OK, I confess, I’m a sucker for superhero movies. This summer, I happily got in line with all the 13-year-olds for Hellboy II, Iron Man, Hancock and The Dark Night. And you know what? I’m apparently not the only adolescent trapped in a grown man’s body. Those four films have combined for nearly $1 billion in box office revenue in just a few months, and I’m talking U.S. ticket sales only — not merchandising, foreign box office, DVD sales, or TV broadcast rights. Who says old media is dead?

“Whoa now, Doug,” you’re probably thinking. (If not, just work with me on this.) “Aren’t you a new media guy? Shouldn’t you join all the other tech bloggers in raving about how new media is blowing old media out of the water? C’mon, Cone, just look at all the newspaper layoffs and the declining TV ratings…”

To which I say, I would totally agree with you — if the new media market itself weren’t so screwed up.

True, YouTube has sucked away millions of viewers from TV and other forms of media, and some estimate they’ll make $200 million this year. But that’s still less than what a mediocre kids’ flick like Kung Fu Panda made just this summer. Even YouTube admits that it’s selling ads against only 3% of its videos.

But hey, at least YouTube has a fully functioning revenue model — which you can’t say about my favorite segment of all online media: FREE APPS!

Yes, I love FREE APPS/Open Source! even more than I love superhero movies or beer (though slightly less than superhero movies and beer put together). I remember spending hundreds of dollars on software packages and service licenses. Those were the bad old days. Now, most of my software and application expenditures have been replaced by FREE APPS! Who needs Microsoft Office when there’s Open Office? Who needs Salesforce.com when there’s Zoho CRM and SugarCRM? Who needs QuickBooks Pro when there’s GnuCash? Who needs Vista when there’s Ubuntu?

The May issue of Inc Magazine lists a few Free (Open Source) Apps! for office workers and small entrepreneurs. And Wired Magazine hyped this very topic in their cover story, “Free! Why $0.00 Is the Future of Business“. Their prediction: the whole media world will soon be free or close to free.

How is this possible? Let me give you the Nullvariable Rundown:

1. Freemium offers: Basic versions of an app are free, with premium versions sold at a significant premium. Some application developers also charge for support and customization services. For example, while a basic WordPress blog is free, after a while, you’ll want the hosted version, which costs hosting money, and perhaps some technical and design assistance. Think of it as the drug-dealer approach to technology: get the customer hooked on the lightweight free samples, then hit ‘em up for the heavy stuff later. (Not that I would personally kn ow. Let’s just say I’ve seen the movie Scarface a few times…)
2. Advertising: Yeah, right. See YouTube above but on a much, much, much, much, much smaller scale. Know all those FREE APPS! you get on Facebook? That’s their model: they want to get enough users so they can start selling ads on their FREE APPS! You gotta love dreamers, no?
3. Tips: The geek version of the sidewalk musician: dig my far out and groovy digits? A little sugar in the tip jar, pleeeeze. Note to my techie brethen: have you seen the living conditions that most independent musicians endure? Not exactly a lifestyle that will keep you knee deep in Mountain Dew and Xbox games.
4. Out of the Goodness of their Techie Hearts: Yes, some people just like to create freeware and shareware and spread their digital love across the planet. I can’t say I’m one of them. Until the oil and beer companies adopt the same model, I’m going to have to stick to the old school practice of, um, charging money. I’m such a greedhead.
5. Selling out: Some developers look to sell their FREE APPS! to a bigger dog (here, Google, come here, boy). Others are looking to score a job with that dog. But what if all the big dogs are run out by the FREE APPS!? (Has anyone noticed Microsoft’s stock price over the past couple of years?) Who will be left to buy or hire anyone?

I also thought of one more option, which I haven’t really seen put into play, though it makes sense to me:

6. Selling Apps as Content: Rather than try to sell ads themselves — which usually requires hiring a well-connected and experienced business development person — application developers should sell their apps to destination websites that have established ad-sales departments. For example, why are so many developers giving their apps to Facebook for free? Make those under-aged, multi-millionaire Palo Alto wine-and-brie junkies pay! You’re keeping their customers happy — demand a piece of the cheddar! (Sorry about the cheese references. Blogging makes me hungry.) Plus, having your app on an established player’s site helps overcome the trust issues that consumers have with unknown software.

So far in Web 2.0, those who own the platforms (YouTube, Facebook, MySpace) have tricked us content developers into uploading our work for free. Some, like YouTube, share a pittance of their revenue, but most do not. Can you imagine if movie producers did their work mostly for free and let the theaters keep all the revenue? You could kiss the $100 million special effects spectaculars goodbye. And that would just ruin my summers.

So while I absolutely positively love FREE APPS!, I’m beginning to think we new media guys shouldn’t be so readily dismissive of the old media giants. After all, without all the ads for my superhero movies, many of these new media ventures could not exist.

Enough ranting. I gotta check out this killer site for Watchmen. The movie isn’t opening until March 2009, but I’m already pumped. And you know there’s a business lesson in that somewhere…

Tagged as: dark knight, free, hancock, hellboy, iron man, making money, new media, old media, open source, watchmen