November 2009
1 post
Economics paper on Free online markets
“Priced and Unpriced Online Markets” by Harvard Business School professor Benjamin Edelman. Discusses tradeoffs in market such as email, IP addresses, search and dial-up Internet. “Reminiscent of the old adage about losing money on every unit but making it up in volume, online markets challenge norms about who should pay, when, and why.” I found this typically academic:...
August 2009
5 posts
Find free stuff on Twitter
From Mashable: “Freezly is a lot like Tweetmeme in that it finds link and tweets and shows you their popularity based on retweets. Freezly though only picks up free giveaways and items with its algorithm. You can see the hottest free deals being shared on Twitter, the most recent deals Freezly has found, and an archive of past giveaways.”
Free drives paid in iPhone apps
From Cellular News. “Android and iPhone users download approximately 10 new apps per month, reports a survey by mobile advertisign agency, AdMob…..Of users who have bought paid applications, the top reason cited for their purchase decision was that they liked the free version of the app, demonstrating that free-to-paid conversions are a key factor in the paid app market.” (via...
Is Free killing the porn industry?
From the LA Times: “Industry insiders estimate that since 2007, revenue for most adult production and distribution companies has declined 30% to 50% and the number of new films made has fallen sharply. “It’s the free stuff that’s killing us, and that’s not going away,” said Dion Jurasso, owner of porn production company Combat Zone, which has seen its business...
"The latest craze: free ebooks"
From the AP: “In recent days, the top three Kindle sellers have been free books: Patterson’s, Joseph Finder’s “Paranoia” and Keyes’ “The Briar King.”“There’s always going to be someone who wants free things. What we’re trying to do is link free with paid,” Maja Thomas, senior vice president of digital media at...
Criminalizing Free (French edition)
A few weeks ago, I speculated in a CNN editorial that antitrust authorities could make it illegal for dominant companies (read: Google) on the web to use Free, because it’s effectively offering a product below cost and subsidized by monopoly rent from another product. If that felt a bit far-fetched, consider this: Google is being sued in France for making Google Maps free. A French company...
July 2009
9 posts
Ex-NYT exec: Newpapers' "mass delusion" about paid...
Nytimes.com general manager Vivian Schiller, now at NPR, tells Newsweek that “news is a commodity”: “I am a staunch believer that people will not in large numbers pay for news content online. It’s almost like there’s mass delusion going on in the industry-They’re saying we really really need it, that we didn’t put up a pay wall 15 years ago, so...
Felix Salmon on why opinion should be free
Reuters columnist Felix Salmon on why his company shouldn’t buy Breakingviews, with its paywall-only model: “The genius of Reuters setting up a commentary team is that we can offer our content at a marginal cost of zero. Once the commentary is available on the wire, for the benefit of subscribers to the terminals, those subscribers want it made available as widely as possible for free...
5 business models for social media startups
A good roundup of revenue models from Mashable, with examples and interviews with entrepreneurs in each. The five are: Freemium, Affiliate, Subscription, Advertising and Virtual Goods.
Free news aggregators
Want more Free news than I’m collecting here? You’re in luck—two services have started providing it.
Eqentia, a new semantic news aggregator, has a very good page on “Freeconomics”. You have to sign the first time to read the stories, but after that it’s quick and, yes, free.
Meanwhile, Seth Godin has set up a Squidoo page on “The Free Debate”,...
Interesting responses to my CNN op-ed on Google,...
Last week I wrote a piece for CNN wondering if the Obama adminstration’s tough new line on antitrust could end up limiting Google’s use of Free to gain share in new markets (because it’s subsidizing that entry with monopoly profits from search ads). Dana Wagner, Google’s chief antitrust council, replied on the Google policy blog. Sample: “It is true that if a company...
NYT reviews FREE again, this time with feeling
Virginia Postrel, who is smart and both techno- and econo-literate, has a long review of FREE in the the Sunday NY Times Book Review section. She describes it as “stimulating but not uncomfortably challenging,” concluding: ““No man but a blockhead ever wrote except for money,” Samuel Johnson said, and that attitude has had a good two- century run. But the Web is full of...
Good WSJ review of FREE
Long and thoughtful review in the WSJ by Jeremy Philips, vice president of News Corp: Sample: “To be sure, businesses with pricing power don’t always exercise it. Millions of people would be willing to pay for their favorite social networks, but the potent network effect that derives from scale has made free an irresistible strategy. In the future, the “freemium” model that...
You know what's really "reckless and lazy"?
A Janet Maslin NYT review of FREE and CHEAP (by Ellen Ruppel Shell) makes much of the fact that we describe Dan Ariely experiments differently, proving us to be untrustworthy. Or, perhaps, they were different experiments. A simple Google search would have revealed that it’s the latter.
Moby's best selling track is his free one
Moby writes to Bob Lefsetz: “Here’s something funny: the best selling itunes track is ‘shot in the back of the head’. Why is that funny? Because its the track we’ve been giving away for free for the last 2 months and that we’re still givng away for free.” (thanks to Mitch Joel for the link)
June 2009
16 posts
Malcolm Gladwell review of Free in The New Yorker
A long review of Free by Malcolm Gladwell. Like many journalists, he finds Free unsettling: “Anderson is very good at paragraphs like this—with its reassuring arc from “bloodbath” to “salvation.” His advice is pithy, his tone uncompromising, and his subject matter perfectly timed for a moment when old-line content providers are desperate for answers. That said, it is not entirely clear what...
Boston Globe's excellent Ideas section reviews...
Drake Bennett writes a long, thoughtful and, well, mixed review of Free. Sample: “Duncan Watts, a network theorist and a principal research scientist at Yahoo! Research [says] “He’s taking perfectly reasonable and in themselves interesting and valid observations and expanding them into a grand theory, but it turns out that the grand theory can’t sustain itself,” Watts says. “To the extent...
Turning digital pennies into dimes
NBC’s Jeff Zucker once complained about having to trade “analog dollars for digital pennies”. Now at least it’s dimes. Bloomberg reports that top shows such as the Simpson now get higher ad rates on Hulu than broadcast. From the article: ““This is about scarcity,” Poltrack said. “All of the networks who are now streaming online have multiple advertisers competing for...
"Is Free News Really Worth the Price?"
An NYT appeal from the “last Reuters correspondent known to have to sent dispatches by carrier pigeon many years ago from Matabeleland”: Please pay for your newspaper. It’s better than Twitter.
How Free vs. Paid is playing out in personal...
PaidContent has a good piece analyzing the various free and freemium models on the personal finance sites: “In the battle for the online personal finance market, free has become the status quo. Both startup Mint.com and rival Quicken Online have amassed more than one million members each by charging zilch for their services. Now, though, both companies are seriously exploring charging for...
Socialtext now free for up to 50 users
From the press release: “Socialtext, the leading provider of Enterprise 2.0 solutions, today announced the availability of Socialtext Free 50, a new free offering aimed at mainstream use for up to 50 people within an organization to collaborate using Socialtext’s social software platform. Employees can join or create their own private collaboration networks by using their work email...
Good Freemium examples
A roundup of Freemium best practice on the web: “Here are a couple of services that have found the right formula for success when it comes to charging their members. There might be some valuable lessons learned by examining these successful services to see how they managed to get their users to take out their wallets rather than their pitchforks and torches.”
What to do with "infinite bandwidth"
A Boston Consulting Group analyst describes how to apply abundance thinking to bandwidth: “Today, for example, radiologists don’t need to be located where the image is created. Images taken at a clinic where the patient is located are transmitted from the imaging machine to a distant image-analysis centre - an entirely new business made possible by increasing bandwidth at ever-falling...
An argument on why microbilling is better than...
I disagree with this (I think the marketplace has already spoken: people hate microbilling, defined as a few cents or less), but the analysis here is worth reading: Sample: “But here’s one thing freemium fans can’t deny: in their model, a tiny minority of paid users subsidizes the service for everybody. It is this simple fact that makes the freemium model self-defeating, because, for the...
Amazon's growing free Kindle book biz
From a note from Morris Rosenthal, who had done good research on Amazon Kindle sales; “One of the things that you might find interesting is the large number of free Kindle books that are flying off the shelves, classic out-of-copyright books that Amazon has provided, plus the number of 1 cent novels, uploaded by small publishers and self publisher in hopes of generating buzz for the print...
More data on sales effect of free books
From BoingBoing: “Brian F. O’Leary has posted slides updating his quantitative research on the effect of “piracy” and/or free giveaways on book-sales, done independently using data from O’Reilly and Random House (the largest tech publisher and general publisher in the world, respectively). The new slides, from the recent Book Expo America, expand the work with a...
The $0 iPhone
From TheStreet.com: “…Within hours of Apple’s announcement Monday that it was cutting the price of the old iPhone by half to $99, speculation arose that AT&T would eventually cut the price to $0.”
How $0 laptops could save media
Smart piece from Simon Dumenco in AdAge: “In other words, hardware makers may have no choice but to turn their internet devices into multi-tier-subscription-based media machines, because there will never again be enough margin in the basic price of the hardware. And the more we get used to the idea of essentially subscribing to media as a way to pay for hardware … well, the more hope...
NYT on the Danish Free Newspaper bubble burst
From the NYT: “Since the economic crisis deepened last autumn, however, the free newspaper business has gone into free fall. Circulation in Europe, which accounts for more than two-thirds of the global total, has fallen by more than 10 percent, Mr. Bakker said, and dozens of titles have closed.”
Steve Brill's case for paid online newspapers
Note that almost all the “paid” online newspaper models are actually “freemium”, a mix of free (for reach) and premium (for revenues), which is mostly what my book is about. The latest is Steve Brill’s case to the newspapers, found here.
BookExpo report on Free book experiments
From Publishers Marketplace: “First up with some hard numbers on the pros and cons of free was Peter Balis, Director of Digital Content Sales at Wiley. For the first time, the company found its e-book sales have migrated from academic research to consumer reading. He offered up Frommers.com as an example of making the entire contents of particular travel books available for free, but instead...
May 2009
16 posts
We need better Free critics
Mike Masnick rounds up the current crop of half-hearted attacks on Free. Sadly most haven’t bothered to read the articles or book and just imagine what a very bad book on Free might say and then oppose it. Invariably, all land the zinger “After all, every student of economics knows that there’s no such thing as a free lunch.” Hopefully the release of the book in July will...
"Is Free the New Black?"
A CNBC show on Free. Totally incoherent, with people talking past each other, promoting their own companies and themselves and a witless host trying to land zingers and be “provocative”. As I said, a CNBC show.
FTC: you must disclose when you blog about free...
From Gawker: “The FTC is issuing new “guidelines” that tell bloggers that they have to disclose when they’re writing about free crap that companies send them. This is a good rule but mostly unenforceable. Anyone can be a blogger and they’re the softest targets for flacks looking for good reviews. But then again the FTC sent me that t-shirt, so don’t believe a...
New science books to be available Free online
From Slashdot: “Bloomsbury Publishing, best known for the Harry Potter books, has announced a new series of science books that will be available for free online. Bloomsbury thinks they can make enough money off of hard-copy sales to turn a ‘small profit.’ The online version will be covered by a Creative Commons license which allows free non-commercial use. They’ve already...
My comment on P2P Long Tail report
From Epicenter report on P2P research that found a lognormal, not powerlaw distribution of music demand: ““I suspect that says as much about P2P technology as it does about music,” Anderson said. “If just a few people are sharing a file, it makes it harder to find and get.“This research, which looks quite good, suggests that the nature of P2P music is that it follows the lognormal model,” he...
Free ebooks increased physical sales 11%
From Simon Owens: “John Hilton, a doctoral candidate in Instructional Psychology and Technology at Brigham Young University, crunched the numbers to determine whether releasing books through Creative Commons and other methods really does benefit authors and publishers. He found that four titles recently released for free by Random House saw an 11 percent increase in sales in the eight weeks...
Seth Godin on "Too much free"
Seth was one of the first people to really understand the power of free online and remains one of the smartest: “Free online has two distinct elements, then. Breakthrough free, like the first free ebook or the first free email service, and sample-this free, which decreases the cost of trial and lowers boundaries of the spread of an idea. But they shouldn’t be confused. As the market for free...
NYT exec on the problem with charging online
Another good one from PaidContent. Scott Heekin-Canedy, president and GM of the Times Media Group: “The Times has charged for online content twice in the 13-year history of NYTimes.com. There is no doubt that we could convert NYTimes.com to a paid content site, and there is likewise no doubt that it would be greatly diminished as an advertising venue.”
Murdoch creating global team to pursue freemium
The media tycoon wants to explore the premium (paid) side of the freemimum equation across all his content properties. From Paid Content: ‘A month after saying online readers’ dependence on free content is “going to have to change somehow”, News Corp.’s Rupert Murdoch has now “set up a global team, based in New York, London, and Sydney, to create a system for...
Free iPhone apps doing well with ad model
From TechCrunch (good piece; read it all): AdWhirl, an iPhone advertising platform, has released data that suggests the ad model on the iPhone is better than analysts had thought. From the TechCrunch article: “According to co-founder Sam Yam, one of the fundamental flaws in the Pinch Media report is that it assumes that applications only show a single ad impression per user interaction (in...
Dreams of Free electricty for all sank Tesla's...
From the NYT: “In 1901, Nikola Tesla began work on a global system of giant towers meant to relay through the air not only news, stock reports and even pictures but also, unbeknown to investors such as J. Pierpont Morgan, free electricity for one and all….The towers would transmit not only information around the globe, he wrote the financier in July 1903, but also electric power. “I should not...
Coldplay joins the crowd giving away free music at...
From the BBC: “Coldplay are to give away a free CD at every remaining live show in 2009, the band have announced. Starting with the group’s first North American tour date in Florida on 15 May, fans will be given a copy of nine-track album LeftRightLeftRightLeft. The band said the giveaway was meant as a “recession-busting mark of gratitude” to their fans for supporting...
Free Frisbee vs free checking (the $1,500...
A cool MSN Money article on the psychology of different kinds of Free, in this case to offers from competing banks. “The two banks had very different methods of attracting students. One displayed a sign that said “free checking.” The other was handing out Frisbees. My choice was easy. I wanted the Frisbee. (Free checking? How boring.)” Years, later, when she added up the...
Zynga building a $100m business on Freemium games
From Business Week: “The site has annual sales of about $100 million, according to several people close to the company. The site gets some revenue from selling ads, but mostly from the 2% to 10% of users who pay $1 an hour to play premium games or buy virtual goods…..Playdom is the other giant of the space, reportedly generating almost $50 million in revenue. “
Businesses earn goodwill by giving services away...
I’m sitting at a videoshoot with Watts Wacker, who is the feature subject of this USA Today story on giving away services for free in a downturn to earn goodwill that will pay back in better times.
Play Left 4 Dead free for 24 hours
Steam, the fast-growing online delivery system for high-end videogames, is offering the hit zombie game Left 4 Dead free for 24 hours. It’s the whole game, and you can get as far as your skills will take you in a day. After that, you’ve got to pay to continue.
April 2009
10 posts
Music bootleggers also most likely to buy
From Kottke: A study from the BI Norwegian School of Management has found online music bootleggers are much more likely to pay for music online than those who don’t steal music.”The Norwegian study looked at almost 2,000 online music users, all over the age of 15. Researchers found that those who downloaded “free” music — whether from lawful or seedy sources —...
"The Wire" writer: TV used to be Free but look at...
From a short video interview with “The Wire” writer David Simon: “You know, newspapers are gonna say, “We already let the horse out of the barn door. How can you charge for content? Information wants to be free.” All that bullshit. As I remember, there wasn’t an American in America 30 thirty years ago who paid for their television. Television was free 30 years...
Ning's Freemium percentage: 6%
Good Silicon Alley Insider story on Ning, the booming social networking platform that I use for DIY Drones. They now have 1 million networks, of which 200,000 are active daily. 12,000 of them (including me) pay for premium services, for a conversion percentage of 6%. They say the average user pays about $55. I pay just $25 (for my own domain name and to have ads removed)
