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. identicon
    DTH, 14 Jul 2009 @ 6:17pm

    "We're saying that they'll earn their money in a different way"

    Like what? Got any ideas? Maybe they could sell T-shirts. I don't mean to be flippant, but whenever people talk about "new business models" without explaining what those business models could be, it sounds as though the author is throwing up his hands.

    The scary thing, to my mind, is that the type of models newspapers are likely to successfully adopt are those that capitalize on the benefits offered by the distribution of news. And who benefits from the distribution of information? Well, hopefully everybody, you and me, anyone who wants to know this information. But corporations stand to gain a lot more from the distribution of information (or lack therof) than everyday people, and they're actually willing to pay to have this information distributed.

    The newspaper of tomorrow, to my mind, has a good chance of looking like a newspaper with ads in place of all the articles. We'll have news stories about the superiority of this year's new automobiles compared to last year's (sponsored by Ford), the rousing success of the latest government healthcare initiatives (paid for by the Federal Journalism Endowment Fund), and a human interest story about how much everyone loves Coca-Cola. Of course, it will all be free and widely available, as newspapers and sponsors alike will encourage bloggers to mention as many of these articles as possible. Welcome to the new Golden Age of Journalism.

    The best part is, all of this will play to the human instinct that wants to believe that everything is alright, that society in general is in pretty good shape. True investigative journalists and bloggers questioning journalistic practices will be easy to dismiss as fringe radicals and propagandists, and the majority of people will go on reading their free newspapers, unaware of the value that's been added.

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