Barclays Says: Consumers Want More, More, More Free Content

Last week, I posted here about ESPN’s initiative to get users to pay for some online video content. But ESPN and other big media properties might reconsider such plans after reading a new report on the media and entertainment industries from Barclays Capital analyst Anthony DiClemente. (Unfortunately, there’s no online link.) The report says Barclays is not “broadly recommending the sector at this time” because, as the recession rolls on, so will consumers’ quest for free content.

To Barclays, the availability of free content is the big difference between recessions past and this one. For example, the downturn of 2000-01 looks like the Paleozoic Era technologically speaking — dial-up was still the prevalent means of reaching the Internet, particularly at home. And because of the Internet’s immaturity in connection speeds and content back then, the state-of-the-art in online entertainment was Hampster Dance. (Well, for some demographics.) DVD sales accelerated because free, quality online content was in short supply.

This time around, the report says:

[T]he cyclical pressures of the economy could exacerbate the more recent secular shift to the Internet/ digital, where cheaper and easier web content means consumers may be more successful in exploring fragmented forms of free or low-cost entertainment alternatives.

In other words, since there’s so much quality online content these days, we’ll gladly pay for our Internet connection so we can get more — as long as we can get that content for free.

It seems like Barclays is on the money here (or, if you’re in the media and entertainment business, the lack thereof.) Why spend cash you don’t have buying DVDs when there’s free fun to be had only a mouse-click away? Paging Bus Uncle.