The Promotional Value Of Free
from the understanding-economics dept
People sometimes get confused when I start talking about "free" - which suggests I haven't done a very good job explaining my position. I do not post stories about the importance of free things (music, WiFi, etc.) because I simply want to be able to consume these things for free. I'm also not saying that anyone should be required to give away these things for free. The point is to understand the basic economics of competition, and to realize that, if the product you're offering is easily copyable, the pricing pressure is going to make it very difficult for you to keep charging for it. That doesn't mean that you can't make money with "free" things. It's often a very smart business proposition to offer something up for free - most people call it advertising. You just need to understand that anything that is free has extra value in that it's a promotional item for something else - and the value of that promotion increases when what you're offering is something people want. A great demonstration of this is this story from WiFi Networking News about an IT services firm that has decided to setup free WiFi systems at a number of local retailers near their offices. They're doing all the work, and requiring the retailers to make sure that the hotspots remain free. In exchange, they get a ton of free promotional value out of these hotspots. When people log on, they find out that the free hotspot is provided by 3rd Wave and get a quick description of what they do. This certainly makes it difficult for the coffee shop around the corner that wants to charge to make any money off of WiFi. That's the competitive environment. If your competitive position means you're going to be competing with free - and can't offer additional value that makes it worth paying for your offering, you're in the wrong business - but it doesn't mean you're automatically out of business.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Reader Comments
Subscribe: RSS
View by: Time | Thread
Yawn
[ link to this | view in chronology ]
Re: Yawn
Actually, looking through the front page right now, I see very few IP related posts.
If you don't like the site so much, why are you even hear?
Grow up and get a life.
[ link to this | view in chronology ]
Re: Yawn
It's in there, thinly disguised.
"Actually, looking through the front page right now, I see very few IP related posts."
I count 4.
This one, "Kazaa Trade Group Suggests Plan To Pay, Not Sue Song Swappers", "Can You Copyright Yoga?", "Chinese Department Store Facing Copyright Violation Charges For Muzak".
Among his other cliche positions, anti-privacy paranoia, anti-cell phone regulation, politicians can't possibly do anything about spam.
"If you don't like the site so much, why are you even hear?"
Why am I here? I participate in plenty of other forums. There's a small chance that some people get tired of cliches here, but I don't expect much from techies.
[ link to this | view in chronology ]
Re: Yawn
I have to agree with you for once.
Funny, one of my coworkers asked me last week why they don't see me trolling Techdirt much anymore.
[ link to this | view in chronology ]
Re: Yawn
And just for the fun of being a spelling nazi boys, the word is here, nor hear ?
Do you HEAR me from HERE ?
[ link to this | view in chronology ]
Re: Yawn
[ link to this | view in chronology ]
Re: Yawn
What a mature and insightful post ?
[ link to this | view in chronology ]