I have read Seth Godin. He is a good writer and creative thinker. I agree with him much of the time (although I’m not in his tribe). But this time he’s wrong — twice! (sorry, Seth)
First, when he writes:
“should we want free to be the future?”
Who cares if we want it? It is.
Second:
“… how will this new business model support the world as we know it today?”
Who cares if it does? It is. (emphasis added)
Free is Not New, Not Revolutionary. Heck, It’s Not Even a Business Model. Someone Always Has to Pay for Something
Free is not the future. It is the past.
- In 1886, 28-year-old David H. McConnell, who sold books door-to-door, gave out perfume to entice women to buy his books. (The perfume became more popular than the books, so he started the company that became Avon)
- The Gillette company still markets disposable razors in the fashion of their founder, often sending disposable safety razors in the mail to males near their 18th birthday, packaging them as giveaways at public events that Gillette has sponsored
- Standard Oil and its owner, John D. Rockefeller, looked to China to expand their business. Representatives of Standard Oil gave away eight million kerosene lamps for free or at greatly reduced prices.
- Comcast often gives away DVRs to its subscribing customers. However, the cost of giving away each free DVR is offset by a $19.95 installation fee as well as a $13.95 monthly subscription fee to use the machine. Based on an average assumed cost of $250 per DVR box to Comcast, after 18 months the loss would balance out and begin to generate a profit (did I mention how to get a free year of HBO from Comcast? I will)
- Cell phones are offered for free or at a low cost to subscribers who enter into a contract that is typically between 12 and 24 months
(Source: Wikipedia.)
I remember when network TV content was free, paid for by Geritol and Ben-Gay (who hoped I would one day pay them back). Comcast Cable now charges me for content (an increase every year). (There’s no Ben-Gay– but HeadOn says I apply it directly to my head.) If we went back to the free future, we’re back to Ben & Geri. Not revolutionary. Not new.
To claim Free is the new business model is to sell old smoke on new mirrors (which still sells rather well). Free is a marketing model, not a business model. As a business model, free will never pay a light bill. Someone always pays or it’s lights out.
If, by some Godin-Andersonian miracle, a free model comes to wipe out Comcast Cable, I will buy Seth Godin and Chris Anderson dinner at Mendy’s.
(A Comcast tip: Tell the Comcastians you’re dropping HBO because you can’t afford it. Guess what? They’ll give you a year free! “WTF?”, I told the rep, “why didn’t you give me, your loyal, long time customer, the free year before I called? Comcast sucks.” P.S. I don’t care if Comcast has a Twitter guru. They still suck… money. But I digress.)
A Duh Moment: Free Gets Attention
Seth writes, “Free is a relatively cheap way to get attention. “
Duh. There’s nothing new in that statement. Free is an old marketing technique. Free samples have been used to get attention since Gutenberg gave away free Bibles. But unless someone pays for the ink, the presses stop. The cost of production may be close to zero but it is never zero– and even if it were, to charge nobody nuthin’ is a guarantee of no profit.
Getting attention is not the same as getting paid.
Free Has Already Lost Its Value
Godin writes: “In a world of free, everyone can play. This is huge“
This is the huge problem, Seth.
When everyone plays with this cheap way to get attention, value gets lost in the Sea of Free. Free gifts, free samples, free vacations, free make-overs, free followers, and all other kinds of free stuff clog up the airways. Let in all the sounds and it’s hard to hear the music. In a democracy of free, the tryanny of crap rains down on us (pun intended).
And that’s the point of free– to hide value (or the lack thereof)—charge nothing and folks don’t need to look for value. In other words, free is designed to remove a consumer’s value objection.
Free has become the language of the scammer and the spammer. I’d argue Free has become a warning signal to the savvy, as it remains a siren to the sucker.
You just can’t trust free anymore, Seth. I offer you a free lunch. Will you take it? See what I mean.
Price is not Value and Value is the ONLY Business Model
Price is what you pay, value is what you get. ~ Warren Buffett
Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality. ~Peter Drucker
Unless you provide value, pricing something, anything, at zero means nothing.
In the end, value is the only business model. And folks WILL pay for value (on this, Seth is right. Unique content works. Quick content is enough. Convenient content is enough. Even pretty content gets paid).
If value is the key, why are we talking about free?
Free is the Wizard’s Curtain. Let’s get to the OZ.
If you really want a new pricing model, try this .
PS: Like Seth Godin’s new model of blogging, there will be no comments on this post. (Aah …. funny, it looks like an old newspaper publisher model to me).
Further Reading on the Free Debate:
Priced to Sell (Malcolm Gladwell)
The Limitations of Free (Guy LeCharles Gonzalez)
Free v Freely Distributed (Mark Cuban)
Gladwell, Anderson and Godin: All wrong for the typical writer (booksahead.com)
Technorati Tags: seth godin, chris anderson, malcolm gladwell, selltoon
