There’s been a lot of concern lately that Web-driven companies are headed toward another bubble burst. Among the warning signs: (too) cheap venture capital; companies built to sell-off, not for the long-term; and a proliferation of me-too startups.
Could this be another warning shot: “free” as a business model?
Maybe yes. But maybe no.
Recently, the Web has seen several high-profile experiments launch or get floated.
In one instance, the band Radiohead bypassed a record label contract and instead offered its latest album via its Web site for *whatever* users wanted to pay. Including nothing.
In another example, Universal is rumored to be trying to bring together other record labels to work with music device makers (such as Microsoft) to offer customers free, unlimited music subscriptions if they purchase a compatible hardware device.
Are these two music-industry anomalies? Or is free the new pricing baseline for Web-based businesses?
The reality is that neither of these offerings, of course, is truly “free.” Rather the costs to the consumer are either subsidized by secondary purchases (a very common strategy, for instance, in the cellular industry).
Read more.
Photo by bizior.
Is ‘Free’ a Small Biz Model?
February 27, 2008 by Rich | 4 Comments
In Free, Strategy, Success
Navtej Kohli on February 27th, 2008 at 10:42 pm
Internet is an avenue that opens doors to anything and everything. I suppose the business models on Internet are not stable and it’s not surprising if free is the new business mantra.
edwarddupre.com on February 27th, 2008 at 11:24 pm
I read about this business model just the other day and it is true. Gillette was one that started it with razors!
Homejobsite on February 28th, 2008 at 7:22 pm
I have been using the word free for years now, and in fact it preludes my opening phrase on my Website. It has always been a great opener with no signs of slowing. At least for my business anyway.
Dane on February 29th, 2008 at 11:14 am
Free is my small business model with this website.