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
    Kiba, 9 May 2009 @ 12:55am

    Government Regulation is a Grim Solution(If at all) to Your Concerns

    What you're doing is imposing your own idea of what consitutes "high-quality, socially valuable journalism". If nobody doesn't want it, than there isn't a single onces of hope that it will be supported short of government intervention.

    The fact of the matter is, the role of profits is to merely show where resource should be allocated to satisfy the demand, that is...the masses. However, there is no reason to think that the miniority will not get served. Indeed, if the minority really want "socially valuable news" to spend enough money on it, than an industry will naturally prop around it. That industry satisfy a niche and everybody get along happy.

    Government regulations will be a very grim way to achevie what you desire, if it is at all successful. Regulatory agencies by their very nature are political machinery. It seeks to satisfy only the insiders, and nobody else. Even in a democracy, the insiders are the majority. It will then use the only thing it know how to solve any problems, the use of brutual violences and threat. To support the goal of the regulatory agencies, it must forcefully take money from the taxpayers to fund its quintoxic quest of reshaping society in accordance to an insider-view of how the world should be. In accordance of being unaccountable to the public at large, it will develop overly expensive ways of enforcing their content standard. This lead to less resource that can be allocated to other area such as health care.

    A much more peaceful, easier, and cheaper method of acheving your goal without smashing your man's fellow diginity is a matter of convincing your fellow man that objective, well researched journalism should be supported and that they shall take actions to promote this views by voting with wallets.

    Indeed, it won't eliminate all the pockets of alarmist headline journalism that men are so gulliable of. However, this is the nature of the market, to satisfy all and any desire for a price.

    You have the freedom and rights(within reasonable limit) to try to convince them that their consumption of poor quality news is a bad idea but under no circumstances that you have the right to lord over other people's lives unless it directly involve you.

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