Getting the "Free" Business Model Wrong Doesn't Mean the Model is Flawed

While "free" seems to be an increasingly popular business model, there are quite a few people who seem to be completely bungling what to do with "free" and then complaining when it doesn't work. Techdirt takes a look at some of the arguments surrounding why free as a business model may or may not work and why many of these arguments, while prevalent, just don't hold water. "you give away the infinite goods, not the scarce goods. Your time is a scarce good. No one is saying that everything needs to be free -- they're saying that infinite goods will be free, because of it's very nature in economics. In fact, Poole's argument is particularly weak when it comes to programmers, because most programmers don't earn any kind of royalties for the software they write. They are paid a salary, for their time -- but not for the software itself (which is an infinite good). And, I won't even get into the number of programmers who work on open source projects for free ... or the fact that Poole is blogging for free ..."

Comments

Paying for your time

[Anonymous Coward]

So, since the software itself is free, and all revenue is generated from service contracts and tech support, who pays for the time that went into the original software?

If the software was perfect, ie the original programmers had put enough time into it to completely debug the code, the user interface was simple and intuitive, no conflicts with other programs arose, etc...
    there would be no need for tech-support
    there would be no income from the software

So by giving away the software free, does that encourage buggy programming?

ABIL

Re:How ignorant.

[palegray.net]

I recently got paid for my time developing a product, negotiated an open license for it, and retained copyright to the code. I think if more programmers were simple aware of these options, and knew how to show their customers the benefits of such arrangements, we'd have a lot adoption of this practice.

Straw man argument

[Seska]

Score, you know better than that and you shouldn't be trying to use inflammatory rhetoric. The fact that a price/demand curve tends to a 0 price in no way implies that it goes infinite price.

In some cases there is no pre-creation demand, because no-one knows they want it. Examples include music from unknown artists, fiction from unknown authors, etc. In other cases the demand is better (though not perfectly) known: a new Radiohead album, an Indiana Jones movie, or spaceflight for tourists.