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The "Dangers" of Free

ScuttleMonkey posted more than 5 years ago | from the poor-execution-kills-even-good-business-models dept.

Businesses 242

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."

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Fair beats Free (5, Interesting)

alain94040 (785132) | more than 5 years ago | (#27910541)

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 [fairsoftware.net] .

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.

Re:Fair beats Free (3, Interesting)

tritonman (998572) | more than 5 years ago | (#27910639)

This is more than a software issue though, when it gets to services such as newspapers, this is where more problems come into play. Lots of people losing jobs at newspapers and whole businesses going under because of the flux of online news sites, many of which just repost stories written by newspapers and sometimes have conflicting information. What can you do about this though? Nobody wants the government to regulate all of this, but what can be done without it?

Re:Fair beats Free (5, Insightful)

q2k (67077) | more than 5 years ago | (#27911093)

The problem (with newspapers specifically) is that newspapers are not in the news business. They are in the advertising business. News was an excuse to sell eyeballs to advertisers. There are more efficient ways today to match up buyers and sellers, so newspapers are suffering.

Re:Fair beats Free (1)

DeadDecoy (877617) | more than 5 years ago | (#27911659)

I dunno, I always thought news served many purposes. The primary would be advertising, the original was to use it as a political platform, and a third might be to inform the public about general happenings in the world (i.e. a projected drought or disaster two towns over.) I think some of these will persist, even with the demise of newspapers, mostly because they serve people's interests. Advertisers would probably migrate to google news, political pundits will still air their grievances of the current party, and locals might just make smaller rags to discuss what's happening in their own town.

Re:Fair beats Free (3, Insightful)

mattwarden (699984) | more than 5 years ago | (#27911181)

Nothing should be done about it. It's a dead business model. It's called economic advancement, and it raises the standard of living of everyone in the long run. Yes, in the short run people lose their jobs and have to retool. But currently they are in a position where they create things of little value, and they should be moved into something that creates more value.

Re:Fair beats Free (2, Insightful)

vlm (69642) | more than 5 years ago | (#27911187)

many of which just repost stories written by newspapers

newspapers don't write stories, unless you count the captions underneath pictures of kids, "human interest" stories about kittens rescued from trees, and complimentary (paid) copy about new business "grand openings" etc.

The real "stories" all come from yesterday's AP or Reuters news feed.

Re:Fair beats Free (2, Interesting)

Volante3192 (953645) | more than 5 years ago | (#27911543)

And who pays those AP/Reuters reporters?

Re:Fair beats Free (5, Funny)

Anonymous Coward | more than 5 years ago | (#27911713)

And who pays those AP/Reuters reporters?

Hamas?

Re:Fair beats Free (2, Informative)

honkycat (249849) | more than 5 years ago | (#27911561)

In some places that may be true, but the big guys have (or once upon a time, had) reporters of their own who produced content, particularly local news Big city papers are a bit different from smaller local papers in that regard.

Re:Fair beats Free (1)

unlametheweak (1102159) | more than 5 years ago | (#27911231)

This is more than a software issue though, when it gets to services such as newspapers, this is where more problems come into play. Lots of people losing jobs at newspapers and whole businesses going under because of the flux of online news sites, many of which just repost stories written by newspapers and sometimes have conflicting information. What can you do about this though? Nobody wants the government to regulate all of this, but what can be done without it?

"What can you do about this though?" In regards to IP theft the RIAA et al have already figured this out. Sue the shit out of people. With software there is the Business Software Alliance, some similar type of corporation (like the FSF) can be utilized or created to work with enforcing open source ("Free") software. The "market" will take care of the weak who don't adapt or find other employment opportunities. In "socialist" countries there are welfare and unemployment safety nets to help with transitioning economies and companies.

"Nobody wants the government to regulate all of this, but what can be done without it?" If by "nobody" you mean nobody on Slashdot then you may have a point. Regulation, when you are talking about regulating businesses, is designed by and for the business lobbyists. Most other people don't give a shit unless there happens to be an election issue about "free markets" or some such thing. Regulation isn't always a bad thing. Trying to make it fair for everybody is the tricky part. There is no such thing as Utopia, despite those pretenders out there who charter towns.

Re:Fair beats Free (1, Insightful)

Anonymous Coward | more than 5 years ago | (#27911463)

Newspapers don't sell news to readers, they sell eyeballs to advertisers. A "free newspaper" is a meaningless term, since the readers are not the clients...they are the product. The newspaper "price" is just a discount on the eyeball purchase price.

Is ebay's business model doomed because they "give away" their auction listings for free? No, because they bridge two networks (buyers and sellers), and charge one of those groups a transaction commission. The more buyers that leech off of ebay, the more the sellers are willling to pay.

All of this assumes, however, that the newspaper is ad-supported. If you start a for-profit, ad-free, free newspaper that is delivered for free, then you are just fucked.

Re:Fair beats Free (5, Funny)

Anonymous Coward | more than 5 years ago | (#27910649)

...accessories like kids, spouse and house come in handy in winter :-)

Name three things you really shouldn't burn just to keep warm. Sicko.

Re:Fair beats Free (0)

Lumpy (12016) | more than 5 years ago | (#27910663)

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 makes no sense. Are you rendering the children into oil for heating and eating the wife? That can get incredibly expensive.

I cant see how they can help come winter. A home might if you stay in one place, But I prefer to migrate with the climate change.

Re:Fair beats Free (1, Funny)

Anonymous Coward | more than 5 years ago | (#27911251)

The kids to carry wood, cleanup the house, and cook.

I think even slashdotters can figure out a good use for the spouse while stuck inside during a cold winter.

Re:Fair beats Free (3, Interesting)

maxume (22995) | more than 5 years ago | (#27911403)

I suspect you've got it backwards -- the wife will likely render far more oil and the kids should be quite a bit more tender.

Re:Fair beats Free (5, Funny)

suggsjc (726146) | more than 5 years ago | (#27911943)

Only on /. could this comment be moderated "Insightful" which as disturbing as it is, I guess is true...

Re:Fair beats Free (2, Interesting)

speedtux (1307149) | more than 5 years ago | (#27910691)

The problem with free (gratis) is that it doesn't pay the bills for the developer.

If it didn't pay the bills, people wouldn't actually be doing it so much.

My experience has been that free, gratis, and open source software has considerably more staying power and commercial support than most commercial software.

The distributed revenue sharing part we already solved with FairSoftware

And how is that working for you?

Re:Fair beats Free (3, Insightful)

DaveV1.0 (203135) | more than 5 years ago | (#27911477)

If it didn't pay the bills, people wouldn't actually be doing it so much. My experience has been that free, gratis, and open source software has considerably more staying power and commercial support than most commercial software.

I have noticed that most "free, gratis, and open source software" is crap, is written by students or people in their spare time, and once the writer (because most of it certainly isn't engineered) has to actually make a living, the software stagnates.

If you don't believe me, head over to source forge or fresh meat and see for yourself.

considerably more staying power

Yeah, right. There is a difference between staying power and "hanging around like an ugly lamp no one has bothered to get rid of"

and commercial support than most commercial software

Apparently, you don't understand the words you are using.

Re:Fair beats Free (2, Interesting)

honkycat (249849) | more than 5 years ago | (#27911611)

I have noticed that most "free, gratis, and open source software" is crap, is written by students or people in their spare time, and once the writer (because most of it certainly isn't engineered) has to actually make a living, the software stagnates.

While that may be true, I've noticed that most commercially produced software is also crap, only with a thin shiny veneer on the outside, just thick enough to generate sales. A polished turd is still a turd...

So anyway, yeah, there's a lot of crappy free software, but there's also an awful lot of good free software too.

Re:Fair beats Free (5, Insightful)

digitig (1056110) | more than 5 years ago | (#27911677)

I have noticed that most "free, gratis, and open source software" is crap

So is most non-free, non-gratis and closed source software. You just don't notice it so much, because you tend to do more research to find the good stuff before handing over your hard-earned, whereas just a click to try something out seems so easy and tempting.

You're making the classic blunder (3, Funny)

wiredog (43288) | more than 5 years ago | (#27910733)

No, not a land war in Asia. From here [chaosmanorreviews.com] :
  The Open Source and CopyLeft people are acting as if common sense prevails in US copyright law, and they are, I am told, dead wrong.

Re:Fair beats Free (5, Insightful)

nine-times (778537) | more than 5 years ago | (#27910753)

Your only constraint is that if you redistribute, you must pay the licensing fee to the original team.

I guess that's part of the problem right there: what constitutes the "original team". I assume the project can't be forked, or else you'd have to continue to pay the original team? And how much payment is warranted in that case? As you phase out the original code with your own, can you pay less? What If I just want to grab some small part of code for a totally different project, do I have to negotiate separate licenses for each piece, or do I have to pay a blanket fee as though I'm going to distribute the entire project?

Maybe "FairSoftware" has all the solutions to these questions, but it seems like these are lots of potentially complicated issues. I would guess that, the more complicated the licensing issues, the less readily people will be to contribute.

Re:Fair beats Free (1)

jellomizer (103300) | more than 5 years ago | (#27910803)

The problem with the Fair Software model is that it doesn't seem to take expansion into the picture. When you run an at cost business then you have no capital to expand with, unless you want you developers to take a pay cut as you expand the company. Or for every employee you hire it is considered less pay the the original programmers pocket.

Re:Fair beats Free (2, Insightful)

h4rr4r (612664) | more than 5 years ago | (#27910839)

If you cannot distribute your modified source without paying somone you do not have any freedom at all.

The owners can just change the price to $1 million the minute they decide they no longer want to compete against you or see your derivative work out in the world.

Re:Fair beats Free (2, Interesting)

mattwarden (699984) | more than 5 years ago | (#27910907)

Good idea, but it won't work. You're essentially asking the community that is currently giving away software to decide, collectively, to start charging for it. That isn't going to work, for the same reason that music CDs no longer sell. There will always be a way to get a comparable product for free.

The value of software is no longer its functionality. It's intellectual property (controversial to say here, I know), warranty, support, and documentation.

Think back a decade ago when we were all getting paid $40/hr to "code" HTML. The market eventually realized that HTML is not a valuable skill. Today, it is an expected add-on that has little marginal value.

Re:Fair beats Free (2, Interesting)

Red Flayer (890720) | more than 5 years ago | (#27910917)

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.

Re: the part in bold: how is that not commercial? Just because the revenues are shared by the developers? The very fact that you're charging for the use of the software makes it commercial.

Maybe I'm not understanding this properly... but it seems what you are describing is the status quo under copyright. End-user (be it corporate or not) pays a license fee to use the software. They can tweak it as much as they like, but if they want to distribute, they have to pay royalties to the holder of the copyright.

It doesn't matter if the copyright holders are the developers, as you mention, or the corporate overlord of the developers, or one guy in his basement.

How is this different from the non-free business as usual copyright system?

Re:Fair beats Free (3, Informative)

jmcvetta (153563) | more than 5 years ago | (#27910955)

The problem with free (gratis) is that it doesn't pay the bills for the developer.

I manage to pay my bills -- which in Boston are not inconsiderable -- by writing Free Software.

Re:Fair beats Free (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27911517)

I manage to pay my bills -- which in Boston are not inconsiderable -- by writing Free Software.

Did that make you a "gloomy, miserable wretch"?
http://www.43things.com/person/jmcvetta [43things.com]

Re:Fair beats Free (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27911971)

Re:Fair beats Free (1, Insightful)

Anonymous Coward | more than 5 years ago | (#27910977)

The problem with free (gratis) is that it doesn't pay the bills for the developer.

That's only true if you view the gratis software as the product, instead of being a component of the product.

Your customers aren't buying software. They're buying a solution. Don't focus too much on the software. If so, you're doomed to fail. In a free market, the cost of software will tend drop to zero since it's an infinite good. It is scarcities you should be selling, such as reputation, software support, software customisation, etc.

Re:Fair beats Free (2, Insightful)

Jah-Wren Ryel (80510) | more than 5 years ago | (#27911063)

Your only constraint is that if you redistribute, you must pay the licensing fee to the original team.

Your proposal has gots lots of problems

1) It is just another variant on creating artificial scarcity of a non-scarce resource. Trying to restrict distribution is like trying to prevent people from talking to each other.

2) Few people are going to contribute casually to any such project due to the restrictions on redistribution and the almost certain unfairness in distribution of funding. For example: who should get paid more - the average coder who churns out hundreds of lines of code and spends hours each day doing it, or the smart guy who frequently does the equivalent in a few minutes and a handful of lines? Whose going to decide without a complete employee/employer relationship?

Like the article said, if you want to make money, you need to focus on controlling what is naturally controllable - scarce resources like the labor that goes into the creation of the software.

Re:Fair beats Free (4, Interesting)

Just Some Guy (3352) | more than 5 years ago | (#27911227)

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 :-)

News to me. My boss lets me release my work projects [sourceforge.net] as Free Software because they're not related to our business (i.e., we need their functionality but only as a means to an end) and we're not set up to handle software sales or support. If we're not going to make money off it, and someone else could use it, then why not? We've gotten bug reports and feature requests that made it work better, so we're actually better off for having given it away.

I think you'll find that the vast majority of FOSS comes from similar situations.

Re:Fair beats Free (1)

windsleeper (1158491) | more than 5 years ago | (#27911241)

Your concept of the original development team continuing to be paid long term for work they did once, is an idea that really runs counter to economic theories of "free". Once the content is created, it can be duplicated electronically for a marginal cost of zero, and therefore is considered an infinite good whose cost will tend towards zero in a free market. Therefore, you should be concentrating on being paid fairly for your scarce good. In your example, your scarce good is the time, effort and expertise put in to the creation of the software. Get paid fairly upfront for your efforts and let the software go for free after that. Or, alternatively, if you want to be paid long term, you must invest in a long-term scarce good, such as product support. Any attempt to be paid for each transaction involving an infinite good is really futile, without artificial constraints (like copyright law, government-mandated monopolies, etc.)

Re:Fair beats Free (3, Interesting)

randallman (605329) | more than 5 years ago | (#27911371)

This sounds similar to what I want to do. I wrote about it a few months ago here [tnr.cc] .

  1. free to view
  2. free to modify
  3. free to redistribute AFTER some time period

There's some more to it (see link), but the idea is to have the effect of a reasonable copyright period. Say 7 years. I'm working on some software now that I want to release under this license within 6 months. I would be very interested in discussing this further.

Re:Fair beats Free (1)

Dishevel (1105119) | more than 5 years ago | (#27911581)

7 years seems a little long in the software world.

I've got a job & kids, so no thanks (0)

Anonymous Coward | more than 5 years ago | (#27911489)

I work on free software projects because my job promotion means I dont do enough really geeky stuff and more middle management crap. I dont watch sports on TV but listen to tons of podcasts while I debug stuff so this is how I use my spare time.
Your model offers hobbyists and students like I have working with me anything we dont have.

I work on 3 different projects and the majority of developers are in the same boat. You seem to have more paid developers working on stuff like the kernel, OO and others and less people on some KDE widget.

You are offering basically another license in a sea swimming full of them. Put it on top of the others and Ill give it a look sometimes.
But I work on these projects BECAUSE of the GPL, its what attracted me to it in the first place.

Re:Fair beats Free (0)

Anonymous Coward | more than 5 years ago | (#27911873)

You just got chewed out by everyone that knows you are talking out your ass.

Not only is your product a piece of shit, but it has nothing to do with the implied false scare of "free" that the article is talking about. Your idea of fair? please. Fair as a term with no explanation by you means nothing.

Having to pay is not free. All you are doing is saying "pay the developers directly" which is actually a worse idea than just buying software. Just have a service on top of the free thing to get people to be willing to pay, duh. This is not a hard concept and works for lots of stuff already. How do you not understand this concept?

Niggerdick (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27910607)

Niggerdick. That is all.

The Dangers of Jews (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27910611)

Greed, treachory, money-lust, violence, hook nose

Combine free with a good business model (1, Funny)

Anonymous Coward | more than 5 years ago | (#27910685)

Volume.

That's how you make money on "free."

Re:Combine free with a good business model (1, Funny)

Anonymous Coward | more than 5 years ago | (#27910969)

Volume [emp. added].

That's how you make money on "free."

No wonder my free business model has not been working! I need to turn it up to 11!

WTF is going on? (-1, Flamebait)

courteaudotbiz (1191083) | more than 5 years ago | (#27910775)

Can you tell me what the f**k has been going on lately with all those "anonymous cowards" posting bogus messages at the top of every story? I think this "post anonymously" checkbox should be removed, and one should always be authenticated to post something on /.

Anyway, have you ever seen one of those chicken bring anything useful to the conversation?

Re:WTF is going on? (-1)

Anonymous Coward | more than 5 years ago | (#27910823)

Fuck you, dude.

Re:WTF is going on? (2, Informative)

PCM2 (4486) | more than 5 years ago | (#27910867)

Yes, people often post useful information anonymously when they don't want to be recognized by their employer or for some other reason. It's part of what has made Slashdot a success, so just get used to it. You might also want to read up on the moderation system.

And, occasionally the trolls are very funny, IMHO.

Re:WTF is going on? (1)

drinkypoo (153816) | more than 5 years ago | (#27911499)

It's not a big deal to register a troll account, many cowards have done so.

Re:WTF is going on? (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27910975)

Someone sounds upset about getting goatse [goatse.fr] 'd.

Or can't accept the fact that they enjoyed it.

Re:WTF is going on? (1, Informative)

Anonymous Coward | more than 5 years ago | (#27910999)

Can you tell me what the f**k has been going on lately with all those "anonymous cowards" posting bogus messages at the top of every story?

Sure but you won't like it. You see, most of the time that they post nigger jokes, frosty piss, GNAA, goatse, and other gibberish, they wonder if somebody like you will get offended and respond. Sure enough, somebody almost always does. When you do, not if you do but when you do, because you can't seem to resist, they feel gratified like they got a rise out of you. Now somebody paid attention to them so now they are encouraged to do the same thing again. Ever heard of "don't feed the trolls"? That's why they tell you not to do that. So good job, while bitching about the problem you are also actively making it worse.

Signed,

A Niggerjoke-Posting AC.


P.S. Of course the other reason why I post niggerjokes is to illustrate the stupidity of getting upset over the things said by random people on the Internet. You're welcome.

Re:WTF is going on? (2, Funny)

Red Flayer (890720) | more than 5 years ago | (#27911021)

Can you tell me what the f**k has been going on lately with all those "anonymous cowards" posting bogus messages at the top of every story?

Yes. Yes I can. But then I'd have to kill you, because it's a steganographic mechanism to secretly pass messages regarding the oncoming takeover of the coroprate world by rabid fundamentalist Linux enthusiasts operating from secret silos underground (but not deep underground -- usually it's just basement-depth).

Oh, dammit, looks like I'll have to kill you after all -- I let it slip. Me and my big mouth.

Seriously, YMBNH. Or just incredibly slow, to only pick up on the weak AC FP trolling now.

Re:WTF is going on? (1, Insightful)

Anonymous Coward | more than 5 years ago | (#27911053)

Can you tell me what the f**k has been going on lately with all those "anonymous cowards" posting bogus messages at the top of every story? I think this "post anonymously" checkbox should be removed, and one should always be authenticated to post something on /.

Anyway, have you ever seen one of those chicken bring anything useful to the conversation?

Some of us have applied for an account but our email service keeps eating the emails, or /. is having issues. Take your pick.

I would have you know that I have gotten a couple of +3 interesting posting as an anonymous coward. So yes, I'd say that one of us have brought a couple of useful things to the conversation.

Re:WTF is going on? (1)

Burkin (1534829) | more than 5 years ago | (#27911071)

Welcome to slashdot. ACs have been first posting and crapflooding for years now it is hardly something that has only been happening "lately". Unless by "lately" you mean for over a decade.

Re:WTF is going on? (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27911217)

Suck a niggerdick.

Sincerely, AC

Re:WTF is going on? (0)

Anonymous Coward | more than 5 years ago | (#27911443)

Can you tell me what the f**k has been going on lately with all those "anonymous cowards" posting

Yes, I can. I have a five digit id, compared to your seven, and I'm posting AC just to piss you off. Capisce?

Now get off of my lawn.

Re:WTF is going on? (4, Funny)

mea37 (1201159) | more than 5 years ago | (#27911525)

If only there were a way for the community to identify comments that don't contribute to the conversation and mark them as such. Then we could give users a mechanism by which to filter out comments marked in this way...

Obvious? (4, Insightful)

mooingyak (720677) | more than 5 years ago | (#27910785)

free often can't work without a good business model

Last I checked proprietary suffers from the exact same problem.

Re:Obvious? (2, Insightful)

jellomizer (103300) | more than 5 years ago | (#27910971)

Yes but at least if you are planning to sell software you have a business model. Some times when people go to free software for a business they kinda forget a key component on where the money comes from.

Re:Obvious? (1)

Reality Master 201 (578873) | more than 5 years ago | (#27911125)

Yes but at least if you are planning to sell software you have a business model.

Ha ha ha ha ha ha ha ha ha ha ha ha ha. You must be new to the software business.

Re:Obvious? (1)

PitaBred (632671) | more than 5 years ago | (#27911687)

My business model is selling my piss in Mountain Dew bottles. Just having a business model doesn't mean it's a good one.

A good business model leverages a SCARCE good, not an infinite one. For example, oxygen bars. Everyone gets oxygen while breathing, but the special scented, concentrated oxygen costs extra. Apply that to software: the bits are free, but support and further, targeted development costs money. And NOW you have a sustainable business model that leverages the scarce good (your time and expertise). Why do people not get this "infinite" thing? Do your brains shut down with a divide by zero error or something?

Re:Obvious? (2, Funny)

jonaskoelker (922170) | more than 5 years ago | (#27911741)

Some times when people go to free software for a business they kinda forget a key component on where the money comes from.

Easy! They come from Mark Shuttleworth.

What, you have to learn stuff to become an MBA? ;)

Re:Obvious? (1)

DaveV1.0 (203135) | more than 5 years ago | (#27911179)

Please demonstrate a successful business model that relies on giving away the product for free.

Re:Obvious? (2, Insightful)

KeithJM (1024071) | more than 5 years ago | (#27911373)

Please demonstrate a successful business model that relies on giving away the product for free.

It depends on what you think the product is, and what the company thinks the product is. One example would be broadcast television (or radio before that). You can turn it on and watch for free, but what you don't realize is that YOU are the product they are selling (cue Russia jokes).

But still, the model holds -- they spend a LOT of money developing a product which is then given away for free. You could argue that it doesn't RELY on giving the product away for free, because cable manages to charge for it, but Google still uses this business mode for the most part. I could argue that their business model for, say, gmail wouldn't be as effective if they charged you to use the service.

Re:Obvious? (1)

DaveV1.0 (203135) | more than 5 years ago | (#27911599)

One example would be broadcast television (or radio before that). You can turn it on and watch for free, but what you don't realize is that YOU are the product they are selling (cue Russia jokes)

Either way you look at it, the product is not free because the advertiser is paying for it.

They do not give the product away. If that were the case, then shows would not go off the air when groups threaten to boycott the sponsors.

Just because YOU don't pay for it, it is not necessarily free because, as you said, YOU are the product being sold to the advertisers.

You failed miserably by stating what the product was and to whom the product was being sold.

Re:Obvious? (1)

KeithJM (1024071) | more than 5 years ago | (#27911695)

Still, they spend millions producing a product and then give it away. Yes, of course they make money selling something else -- it wouldn't be a business model if there wasn't a source of revenue. But the primary product they produce is given away for free, and it's been a successful business model for decades.

Re:Obvious? (1)

vlm (69642) | more than 5 years ago | (#27911383)

Please demonstrate a successful business model that relies on giving away the product for free.

The seemingly innumerable competitors to the official "telephone directory book" aka the trademarked phrases "yellow pages" and "white pages".

I used to keep them in a drawer thinking I need a phone book, and I'll get around to throwing out last years edition, uh, later. Some years later I realized I had never cracked open any of them... if the business can't be found by google, then for me it doesn't exist. I threw out well over two cubic feet of "old phone books" and now when I receive them they go right in the recycle bin. They might be useless, but they keep sending them to me, so either they make money or they have deep pockets.

Broadcast TV and radio? Of course the product they are giving away is your eyeballs watching someones advertisements...

How about church? Of course, conveniently, your soul won't be saved unless you donate, but technically they do not require it, and they are certainly a big business.

Re:Obvious? (1)

DaveV1.0 (203135) | more than 5 years ago | (#27911541)

The seemingly innumerable competitors to the official "telephone directory book" aka the trademarked phrases "yellow pages" and "white pages".

Those are not free. Those are paid for by the advertisers in the yellow pages.

Broadcast TV and radio? Of course the product they are giving away is your eyeballs watching someones advertisements

Your own words show that the product is not free. It is paid for by advertisers.

How about church? Of course, conveniently, your soul won't be saved unless you donate, but technically they do not require it, and they are certainly a big business.

The "product" of the mass delusions that make up religion is "salvation" so, if you can't be "saved" unless you donate, you are not getting the product (salvation) for free.

You failed miserably.

Re:Obvious? (0)

Anonymous Coward | more than 5 years ago | (#27911899)

nice schtick...generally agree with a person's statements and tell him that he has failed miserably? What is your mental deficiency? Some people make sense. You do not.

Re:Obvious? (1)

honkycat (249849) | more than 5 years ago | (#27911675)

Those old phone books are occasionally useful. It's sometimes hard to find low-tech, small, local businesses (e.g., plumbers) online.

Re:Obvious? (1)

Curunir_wolf (588405) | more than 5 years ago | (#27911563)

Ummm... /. ?

Not exactly taking over the world, but still holding their own [cnn.com] .

Re:Obvious? (1)

PitaBred (632671) | more than 5 years ago | (#27911721)

How about Redhat? They give away all their product for free (if they didn't, CentOS wouldn't exist). Yet, last time I checked their ticker they were successful [yahoo.com] . They sell the scarcity... support, expertise and time. Bits are essentially infinite... time and expertise are not. People will pay for things that aren't infinite, and will pay quite well if you do it right. Hell, that's pretty much IBM's entire services business. They sell you the contractors to make code to do what you want.

Free needs to be combined with demand (2, Insightful)

coolmoose25 (1057210) | more than 5 years ago | (#27910809)

From TFA, the example was an over abundance of free newspapers delivered to people's doors. The problem with such a model is that there is no way to measure the demand for the paper

We have a similar situation where I live. There is a free weekly paper that is available in newspaper boxes. There are two papers that are delivered to your door.

The newspaper box one requires the consumer to actually take one from some "central" location - there is a cost to the "free" paper - the cost of getting a copy is going to one of the newspaper boxes and taking one.

In the other two cases, the papers show up on your doorstep. My brother didn't want one of them, and he fought bitterly with the provider to stop "littering" his door with them. If you go away for a couple of weeks, the piled up papers become a neon sign saying "No One Is Home"... Try as he might, he could not get the door delivered paper to stop showing up.

One person's free is another person's litter.

Re:Free needs to be combined with demand (2, Insightful)

PCM2 (4486) | more than 5 years ago | (#27910983)

One person's free is another person's litter.

Very true. Businesses should never underestimate the capacity of something that is "free" to annoy the customer. I thought a little bit about this when Sun Microsystems started talking about how it could monetize JRE downloads by offering the installer as a marketing channel to advertisers. I've often heard people gripe about how annoying it is when, every time you download another JRE update, you have to un-check the little box that says "download and install the Yahoo toolbar too." Most people who download software updates just want the software updates. They don't want some other add-on junk that they never asked for. So here's Sun going to different companies, telling them, "We have millions of downloads a month, you could reach all of those people!" What Sun isn't telling the potential marketers, though, is that if they use that marketing channel, the same customers they are trying to reach will hate them for it.

Re:Free needs to be combined with demand (1)

Jah-Wren Ryel (80510) | more than 5 years ago | (#27911167)

I thought a little bit about this when Sun Microsystems started talking about how it could monetize JRE downloads by offering the installer as a marketing channel to advertisers.

It may be moot now, but that's not what Sun was talking about. Or at least that's not what Schwartz said in his blog. He was talking about monetizing their free stuff in a lot more useful way to the customer - not force-feeding things down their throats. For example, an online print bureau could pay to have access built into OpenOffice so that they would be a standard option on the Print dialog. Or an online storage provider could pay to be built into the Save and Open dialogs.

Re:Free needs to be combined with demand (1)

Dishevel (1105119) | more than 5 years ago | (#27911699)

You think Yahoo needs to be told they are pissing people off? Yahoo and Sun don't care about those who they are pissing off. Anyone getting pissed off about it wouldn't be caught dead with a toolbar add on anyway. Who they are getting are the next button clickers.

Re:Free needs to be combined with demand (1)

causality (777677) | more than 5 years ago | (#27911047)

In the other two cases, the papers show up on your doorstep. My brother didn't want one of them, and he fought bitterly with the provider to stop "littering" his door with them. If you go away for a couple of weeks, the piled up papers become a neon sign saying "No One Is Home"... Try as he might, he could not get the door delivered paper to stop showing up.

If they were taking the papers all the way up to his doorstep, they were probably coming into his property in order to do so. Just curious, was there any reason why he couldn't call the police and file trespassing charges? I'm not a lawyer or anything like that so I don't know how that would work, but seems like it should be an option. The way I see it, laws like that are there in order to deal with people who refuse to accept "you're not wanted here."

Re:Free needs to be combined with demand (1)

coolmoose25 (1057210) | more than 5 years ago | (#27911631)

He was able to successfully get them to stop for a short time. Right up until the next delivery person in the rotation picked up his neighborhood, and having no knowledge of his desire not to have the paper, started delivering it again. Since the pay for such jobs suck, the turnover in delivery folk was high. So every time they turned over, he'd have to call and get them to notify the delivery person NOT to deliver to his door. Life's too short

I've had the same problem with the Hartford Courant which is a subscription service. We canceled the paper but it kept coming. Eventually it stopped. We started getting notices that we owed the paper money and ignored them. Eventually they threatened to turn our account over to a collection agency. At that, my wife paid them the outstanding balance by their accounts to make them go away.

After paying them, the paper started coming again...

My new plan with them is to repeat this whole exercise again. When they threaten to turn my account over to a collection agency again, I'm going to send my payment with a cancellation notice, AND with an offer to allow them to deliver the paper to my residence for a fee of $50 per month. It will say that delivering the paper to my door will be acceptance of my offer. When the first paper arrives, I plan to bill them. When the collection notice arrives again, I'll send them a formal demand letter for the balance of our agreement. My guess is that a small claims court will make them pay me to deliver the paper.

Re:Free needs to be combined with demand (1)

Grishnakh (216268) | more than 5 years ago | (#27911643)

I don't know about the parent, but I get unwanted free papers on my property too. Here in Arizona, many houses don't have "front" doors visible from the street; only the garage is visible from the street. The free papers are simply thrown onto your driveway by the delivery person as he drives by.

And as stated before, if you go on vacation for a couple weeks, the papers pile up, making it plainly obvious that no one is home.

It's a real nuisance. But I've never found a way to solve the problem; the law seems useless for this (as it is for most problems).

Signs work (1)

Capt.DrumkenBum (1173011) | more than 5 years ago | (#27911085)

I had a friend make me up a sign that says "No newspapers please."
Surprisingly it worked.

Re:Signs work (1)

allauthors (1064594) | more than 5 years ago | (#27911335)

.oO{I posted a sign that said No Solicitation, No Newspapers, No Flyers - Violators will be shot.

They kept coming.

I stayed home from work on the day the papers were delivered one week. Waited just inside the front door with the shotgun. When pimply-faced jerk showed up, I shoved the shotgun in his face and told him the next time he set foot on my property I was going to shoot first.

They stopped coming.}

The above is a description of a deep-seated fantasy and has not been nor ever will be acted upon by the author of this post... Unless you're the one who keeps delivering the stupid things to my door, in which case, I'm totally serious.

Re:Free needs to be combined with demand (2, Funny)

Jah-Wren Ryel (80510) | more than 5 years ago | (#27911223)

My brother didn't want one of them, and he fought bitterly with the provider to stop "littering" his door with them. If you go away for a couple of weeks, the piled up papers become a neon sign saying "No One Is Home"... Try as he might, he could not get the door delivered paper to stop showing up.

For a while, my daily commute took me right past the offices of one such "free" newspaper.
It only took about 30 extra seconds to swing through their parking lot and toss the copy of the paper they had left for me onto the sidewalk in front of their office's front door. It never stopped them from littering on my property but it felt good every time I did it.

Re:Free needs to be combined with demand (1)

maxume (22995) | more than 5 years ago | (#27911493)

I peed in the ocean once. It continues to rain.

(If you never told them who you were, I don't see why you would ever expect that they would know where your house was, or even be able to stop delivering papers to that crank who brings the paper back on Mondays)

Re:Free needs to be combined with demand (1)

Jah-Wren Ryel (80510) | more than 5 years ago | (#27911843)

(If you never told them who you were, I don't see why you would ever expect that they would know where your house was, or even be able to stop delivering papers to that crank who brings the paper back on Mondays)

Gee, what a pronounced lack of humor you have there.

Re:Free needs to be combined with demand (1)

maxume (22995) | more than 5 years ago | (#27911937)

I have a pretty good sense of humor. That one wasn't funny for me. Sorry.

Re:Free needs to be combined with demand (1)

fishbowl (7759) | more than 5 years ago | (#27911739)

You have to throw them back *at* the person making the delivery, and you have to actually hit them. If they try to claim that throwing a newspaper at them is assault, then you've got the position that they threw first.

Re:Free needs to be combined with demand (1)

fishbowl (7759) | more than 5 years ago | (#27911661)

>One person's free is another person's litter.

I had several newspapers being delivered to my lawn against my wishes.

My first response was to throw them back in the street, but then my neighbor complained, and was not able to understand my argument that I wasn't the one responsible for the garbage.

So then I threatened to complain to the city if they didn't stop using my lawn as a dump for their paper waste. I also pointed out that they were making me a target for crime, since I travel for business and don't have the opportunity to clean up the mess every day. In one of my C&D letters, I said that I would bill them for the professional service of cleaning up their trash.

Eventually, the papers stopped, but I'm more inclined to believe it's because they went extinct.

Re:Free needs to be combined with demand (1)

Jah-Wren Ryel (80510) | more than 5 years ago | (#27911893)

My first response was to throw them back in the street, but then my neighbor complained, and was not able to understand my argument that I wasn't the one responsible for the garbage.

Shoulda thrown them on his lawn since he clearly has no problem with it, he surely would enjoy two copies twice as much as one!

WTF? (3, Interesting)

Locke2005 (849178) | more than 5 years ago | (#27910849)

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.

TANSTAAFL (1)

mc1138 (718275) | more than 5 years ago | (#27910853)

There ain't no such thing as a free lunch.

It might be a bit simple, but sometimes simple works. There is always a cost for something, "free" give aways are cost justified somehow, be it a one time get you hooked sort of idea, or a recoup losses elsewhere shifting of the burden, but the simple fact is, someone, somewhere is paying for that. Doesn't even have to be money, could be as simple as time or energy, but rest assured, there is always some sort of cost associated with everything.

Re:TANSTAAFL (1)

BobGod8 (1123841) | more than 5 years ago | (#27911199)

Sure there is. You're free to have lunch.

Oh, you meant the OTHER free...

Re:TANSTAAFL (1)

FooAtWFU (699187) | more than 5 years ago | (#27911285)

On the other hand, in an efficient free market, the price of a good will approach the marginal cost - in the case of software, that's zero-per-copy or pretty darned close to it. Since most software is not free, you can infer that the software market is not efficient, and software is probably being under-produced. This is consistent with the notion that the production of free software has significant positive externalities.

Free! (0)

Anonymous Coward | more than 5 years ago | (#27910897)

This is funny. I create and release everything Ive ever composed for free and have no problems with the success of it or lack of success for that matter. When its free, the creation becomes the greatest reward. Sure I can't control whether you take my music and say you made it but that also happens when you pay for it or before you do anything for that matter.

Knowledge is all regurgitated information from what already exists anyway so....its really about enlightenment.

All these arguments do is make you think that you have to pay for something for it to have value. God forbid someone makes something and gives it to another these days without a whole group of people raining down the "Yeah but I have to feed my family" railroad. Do you think whomever made the wheel thought about how to consistently make money off of it as the years go by? Are tires infringing on the maker of the wheel because someone took that concept and made something else out of it?

Software is what it is. Sell it or don't. People will buy it or they wont. Stop trying to control how they use it. If you aren't for free then you probably don't like Taco Tuesdays or BOGO offers. I mean how is Pedro going to feed his family? We all need to pay and pay NOW! I'm converted. Thanks!

Only businesses need a $-driven business model (1)

davidwr (791652) | more than 5 years ago | (#27910919)

Projects using donated labor and equipment don't need a financial business model, other than perhaps one that seeks donations.

A hobbyist who creates music, code, books, or other software in his spare time and uploads them to YouTube, SourceForge, or some other free-to-him repository is only out his time.

The same can be said of a group of creators who have day jobs but give away their intangible work product for free.

As soon as you start getting beyond the available time the people have to donate, then you need some type of business model. This can be anything from seeking grants and donations to sponsorship to a traditional fee-for-product/service business model.

Re:Only businesses need a $-driven business model (1)

DaveV1.0 (203135) | more than 5 years ago | (#27911143)

Tell you what, why don't I hire you and have you work for free and then I will pay you what I think the end product is worth, m'kay?

Or, maybe you can do work for me and seek a grant and donations to do it. That would work well for me too.

You may already be doing that (1)

davidwr (791652) | more than 5 years ago | (#27911521)

I am already accepting donations for my collected wisdom posted to Slashdot.

The sum total of donations prove that my contributions are indeed priceless.

"Work for free" works great for people who have passion for something they do in their spare time or if they are wealthy enough to not require a source of income. It doesn't work so well when the person isn't passionate or when the work IS the day job.

NO. NOT NOW. NOT EVER. I'M COMING FOR ALL OF YOU! (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27911059)

Stupid communists!

Free is for giant companies with reserves to spend on loss leader marketing to acquire customers for new profitable products, usually in a highly competitive space --and Free is for people who have no choice but to trade their time for money! It doesn't matter if we're talking high tech, low tech or no tech.

That the Great Communist, RMS and his hapless minions are particularly active in technology is, well, your problem, if you are gullible to buy into his politics, politics which could only be afforded by a life-long academic (read: no commercial experience), I might add.

I'm not a loon: While all must trade time for money at one point or another, just remember that there are two billion people around the world who have no choice and are just waiting for you to drop your next freeware that will help them duplicate the efforts or benefits of the labor of thousands of people at Microsoft, Apple, Google and any other Western company that makes money with technology. Imagine being in a really bad area of New Orleans, New York, South Chicago or East LA --surrounded by people who want your stuff for food. How many times can you keep walking through and giving up your stuff before you join them?

Like slashdot (1)

oldhack (1037484) | more than 5 years ago | (#27911165)

I have here on slashdot with a box to check off, to disable ad, for my "contributions". Yeah, like, I haven't seen an ad here since when, I don't remember.

But how is that related to the story? I am not sure - mention of "business model" seem to turn off my brain.

News? (1)

internerdj (1319281) | more than 5 years ago | (#27911375)

If you give stuff away you need a good plan to make a profit from it.

Stop, read this (0, Redundant)

brock bitumen (703998) | more than 5 years ago | (#27911461)

Gratis vs. Libre [wikipedia.org]

Before you continue with your article utilizing an ambiguous term to which too much meaning has been attached, please familiarize yourself with this distinction that is a prerequisite to becoming a member of slashdot.

No, no, no... Did I mention "No"? (4, Interesting)

pla (258480) | more than 5 years ago | (#27911469)

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.

Re:No, no, no... Did I mention "No"? (3, Insightful)

Todd Knarr (15451) | more than 5 years ago | (#27911625)

No, he does grasp one essential point: the bills have to be paid. Whatever you're producing, there's costs that you've got to have the money to cover. Utility bills, payroll, taxes, cost of materials, it all takes money and you need to come up with that money from somewhere. Either you're funding the whole thing out of your savings, or you need to find a way to earn revenue from the project. And if you intend to give away your product for free, then you'd better know what other source you're going to get revenue from or you'll be finding your bank account emptied at an alarming rate and when it hits zero the bank won't let you write any more checks no matter how many you've still got in your checkbook.

Yes, we as consumers of the free product don't care about any of that. But the guy producing the product had better care, because the bills still need to be paid.

There's no such thing as free (2, Insightful)

petes_PoV (912422) | more than 5 years ago | (#27911509)

Everything you do or obtain has a cost attached. That might be financial or it might be the investment you make in time, emotional attachment or not doing other things.

For example, take the act of downloading and installing a piece of "free" software from the 'net. You spend time to download it. Time to work out how to install it and even time (hopefully beforehand) to read through it's features, bugs and abilities to find out if it will solve the problem you have.

If you get as far as trying it out, then discover there is a reason why you cannot use it, you have lost the time you spent getting that far. If you have had to buy something else (such as a memory upgrade, new disk or printer, etc.) to use with this free software - that tangible cost has been lost: to some extent.

Now, if playing with software is merely a hobby, then you're probably willing to spend time messing about - with no expectation of getting a usable result at the end. Afterall, with hobbies half the fun is getting there, rather than exploiting whatever it is you have made. When it comes down to it, a large amount of free software is simply "hobby" quality and should be approached with no expectation of support, bug-fixes or updates. In the long term, this is probably the most expensive form of free software.

However, if you're running a business, or intend to use this free software for work, there is a very real loss involved in having to junk an installation and go find an alternative. Spend a day getting an email server running for your business, without success and a $500 commercial product could well work out cheaper than the "free" version you downloaded, just in the cost of your lost time. Similarly, for a home user, it may well be worth spending $100 on a package you can just drop in, with the certainty it will work than to waste your sunday off trying to find accurate and up-to-date documentation for a piece of OSS.

In my experience, the biggest thing that "free" software has going for it in business, is tha ability to avoid the onerous paperwork/approvals required to spend money to buy a product. Free stuff doesn't need any of this and can be downloaded, installed and tested without having to involve any authority. Others however, would argue that this is also it's biggest weakness.

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