by Mike Masnick
Tue, Apr 21st 2009 10:22pm
Over the past few months there have been a variety of stories about restaurant chains offering special "free" promotions and people keep submitting them -- such as this one about Denny's recent experiences with free food promotions. I haven't been posting such stories, because the economics of free food is very different than the economics of free content -- and I'm not sure there's really that much to learn from the restaurant examples. For the chains that have done this, it's been somewhat successful (Denny's especially, for leading the way). The free food has ended up bringing in more paying customers in addition to the "free riders," so it's paid off. However, it does seem a bit riskier than using "free content" in a business model. The marginal cost of offering up free content is nothing. The marginal cost of free food, however, can be substantial. So, while it's an interesting model to look at -- and the success of the experiments so far shows how "free" can absolutely work as a promotion -- I'm not sure the free food promotions really teach us all that much about the use of free in the digital realm.
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