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
    Doctor Strange, 9 May 2009 @ 12:36pm

    Wrong. I don't know that, in fact I disagree. I smell yummy cinnamon-scented air when I transfer at airports. It's from Cinnabon's buns.

    Somebody paid for that, just not you. Or maybe you did, by buying a Cinnabon last time, which gave them the money to continue operating and make more cinnamon-scented air for you next time you're blowing through town. You didn't pay cost for that Cinnabon.

    "Everything must be paid for." Honestly! Such drivel. How much does my kid pay me for the love I give them? For the goods I give them?

    You get paid for both those things. Your kid pays you in respect or obedience or love, or maybe in social standing by providing something you can point at and say "wow, look at the little copy of me! Isn't she great? I made that! By extension, I must be pretty great, too!" Maybe the effort of parenting satisfies a basic, inherent need you have for fulfillment that you're not getting met at work, or by something else you do. Maybe you're operating your kid as an investment, so you have somebody who might feel obligated to take care of you in your old age. Maybe you didn't really want a kid, but you provide goods to it because it's state-mandated that you do so, and there are artificial penalties for NOT doing it.

    If you have any doubt that you don't get something out of the arrangement, then ask yourself why you aren't giving any love or any goods to my friends' kids, except maybe a little bit through taxes.

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