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
    Homer Bigart, 8 May 2009 @ 7:20pm

    Bull.

    It costs $30 million to staff a cohesive newsroom -- be in online or in print, the delivery system doesn't matter -- that covers the major institutions and societal issues of a major metropolitan area and to do so in a systematic and professional way -- which the internet has not yet managed to remotely achieve through blogging and citizen journalism. The dishonesty and double-speak of new media advocates who refuse to acknowledge either this cost or the inability of blogging to achieve comprehensive daily beat reporting -- not just attending hearings or taking press releases, but working sources and countering institutional spin -- of police departments, school systems, mayors, city councils or state legislatures, well, it's downright embarassing. Simon is calling for standards in journalism that are like the water in everyone's well -- when it goes dry, and it is already happening, they will be sorely missed.

    If they don't charge for content online they have no way to pay the extraordinary cost professional journalism save for online advertising and that has proven to be miniscule in its rates and utterly insufficient to replace the losses in print circulation and advertising revenue.

    That's just fact. Everything above amounts to the theory of dilettantes.

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