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The "Dangers" of Free
With today's Free Summit broaching the subject of the "dangers" of free, TechDirt has an interesting perusal of why free often can't work without a good business model and why it often gets such a bad reputation. "I tend to wonder if this is really a case of free gone wrong or free done wrong. First, I'm always a bit skeptical of 'free' business models that rely on a 'free' scarcity (such as physical newspapers). While it can work in some cases, it's much more difficult. You're not leveraging an infinite good -- you're putting yourself in a big hole that you have to be able to climb out of. Second, in some ways the model that was set up was a static one where everyone focused on the 'free' part, and no one looked at leapfrogging the others by providing additional value where money could be made. The trick with free is you need to leverage the free part to increase the value of something that is scarce and that you control, which is not easily copied. [...] Still, it's an important point that bears repeating. Free, by itself, is meaningless. Free, with a bad business model, isn't helpful either. The real trick is figuring out how to properly combine free with a good business model, and then you can succeed."
The problem with free (gratis) is that it doesn't pay the bills for the developer. I'm not talking about being greedy, but accessories like kids, spouse and house come in handy in winter :-)
That's why I have been giving more and more thought to a Fair business model, which would combine the best of two worlds: libre, but not gratis.
The distributed revenue sharing part we already solved with FairSoftware.
It would work like this: Corporations and end-user would have to pay for the service or software. But it wouldn't quite be commercial. The proceeds would be shared among the development team. But you could still retain the rights to see the source and modify or tweak it for your environment. Your only constraint is that if you redistribute, you must pay the licensing fee to the original team.
All it takes is to put more libre in the Software Bill of Rights. Volunteers?
Call it sustainable development if you will.
No business can succeed without a viable business model, regardless of whether or not it is based on delivering a "free" product. As far as free Danish newspapers, why would anybody pay money to print and deliver information that 99% of your customers could access for free over the internet, with a much lower marginal cost per customer? The Oregonian used to throw free newspapers in my driveway every tuesday and thursday; I had to tell them 3 times to stop because I consider it to be Criminal Trespass and Offensive Littering, both of which are unlawful in Oregon. It is not just a bad business model -- it is one which is actively offensive to potential customers which would rather save trees and know that most of these free newspapers go straight into the trash without even being read.
I've abandoned my search for truth; now I'm just looking for some useful delusions.
Free, by itself, is meaningless. Free, with a bad business model, isn't helpful either. The real trick is figuring out how to properly combine free with a good business model, and then you can succeed.
No. The author of TFA fails to grasp one major point - Sometimes no "trick" exists, period.
I get so sick of hearing business oriented people bitching about how "free" does or doesn't work, or how to make "free" work for them. They don't need to learn the tricks to making "free" work, they just need to learn that "free" means free, and none of us give the least bit of damn if they can make a profit or not.
I use (and create, though can't claim credit for any well-known projects) Free-with-a-capital-"F" software because I believe in it. I use free (lower-case) software because in my experience, it works just as well as non-free software, without all the artificial restrictions imposed to convince me to pay for "value added" BS ("Oh, you can't use critical-widget-X unless you buy the All-Things-X add on pack!"). I read free news because I don't care to pay for the opinionated rantings of various journalists (hint - Your job description involves reporting, not "change", quit pretending you can or should make a difference); when a tenth of the human population can reach the whole world with coverage of local events, reporters have very little role left to play. I even eat free fruits and berries while out hiking, because they taste a hell of a lot better than giant-but-tasteless garbage the industrial-ag market has tried to pass off as "food".
Put simply, I, and most people, like "free" precisely because of its standard definition - It doesn't cost us anything! As soon as you try to twist that, you haven't added a "trick", you've pissed us off.
So the "trick" to free? Don't call your product that unless you expect nothing in return. If you come crying with your hand out after-the-fact, don't worry, I won't laugh with you, I'll laugh at you.
No company exists that can make a profit without charging someone for something. If that was the point you were trying to make at the beginning, then... okay, point conceded.
But as for this question:
Please demonstrate a successful business model that relies on giving away the product for free.
You've already been answered by multiple posters. Broadcast TV/Radio. Regardless of whatever else they do to make money, they still produce a product and then give that product away to people for free. Same applies to the myriad phone book companies and software producers like Redhat or MySQL.
If you're trying to point out that no one makes money by giving EVERYTHING away for free, then by golly you're right, and are also keeping in theme with the subject line I used when I started this whole thread.
William of Ockham had no beard. The most likely explanation is that it was chewed off by squirrels every morning.