I'd have to disagree a little here: I think the "free" aspect of the web is a tendency towards marginal cost. If the marginal cost of a user is a fraction of a cent, it does not make sense to charge every user -- they inherently know that the service should be free, and even if they don't, a competitor can gain an easy advantage by replicating what you do and offering it for free.
Amid all of this "free" bashing, it's also very important to note that not all "free" services are supported by ads. The "freemium" model (free services supported by paying users) works quite well for many services, including those that have a high enough marginal cost that making money off of advertising isn't enough -- these should be the same services people are willing to pay for, since they cost a lot more to support.
If they aren't (ie, the YouTube example), then you're probably just fucked. But it may very well still be early to call the game on YouTube, for example: the internet has a notoriously short time span, even though it might take a long time to "mature" a business. I'm not familiar with YouTube's specific financials, but given the size of the site and audience, I would be very careful to rush to conclusions on the current and future profitability of the site.
As in, should most web content be free if more and more people are declining to have display advertising render properly in their browser? It can't be at scale and consistently without a revenue engine of some kind.
>If someone successfully exploited the web and created a business relying on ads, that's fine, but he don't have an implicit right for that. Internet users are not obliged to display data he provides through http the way the creator expects.
No, they're not. As this trend continues, the assumption that underwrites a lot of free content will stop being nearly as true. When the assumption stops being accurate, that business model fails, and more free 'content' winds up being ads gussied up as content. This is not exactly what the visionaries of the web had in mind, but them's the breaks.
In print, there are free publications handed out on street corners and in boxes. They tend to have low ad rates because the distribution is unverifiable. On cable, ad rates are still super-high, because the distribution is verifiable, and the cable networks have all the data they need about you on your cable bill + viewership surveys to aggregate for sale to advertisers.
I disagree. The reasons are more straightforward. If there's a choice between a paid website, and a free website, the free one will win out. And advertising means you can offer users something for 'free'.
So lets say google switched to charging users for access to their search engine, a competitor would just popup that was 'free', and everyone would use that instead.
Plenty of services were free prior to commercialization of the web because they generated nom-monetary value (community, knowledge, etc.). Plenty of creators and artists also make money directly via donations (Patreon, etc.). I'm not sure we need the existing ad model for either free content or to make money on the internet.
Maybe it works to have a free tier and yank the rug out from everyone, and maybe the solution is that we should just pay for what things cost?
The whole internet is like this, people often don't want to pay, they want it free, then the advertisers pay, we get pissy about advertising, and we become the product, and we flock to the next free thing after the free thing stops being free ...
I wish things weren't all free, I wish we paid easily, and the relationship really be between us and the provider, directly with enough money to actually make them profitable. But it isn't that way for a lot of things, and I feel like we as users are part of the problem too.
It's easy (and trendy) to point the blame at web developers and businesses who bloat their webapp with advertisements and trackers, but for many of those businesses, that's the only way they would make money.
There are many things consumers are willing to pay for with their time and patience, but not their cash. As it turns out many of those things are web "services". If they were truly valuable on the same level as say, food, people would gladly pay cash for the service.
YouTube is a great example for me personally. If you told me I had to pay a monthly subscription of $10, I'd stop watching YouTube instantly. But since it's "free" I'll sit through a few ads. I don't mind paying with my time.
Right, but I think the point is that those free users are not a good analog for paying users. The things you learn from those free users will not help you figure out how to serve customers who will actually pay something for your service.
Most stuff on the internet are free anyway, which should be ample evidence for my argument.
What stuff? Stuff that's paid for with advertisement dollars? Do you think this stuff would still be free or marginal cost without those advertisement dollars? I think the fact that so much software and media (probably well over 90%) is paid for in some fashion by consumers (either through advertisers or directly) is evidence to the contrary of what you are saying.
Free does make business sense in the web world when advertising was the primary revenue driver. You cannot sell meaningful advertising without meaningful inventory, so there is a period where you spend "free" with meaningful inventory.
The larger question is whether other business models require the same focus on building a free userbase before implementing the business model. For all those services that charge, it affects user behavior if you implement too early and may limit the market size of the product. But on the flip side, sometimes if you charge, it conveys a sense of value upon the product.
If twitter started charging from the get-go, it would not be as big or as useful of a service as it is now.
One way to look at it, if the idea of "free" is too troublesome, is to consider that at the outset people are paying with their time and attention.
You need to do something to attract users, and allowing non-paid usage may be cheaper than the cost of additional advertising that gets people to sign up and pay.
I think this whole debate is curtailed by a misleading metaphor.
Yes, certain parts of the web are free...these are the ubiquitous and dominant pieces, like Google, Twitter, Facebook, and news sites, etc.
Then you have SaaS, which is smaller on an individual scale, but makes up a large portion of the overall web economy.
Most games aren't free.
Some of my favorite pieces of software cost me money every month.
Are we talking freemium here? I can't really tell because the argument, to me, seems generalized.
Just yesterday on HN, there was a post about a fun project called threewords.me - it blew up because it was free and built to go viral on Facebook. That type of thing will probably always be free, either as an ad-supported simple product, or a feature of a more expensive paid product.
I have a hard time believing that mobile will be free when much of the web is still not.
The reason magazine apps aren't doing well is because they're complicated, and I can pull up wired.com and read almost everything I need to, from the same device, so an app is useless in that context.
Other pieces of software, which might not exist outside of mobile, have much more value to me, and I'm willing to pay for that value.
Free is NOT the problem. Free is the “business model” of the internet. Just because some people want to monetize it doesn’t mean we need to give up and just let them do what they want. Selling ads is not the purpose of the internet. Content created to sell ads is most of the time garbage. No chicken, no egg no puzzle to resolve.
He cites a single example for his entire article as proof that users don't mind paying for things. Not exactly scientific, is it?
Really, we need to get back to purist capitalist principles for the web: if something provides "value", it should cost money. The culture of free has gone on way too long though, and I suspect users are just too spoiled.
You're absolutely right. Right now, there is none, which sucks. As Aral Balkan says well and as I'm sure you know, free is a lie [1]. People should pay for services that they use, and services which get used should be paid. We'll get there. But to answer questions about pricing, it's free until we are comfortable enough to charge.
Very few "free" services are really free. The ones I use are Twitter and Hacker News (I've tried Posterous, but it wasn't for me). But even in such cases when there is no advertising at first, I don't typically assume the service is really free. For example in the case of Twitter, I assume that me using it adds to the value of the company, and enables them to sell their company for a high price eventually, or to charge a lot of money for advertising. I expect that something like advertising might eventually arise on Twitter, at which point I might quit. But until then, at least it was advertising for Twitter that I used it. Also, why should I worry abut how a company makes money - if they choose to offer something for free, it is their problem.
HN might be more of a hobby project, for the enjoyment of pg. Or it really helps YC to select candidates. If HN started showing ads, I wouldn't blame them. But maybe I would take my comments elsewhere. In fact I wonder at times how much my comments would have been worth in terms of SEO, had I put them in blog comments with a link to my web site, instead of commenting on HN. I probably made thousands of comments on HN by now. I kind of pay by contributing.
Just saying - just because no money transactions are involved, doesn't imply both sides have an advantage. Most "free" services simply want to build a user base and eventually get them to pay or monetize them in some other way. Therefore I don't feel like a freeloader just because I use a free web site.
I am not sure if there can be truly one sided contracts. At least in my country, contracts can "outrageous", for example, you can't have a contract forcing somebody to work their whole live for you in exchange for 1$. But in most cases, a mutual benefit is probably there.
It's a self-imposed problem. Of course people will object now that they're used to getting a site's content for "free". The sooner those sites die, the better, IMO. If there are costs associated with creating the content, then it's a stupid idea to act like there aren't.
Sites and services that charge from the beginning, and/or offer a very clear value added payment option from the beginning are usually successful. Success being defined as self-sufficient without violating user privacy and whoring themselves to advertisers.
I think that free services are a mistake. But for whatever reason people _really_ like it. Take Youtube. It offers a way to avoid all ads and yet people who spent hours upon hours every day either watching videos or listening to music with it refuses to spend a dime on it. And yet, they also complain that ads are ruining Youtube and so they installed adblocker specifically for it.
Since everyone refuses to _directly_ spend money, companies just move to taking money from us indirectly. To me "free services" is like a casinos, its easy to say that you should "just not do/use it lmao" but its extremely hard to think back and consider why Reddit/Hackernews/Youtube/Twitter/Facebook is free and what are the consequences/incentives of it being "free" will mean to our society. It is simply too enticing.
Maybe it is more about just monetizing anything on the web?
I kinda suspect the notion of most of these services just being free and not resorting to really unpleasant ad systems and dark patterns and such ... just not viable generally.
I would argue that the current model is more friendly to attention grabbing content (clickbait, etc) because advertising has the limitation that all views are worth the same value. In a pay-as-you-go Internet, users can whitelist high quality content sources as being okay to charge 10x or 100x what you'd typical accept to view a webpage. This would incentive content creators to build a brand and reputation that makes users comfortable putting them on the 'high quality' list, so that their content can see a massive revenue multiple relative to the number of eyeballs.
There's a place for free, but I agree that those who start businesses and then have to come up with a plan to generate money are doing things completely backwards. It's one of the reasons I am annoyed at Twitter; they should be shunned for starting this thing with millions of dollars of other peoples' money and ultimately having no idea how they're ever going to make any of it back, but instead they get played up like crazy.
You've made this point in your comments, but offering a significant amount of content or software for free can be considered advertising for your paid product, and is practically essential for survival on the web anyway. Paywalls are last century; people want to be handed things now, and if you hand them things and give some slight nudges toward a premium account for extra features or whatever, that works fine, they just don't want to expect to be told anymore "$30 before you get to play". And honestly that's never been a good strategy, and it's even worse online, because it stops word-of-mouth, it stops search engines or other interested parties from indexing or trying your product, and just generally greatly reduces visibility.
Freemium is the way to go. There is no shame in charging for a good product, but keeping things under lock and key is not ideal either. You want to provide maximal "viral" potential, which is accomplished by making the bulk of the product freely available and accessible, and you also want to make sure you get paid in a good number of cases, which is accomplished by operating your free product correctly.
Amid all of this "free" bashing, it's also very important to note that not all "free" services are supported by ads. The "freemium" model (free services supported by paying users) works quite well for many services, including those that have a high enough marginal cost that making money off of advertising isn't enough -- these should be the same services people are willing to pay for, since they cost a lot more to support.
If they aren't (ie, the YouTube example), then you're probably just fucked. But it may very well still be early to call the game on YouTube, for example: the internet has a notoriously short time span, even though it might take a long time to "mature" a business. I'm not familiar with YouTube's specific financials, but given the size of the site and audience, I would be very careful to rush to conclusions on the current and future profitability of the site.
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