Once More, With Feeling: Embracing 'Free' Doesn't Mean You Make No Money

from the how-hard-is-that-to-understand? dept

Tue, Sep 28th 2010 9:13am — Mike Masnick

We've gone through this about a hundred times already, but every few months, someone, who doesn't seem to comprehend what's being discussed, jumps up with a "revelation" that people who are embracing "free" are also (gasp) "making money." The latest to walk down this path is Helienne Lindvall, a songwriter and Guardian columnist, who has been writing a series of columns recently that I've been meaning to respond to, since each one seems more confused than the last. I'll start with this one, though, where she mocks a bunch of people, who talk about how to use "free" to your advantage, because they charge speaking fees (and pretty large ones at that). Except, she's making a rather fundamental mistake: no one claims everything should be free. In fact, of all the people she names, I'm pretty sure every single one of them spends time explaining how to use free to help you make money elsewhere.

It's the same point we've made for years. The point of understanding "free" isn't that everything is free, but that you need to understand what makes sense as free, and what doesn't make sense as free. Someone's time -- which is scarce -- is something that it makes sense to charge for because it cannot be copied and distributed freely. Oh, and should I even mention that Lindvall's column, where she insists that the free business model has been proven dead... is available for free? I usually like The Guardian, but Lindvall's work is not up to its normal standards. Free is a part of a business model. That's all anyone's saying. And when you say that it means you do believe in a larger business model, which means making money. I'm always amazed at how people like Lindvall seem to have their brains stop in their tracks when they get to the big 0, and never reach the other side of the tracks where it's explained how you use that $0 to make money elsewhere.

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Filed Under: business models, economics, free

18 Comments

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ChurchHatesTucker (profile), 28 Sep 2010 @ 9:24am

Just dense
All these people understand advertising, where you pay someone to promote you. Why don't they get 'free?'

OTOH, there's been a trend of studios posting their trailers (adverts) online with different advertising in front of it.
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fogbugzd (profile), 28 Sep 2010 @ 9:38am

But...
But if some things I got paid for are now free, I might have to change the way I do things. My guaranteed gravy train of money might go away. I might get new competitors, and I hate to compete. Progress is a bitch!
/sarcasm
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crade (profile), 28 Sep 2010 @ 9:58am

Wow, that is a *large* ad-banner you added to the site!
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dub, 28 Sep 2010 @ 10:06am

Re:
Sucker.
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Anonymous Coward, 28 Sep 2010 @ 10:25am

yes, give us your stuff for free because techdirt says you will make money doing it! piracy is not bad it helps promote your product, so that other people will pirate it too! Just give us your stuff we don't want to pay for it, it's our right to have free stuff that we enjoy which has value! It's good for your business, really!
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Hulser (profile), 28 Sep 2010 @ 10:39am

Re:
Is that all you have? Ambiguous allegations and straw man arguments? If you want to be seriously viewed as anything but a troll, you might want to cite statements actually made by TechDirt authors and explain why you think these statements are not correct. Otherwise your post is just worthless noise.
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Anonymous Coward, 28 Sep 2010 @ 10:40am

Re:
I give away my stuff for free just to piss people like you off.
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Richard (profile), 28 Sep 2010 @ 10:41am

The point
The point is not really about free as in $0 it's about free as in "unencumbered". You can also charge money for free things if you want. In fact you don't really even have to change your business model - you just have to make sure that:

1) You don't place restrictions on the ability of your customers to use your product.

2) You don't charge enough to provide an incentive for people to get around the charge.

3) Make sure your website is convenient to use.

I recently found a Russian music/movies/ebooks/audiobooks site (Rumvi) that seems to show how you can stick with the old ways if you get your pricing right and don't worry about piracy.

I don't speak Russian so I can't really comment about the movies/books aspect - but looking at the music and comparing with Itunes or other mainstream western "legal download" sites I notice that:

1) You can listen online to anything you like for free - no "limited previews".

2) The downloads seem to be completely free of DRM - they're straightforward high end mp3s

3) The download process works really nicely - with a "fire and forget" download manager that does it all for you.

4) (The killer). The prices are reasonable - about 1/10 of Itunes. Each track is priced by the second (according to bitrate) and most are in the 10-15c range.

If the Western music industry had set upsomething like this 10 years ago they could have saved themselves a lot of bother.
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crade (profile), 28 Sep 2010 @ 10:44am

Re:
and advertiser supported television is a myth.
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Chronno S. Trigger (profile), 28 Sep 2010 @ 11:06am

Re: Re:
Ad supported radio/newspapers are also a myth. Free samples? If you believe in free samples you're a fool. All those memories you have of sample day at the super market, implanted by the pirate conspiracy.

We all know that it's physically impossible for anything to have value outside of money. There's no way in hell you can get anything without a monetary transfer. Money must switch hands.

/sarcasm (since it seems to be needed for the blue AC)
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Anonymous Coward, 28 Sep 2010 @ 11:22am

Re:
Really? That's it? Even TAM was less stupid.
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Anonymous Coward, 28 Sep 2010 @ 12:40pm

Re: Re: Re:
No more business cards! Or references! Or pamphlets outlining services available to you for a fee at any institution!

No more networking amongst associates, either!

No more talking! Or listening!
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Derek Bredensteiner (profile), 28 Sep 2010 @ 12:47pm

Re: Just dense
I tried to show someone a clip of family guy on hulu the other day. Let me repeat that, a clip. The player starts up and a commercial begins. At the top of the screen I notice it says it's playing advertisement 1 of 2, and the "video" will begin in 43 seconds. I closed it. I didn't see their advertisement, I didn't watch the clip.

Isn't that what the majority of people would do when encountered with an advertisement longer than the content they intend to watch? How is this not obvious to whomever decided to "monetize" the clips and trailers in that fashion?
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Anonymous Coward, 28 Sep 2010 @ 2:05pm

What makes this worse is that Cory Doctorow in the comments on the Guardian version of the article (exactly the same article, but on a different site) denies that he is paid that much for lectures and says his agents have no knowledge of being contacted by the writer of the article.

http://www.guardian.co.uk/media/pda/2010/sep/27/free-online-content?showallcomments=true #end-of-comments
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Anonymous Coward, 28 Sep 2010 @ 8:57pm

Oh, fun, the troll who incessantly whines about BoingBoing is over on that article (the PaidContent one). I wonder when he'll show up here.
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Karl (profile), 28 Sep 2010 @ 9:06pm

Whatever.
Oh goody, another whiny editorial from an "artist" who only understands the music business prior to 1996.

I just read the article, and it's offensive on a lot of levels. She's not someone who actually tries to understand the issue. She's just someone who thinks "those nerds are making money by stealing our shit."

Here's the most damning passage:

Now [Peter Sunde] demands up to £5,000 to appear at your conference. I suppose Pirate Bay's demand that artists give away their work for free is a one-way street.

Uh huh. As if the Pirate Bay even claimed any such thing, much less "demanded" it.

And I've yet to hear her complain when a recording artist makes £5,000 from a live gig... unless she complains that it's not enough money.
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The Mad Hatter (profile), 28 Sep 2010 @ 9:29pm

The Daily Gruaniad
For those who aren't English, the Guardian, a northern paper was famous for spelling errors, due to the need to publish really early so it could be on the streets of London at the same time as the London papers.

Now to the point - Mike, did you know that the Bill and Melinda Gates Foundation has literally bought coverage at the Guardian? Seriously. I don't know all of the details, but a grant was given for the Guardian to cover certain issues.

The problem with this being, that now that the Guardian has been given this grant, is it likely to treat the Foundation, and Microsoft, the company behind the Foundation differently?
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Clancy, 30 Sep 2010 @ 5:10pm

Re: The point
Just want to confirm a couple things so I get this straight, this new-fangled making money from free stuff is a little confusing...

1. What's a customer? Is it someone who pays you money for products or services you provide that have value, or is it someone else? ie, if you write a blog, is the customer the person who reads the blog, or the advertiser who pays to place ads in the hope that the blog is controversial enough to attract clicks?

2. Does this go for anything? Like, say, a trip overseas on a 747 or something? Sounds like a really good system, everyone could fly everywhere unimpeded, it'd be fantastic.

4. Does that mean shorter songs are better sellers because they're cheaper?

You're definitely right, if the western countries had followed the Russian example long ago, we'd not be still recovering from the devastating collapse of our entire political system and all the selling of all our military infrastructure by ex generals etc...
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