Thursday, 23 April 2009

Free is the New Business Model

Web 2.0 takes publishing out of the hands of a few and puts it in the hands of the many. Google is a free search engine; Wikipedia is a free encyclopedia; YouTube lets you be a movie producer; Blogger gives you your own newspaper column; iTunes gives you your own radio station; and Flickr lets you be a photographer. And all of these services are free. Is everything that's any good now free, and is everything that's free any good? More importantly, from a business perspective, will free destroy your business - or can you use it to boost your business?

MP3 File

  • Free content gets them into your community
  • "Free" is a magic word in marketing
  • You must prove you're an expert before they visit your Web site
  • Make money through your content, not from your content
  • So much free stuff is available now anyway - if you can't beat them, join them
  • People will come to your Web site now not because of your advertising, but your reputation
  • New business models superseding the old (e.g. newspapers dying)

If you're a consumer:
  • Look for stuff that's free - it's probably available
  • Consider upgrading to the paid version - it might be worth it for what you get
  • No "free lunch" - sometimes there are hidden costs, from the innocuous (provide personal details, leading to spam) to the costly (sign up now, pay later)
If you're a provider:
  • Make more stuff free to build your reputation and get more traffic to your site
  • Find out who's offering the free version of what you're charging for - it might shock you!
  • Information is becoming a commodity, so figure out how to add services and experiences to commodities


ChrisP said...

The was recently launched to fill the void left by the closure of print newspaper The Rocky Mountain News. uses the "freemium" business model discussed in the podcast but its backers' ambitious target of 50,000 paid subscribers has not been met with a mere 3,000 subscribers to date.

ChrisP said...

According to this New York Times article, web-savvy companies are tapping into the altruistic "freeconomy", and saving large sums of money by way of customer support freely offered by "lead users" in web-forums. These users provide on-line technical advice free-of-charge for the social rewards of kudos and other warm-fuzzies.

ChrisP said...

According to this report in the Guardian, Rupert Murdoch's News Corporation are going against the flow with a plan to introduce subscription fees for the (currently free) on-line editions of its newspapers.