Free Does Not Mean No Business Model

from the repeat-after-me... dept

As we get ready for The Free Summit, I was thinking about some of the recent posts here on Techdirt, and realizing a really common fallacy that seems to destroy all debates around "free." It's the implicit assumption that "free" means no business model. We saw it with law professor Justin Hughes' defense of copyright in The Economist debate over copyright, where he states:
What we have now is a mixed economy for expression in which some expression is produced under a patronage model (foundation grants, universities), some expression is produced under the open source model (Linux, blogs), and some expression is produced under a profit/incentive model of copyright.
And we see it when David Simon goes to Congress and says:
It costs money to do the finest kind of journalism. And how anyone can believe that the industry can fund that kind of expense by giving its product away online to aggregators and bloggers is a source of endless fascination to me. A freshman marketing major at any community college can tell you that if you don't have a product for which you can charge people, you don't actually have a product.
Both of those statements are based on the implicit assumption that "free" means "non-profit" or "not a business." Yet, nothing is further from the truth. Free has always been a part of many business models, and when most supporters of "free" are talking about isn't that content creation and journalism go to an "all amateur/all non-profit" model. No one is saying that at all. We're saying that they need to learn to embrace other business models rather than rely on copyright as a kind of crutch.

When you've been relying on that crutch for so long, you forget that you have two legs of your own and can make do without the crutch. We're seeing it all the time, with content based business models that don't rely on copyright which have been shown to be more successful than the old copyright crutch business models. There are lots of ways to make money that involve "free" as a part of the business model.

So, from now on, whenever you see someone arguing against free, and implicitly assuming that "free" means there is no business model, correct them. Let them know that they're arguing against a total strawman. No one says the professional class of content creators or journalists is about to go away. We're saying that they'll earn their money in a different way, and it won't rely on charging directly for their content, but on other goods that their content makes much more valuable.

Filed Under: business models, free


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  1. icon
    Derek Kerton (profile), 11 May 2009 @ 2:05pm

    Re: Re: Re:

    Interesting you should ask. I did not do a CTIA summary for Techdirt, although I often write summary blog posts of the big telecommunications conferences for this site. I would have done so this time, but I have limited resources, so can't always get a Techdirt post up.

    However, I did summarize the activity from CTIA at a private CTIA debrief held through the Telecom Council of Silicon Valley, seen here
    http://guest.cvent.com/EVENTS/Info/Summary.aspx?e=614be418-e430-4755-bafe-369ee2db6759

    with photos here:
    http://www.telecomcouncil.com/photogallery.php?event_id=83

    You see, this is very on topic. As a Telecom Consultant and Analyst, I often put my thoughts out on Techdirt free of charge. In so doing, I get some exposure, some recognition, and ostensibly some amount of a reputation for quality. My past articles (since 2002) also stand for building a reputation of having been right on predictions.

    And I give that away for free.

    But the CTIA debrief was a scarce resource, in-person meeting in a room full of smart telecom execs from the region. I led a discussion on the hot topics out of the CTIA show, and we discussed the relevance and importance of key trends. I think I offered some intelligence on the issues, and I'm positive that the others in the room contributed to the overall value. An interactive session such as this is a product that cannot be easily reproduced. So, following the economics we discuss here, for this event, there was a fee.

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