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
    Jim, 20 Sep 2007 @ 12:54pm

    blinded by the word free

    Your observation that many are blinded by the word "free" seems to fit many of those who disagree with you, Mike. I would add that a large proportion of those are inhibited by pre-digital concepts of intellectual property (e.g., most movie/music company execs) who worry their fingernails off that anything offering something "free" will reduce its value. Instead of seeing free as another form of advertising, they see free as a 100% discount. When free is used in a limited fashion, as in "not forever" or "all" then, it can be an advertisement for "more" or "longer" use/access/availability/whatever of the particular content/application/etc.

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