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No One Ever Said Free Is The Business Model -- But It Absolutely Should Be A Part Of The Business Model

from the a-little-bit-of-confusion dept

Following Rupert Murdoch's latest hints that he's going to take down the paywall at the Wall Street Journal, a bit of a debate has developed about whether or not it's a good idea. Dow Jones executives are apparently against the idea (ironically, published in a "free" article on their site). However, the WSJ's Kara Swisher is all for it. Watching the debate unravel, however, I keep seeing people arguing against the idea, using similar logic to what I saw in the comments earlier this year when I wrote about how "free" is an essential part of many business models (if you know how to leverage it). It's typified by Mark Potts, who declares: "Free is Not a Business Model," in dismissing the commentary in support of a freeing both the NY Times and the WSJ. Unfortunately, it seems like Potts is blinded by the word free and forgets to look past it. No one is saying that "free" is the business model. They're simply saying that free is a component of the business model -- just as it's been a component of business models for ages ("the free trial," "buy one, get one free" "buy now and we'll throw in a free toaster"). Arguing that free isn't a business model is missing the point. The argument is actually over how you use free as a part of your overall business model. In fact, that's exactly what Swisher is doing in her piece, where she suggests a number of related business models that are all helped if the WSJ makes its core content free. It's the same thing that we're saying when we suggest that musicians are better off making their content free. It's not that free is the business model. It's that the free stuff helps promote other business models that can make more money.

Filed Under: business plan, economics, free

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  1. identicon
    Shun, 20 Sep 2007 @ 4:05pm

    Perhaps we are looking in the wrong direction

    I don't run a newspaper, so I'm no expert in making business decisions for one. One thing I've always wondered was, how do you enforce a subscription model? I'll give you an example. Say I wanted to subscribe to the Wall Street Journal, or NYT, or Slate (remember them?). Say I find 10 people with the same interest. Wouldn't it make sense to try to get all of us on 1 subscription (username/password) then to each of us buy a separate subscription? Realistically, how would anyone stop you from doing this? What if your username/password became common knowledge, and world + dog used it to log in?

    I am suggesting that perhaps the subscription model was too much of a hassle to deal with. Someone probably looked at the revenue from subscriptions, figured out the overhead it was costing them to keep track of payments, deal with irate customers, etc. and said screw it. At the same time, I am not above companies trying to charge for premium content, as long as it's understood that most folks probably won't pay for it, and a small fraction of them will look for ways to get around the pay wall.

    Who am I kidding. I don't read the "news". I only read snarky opinion pieces.

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