Pet Peeve: Anyone Who Says 'Free Is Not A Business Model'
from the no-one-is-saying-free-is-a-business-model dept
The latest example is in a recent David Carr column in the NY Times. The column itself is nothing new. It's the same old whining from an old school media guy, wishing there were some other business model by which newspapers could charge again. The main points in the article have been ripped apart by those who understand the news business quite well -- but what struck me was the following comment in Carr's article from Craig Moffett of Bernstein Research:
"Free is not a business model."That's the zero-brain-stop point. As has been discussed over and over and over and over again is that no one says that free is a business model. What people say is that free often makes sense as a part of the business model. And that's been true in tons of businesses throughout history. Free samples. Buy one, get one free. First one's free. Buy twelve, get the thirteenth for free. All of those use free as a part of the business model. No one says those models don't work. And, no one is saying that "free" by itself is the business model. People merely point out that it often makes sense as a part of the business model.
But, for some reason when folks like Moffett get to the point where they see the price of $0, they stop considering that that's only the first part of a wider business model. That certainly doesn't mean that there are plenty of businesses that haven't thoroughly planned out the rest of the business model, but Moffett falsely implies that many companies actually thought that "free" was a business model by itself -- and ignores how pretty much every business was actually looking to use free as a part of a larger business model.