June 14, 2010 Michael Bickerton
Interestingly, the big players on the internet these days seem to have a business model of free, yup, free, zero, zip, zilch …
There are some serious business considerations, however, it seems that both Facebook and Google have a strategy that advertising will at some point provide the revenue. The question and the answer remain, will this work long term? It seems that most people have gravitated to the business model of free, much to the detriment of the news business (formerly the newspaper business) and the music business (if there still is one). Even a few bands have provided free music in hopes that you (the consumer) will come to their concert, or purchase additional music tracks.
There are advocates on both sides of this “free” model. Many of those are saying that advertising, in the end, will not be enough, as such, the question needs to be asked, what will work?
According to Mitch Joel, in Six Pixels of Separation, there are a couple of things that will work in driving traffic. Joel says content will keep customers engaged, conversations will allow them to share and collaborate, and that business growth will come from reciprocity. His view of the world is that consumers will be willing to pay and pay a premium for “added value”. The theory is that you need to embrace this as your future business strategy.
By the way, I do agree with Joel, in that people will be willing to pay for “added valued” content, insight and editorial, much like we did with the old newspaper business. The concern here is that there is so much content, so many perspectives, so many editors, do we really believe for a moment that the free business model will not survive? I for one believe that “free” is going to continue to be a business model and business must be ready to adjust to the “free” business model as well.
Michael Bickerton, Raven5 Ltd, June 2010