Free or Fee Debate
There is a new book out by Chris Anderson, the editor of Wired – Called “Free - The Future of a Radical Price” – If you look at all mediums since their inception, broadcast television, radio & internet search are all free and use advertisers to foot the bill. Social Media is basically free to users. News and information is free online unless you want to pay for premium content. Is the premium content really better than all the free content?
Would people use Social Media if it cost money? How many people would really be on Facebook? How many You tube videos would be posted if there were a cost? There is a cost to the platforms in bandwith and storage. Google is not making money from You Tube, it is actually going to lose half of a billion dollars. Facebook is now using very targeted ads based on profile info and status updates and may get into the black in the next couple of years, but the impact of the ads is still unknown. How does Twitter bring in money? Most blog platforms are free so how do they monitize?
Malcolm Gladwell & Seth Godin entered the “debate” and are my two favorite writers and I got immursed in their thoughts. Read all the articles here: http://tr.im/r5BW (BTW -which are all FREE )
They talk about the psycology of free. It is either free or a cost. Free means abundancy.
Chris Anderson Writes
“Give a product away, and it can go viral. Charge a single cent for it and you’re in an entirely different business. . . . The truth is that zero is one market and any other price is another.”then says” magic of the word “free” creates instant demand among consumers, then Free (Anderson honors it with a capital) represents an enormous business opportunity.”
Malcolm Gladwell states (read entire article here http://tr.im/r6sM )
“There are four stands of argument here: a technological claim (digital infrastructure is effectively free), a psychological claim (consumers love free), a procedural claim (free means never having to make a judgment), and a commercial claim (the markedt ccreated by the technological free and the psychological free can make you a lot of money).”
Seth Godin states (read entire blog post here http://tr.im/r6ni )
“People will pay for content if it is so unique they can’t get it anywhere else, so fast they benefit from getting it before anyone else, or so related to their tribe that paying for it brings them closer to other people. We’ll always be willing to pay for souvenirs of news, as well, things to go on a shelf or badges of honor to share.
People will not pay for by-the-book rewrites of news that belongs to all of us. People will not pay for yesterday’s news, driven to our house, delivered a day late, static, without connection or comments or relevance. Why should we? A good book review on Amazon is more reliable and easier to find than a paid-for professional review that used to run in your local newspaper, isn’t it?
In a world of free, everyone can play. The reason that we needed paid contributors before was that there was only economic room for a few magazines, a few TV channels, a few pottery stores, a few of everything. In world where there is room for anyone to present their work, anyone will present their work.”
As a big user and proponent of social media, I am ecstatic about all the platforms being free. It makes my audience size bigger. My goal is not to directly make money from Social Media either though. I believe in the give to gain methodology. I will indirectly grow from its use because I will contribute, add value, build community and relationships and gain a following by being a trusted resource and expert.
That is what I believe and teach. I believe you have to give your content away for free to generate mass traffic and garner attention. I do not just mean the price, but also without registration. If you make people enter their email or something, that takes away the free component. You are asking for information in exchange for content. This is not free. People will less likely share it with their network.
I also believe just because it is free doesn’t mean it will work. There is a lot of good free information out there and if yours offers zero value or substance, it will be invisible because you are competing with a more costly and valuable asset that the reader is giving up to view your information… TIME.
So I look at content as educational marketing. It has to be a value proposition and has to do more than just teach. It has to be a platform to create community, engage your audience and be truly intended to build long term relationships and advocates of your brand.
I do not know if online content and social media will always be free, so we all need to take as much advantage as we can while it is FREE.
I would love to hear your thougths on this debate.
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“Free” is a tough one for business. For example, as a long-time bank marketer, I have seen this apply to our industry in the past decade. In order to be competitive, banks have to give away one of their highest-cost products—checking. And the, once checking was free, free online banking and free bill pay soon followed, even though there is a substantial per-customer cost to the bank each month to provide these services. People expect to get checking, online banking, and bill pay for free, even though their deposit balances often don’t warrant it. Social media is having the same challenge. In order for businesses to make money and therefore survive, they cannot afford to give their services away for free. I wonder how Facebook, MySpace, YouTube, and others will survive, giving away their services. Advertising cannot carry it all (especially since the advertising seems to have limited value to consumers of these services).
My local community newspaper recently announced that they will charge for viewing their newly-created online version of the paper. I cannot imagine that they will get many people to pay for it. I will continue paying for the newspaper because it is tangible and it is the only way to get it, but I would not pay for the online version. I have been spoiled and I think it should be free. I think this issue has far-reaching effects, not only on the future of social media, but for traditional media as well.
Once people get something for free, they won’t pay for it, even at the risk of losing it. I wonder how social media providers can survive.
I find most discussions of this topic, including the Gladwell/Anderson dust-up, too imprecise to be very informative or interesting. Saying things like “Content wants to be free” is like saying “Food tastes good”. Some does, some doesn’t. Content is not one thing. There are many different types of content, each with its own nature, purpose, and meaning. Furthermore, any given type of content has one or more instance types, each of which is function of at least three things: the kind of information (video, audio, text, animation, etc.), the delivery context, (web page, social network, real-time link, etc.), and the purpose (news, entertainment, documentation, etc.) When you put those things together, you get content instances like books, movies, magazines, games, and other things which existed before the web, and things like blogs, social networks, and search results which did not.
The question of fee or free for the first group yields a messy donnybrook between the pre-digital dinosaurs who can’t or won’t adapt to the new climate and the viral hosts who think it feels just fine. But that is not what you are asking about, anyway.
Across the spectrum of intrinsically digital content types, value is in part a function of currency and uniqueness, to be sure. But a bigger part of the equation is, in my opinion, the balance between signal and noise which is manifested differently across the various content instance types.
In search engine results, the signal is the set of hits that answer my question and the noise is the plethora of ads and random syntactic schmutz that stick to the key words I happened to use in my search predicate. Using Google and Bing are like trying to fish your car keys out of a sewer with chewing gum on an stick. You may get what you want, but you will certainly get a lot of what you don’t want.
Will I pay for semantic search mojo that reads my mind and knows my heart’s desires? We’ll see when it gets here, if I am still alive by then. But, today I would gladly pay dearly for web search that works like the old Dialog service and other pre-web text search services, allowing for rich search expressions with terms for word proximity, capitalization, conditional exclusion and so forth, and that does not include advertising for things I am not looking for.
In product and service reviews, the signal is accurate, truthful, detailed, actionable information and the noise is vague, uninformed opinion. I gladly pay for Angie’s List because it has lots of signal and almost no noise. If I type in “lawn care”, like the pre-web yellow pages it tells me who provides that service in my area, but, unlike the yellow pages it tells me exactly how far away each one is from my house, and, more important, it tells me about the specific experiences of their past customers.
In a social network, the signal is meaningful, relevant and valuable connections and the noise is spam and vanity. I would probably still use Linked In if I had to pay for it because it is a useful business tool. I can’t say the same for Facebook. I would pay for a good guitar lesson on YouTube, but not to see a squirrel on water skis.
In general, though, the best, most fee-worthy social media is where everyone pays in the same currency, e.g. on Angie’s List the vendors and their prospective customers, the reviewer writers and readers all pay with money, not some with money and others with eyestrain, and where one person’s signal is not another person’s noise, like Google’s advertisers and searchers.
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