money up front? Going back to the “Oprah equation,” I think promotion is key – especially free promotion. Using the Elaborated Likelihood Model to guide PR strategic plans, I think offering more for free will actually give businesses a bigger profit.
I wouldn’t say that “free” is killing all advertisement-funded media, exactly. In order for newspapers to survive, they’ll just have to be more localized, handling issues that smaller communities will care about. And I don’t think businesses will have to compete; they’ll have to adapt. If they don’t, THEN they will die.
The problem with newspapers and other industries whose former monopolies are endangered by more convenient, cheaper outlets online (see: movies, music) is that they aren’t evolving with technology. Public relations should surely do the same.