Forum Moderators: phranque

Message Too Old, No Replies

The FREE and BEST business model

Who can afford it?

         

Selen

6:29 pm on Jun 19, 2015 (gmt 0)

10+ Year Member Top Contributors Of The Month



Almost all changes that millions of webmasters and Internet corporations work on every day have one thing in common: 'to make user experience better.' If we consider the fact that the ultimate user experience is:

FREE and BEST

then aren't we shooting ourselves in the foot? Because the end game of 'making user experience better' is: FREE and BEST.

It's now clear it's not a sustainable business model - even for the biggest corporations like Google which tries hard to find ways to unblocking ad blockers. At the same time it's probably too late to reverse this trend because Internet users got used to this 'free and best model' and they will be very aggressive in protecting their 'rights to free' (see adblockers). To keep this going, there are still plenty of new companies that attract new users by offering them 'free and best.'

So who can afford to work for free and provide the best?

Lapizuli

9:31 pm on Jul 13, 2015 (gmt 0)

10+ Year Member Top Contributors Of The Month



I do think Selen is onto something important.

I believe people don't want or expect literally "free," but that "free" is possibly the best word to use for what they want, which isn't being articulated. But then again, I also believe we are in the process of transitioning to a new kind of currency. I don't know what it is, but I do know that we're in a global downturn at the same time that we're in a global upturn, which makes it a transition state, and what's typical about transition states isn't that the moral fiber of humanity loosens, though it always looks like that, but that what people are willing to pay isn't corresponding to what's being asked.

Kind of like when, say, an animal population that's survived on coconuts and grass gets really successful, but then no longer has as many coconuts and grass, so has to move to where there's acorns and thistles. So these early adopters, or bellwethers, or whatever you want to call them try to show the others, "Woohoo, we've got thistles! Take some, I'll share!" but they get laughed at with, "You're not offering me anything worth a durn. Show me the grass." That's what it's looking like to me right now.

As for "best," I translate that into something a bit askew. For "best," I read "the least resource intensive thing that works." As in, the most functional item for the most people, produced with least amount of cost/resources. I think we're moving towards that. People want that, almost universally. And it's a pretty natural thing to want.

Edit: The conclusion here would be that yes, it's not sustainable to give both free and best to people if you're a company that wants to survive without evolving, but that's because the current economic model is a bridge between an old, unsustainable one and a new one. The successful companies have a foot in both models and can change gears with changing values.

Can I talk about a concrete example here instead of widgets, since it's kinda historical? My example is the book market, since that was one of the first retail breakthroughs in the new model. The big A quickly placed their foot in the old model (print, traditional publishers), then the new model (the auctions - remember those? And Zshops) and now in the indie publishing market. They did it initially with discounts, because they quickly realized that print books would be devalued (paper prices had already been skyrocketing and an alternative was needed to match the potential for online distribution) as electronic books would rise. They foresaw that print would be considered extraneous to newer generations (not like us fuddy-duddies, y'know) and undercut their local competitors so drastically their business acumen was questioned. They started appropriating the retail market as a whole both for the money and because it brings their users into the new era. From many directions, they set about building infrastructure to support their products. And then...and then...

So the takehome is:

Offer something to users they traditionally had to pay substantially for that's still valuable but only temporarily so (gotta look into the future with clear glasses here.)
Offer something to users of value that will sustain its value primarily in the NEW economy for significant profit.

Yes, in the short term, this devalues anything produced for the sustenance of the old model. That hurts. But in the long term, it also eases the transition.

Selen

2:41 am on Jul 14, 2015 (gmt 0)

10+ Year Member Top Contributors Of The Month



You presented my thoughts in an interesting and new light, thanks.

A related thought - most of us encountered some content behind a subscription (or registration wall). That is, the content or a tool would be available only to those who registered and/or paid. But it's easier (and cheaper) to do a new search and find what we want on another website 'for free' and that's what most of us do, ie. get what we want (and what has value to us) for free. Someone worked to create this value, but we as users get it free, usually without thinking or being grateful in return. And we are perfectly fine if we only get 60-80% of the 'best' value (eg. if we read a paraphrased article instead of an original one) because it is still a great (free) deal for us.

In the future there will be less original and updated choices when small webmasters and enthusiasts realize that they can spend their time working for money (or not working at all), instead working for free. By that time most of the 'answers' will already have an answer in all possible media formats, available for free, on sites managed by the big corporations.

Lapizuli

3:33 am on Jul 14, 2015 (gmt 0)

10+ Year Member Top Contributors Of The Month



Yes. As much as we try to maintain the values we're used to (i.e., it's right and proper to pay people for information), information wants to disseminate. Because of the ease of dissemination and the lack of control over it (no agency seems able to control the flow of digital data), we're going to be going through many more upheavals in intellectual property law. The current laws were designed to encourage enterprise in the old model and were based on the old-model realities and slowdowns of dissemination (though they looked like speed-ups at the time - yet "mass market" is an understatement today). Now information is instantly everywhere, multiple copies of it. But the reward system is still the old one, so people create intellectual property and then go unrewarded, so they must defend their property - i.e., sustain the old model enough to prop up the new. It's a mess and gonna get messier.

Edit: Oh, despite the visions in Darkness at Noon, 1984, Alien, and such dystopian worlds, I wouldn't necessarily assume it's going to be the corporations. The power structures today are, again, based on the dispersal of resources used in the old model. Resources are being disbursed in different ways (whatever Michel Foucault's issues, I think he was right about the dissolution of power). Bureaucracies are built and organized for stability; we are in a time of transition. If they can adjust, they won't be the bureaucracies we think of today: they'll be transformed. If they can't....well...

Nutterum

7:19 am on Jul 14, 2015 (gmt 0)

10+ Year Member Top Contributors Of The Month



I think a key note is missed in this discussion. Everything we discuss can thrive only in the digital space, aka the Internet. That said, Internet was never meant to be a venue for monetization of products, services, or information. It was build on the promise of connecting people and providing fast and foremost free information. The model of FREE and BEST is the #*$! child of companies moving their business model online or creating their business entirely in the digital space. To make their models work however, most companies took into account that users were used to getting information for free, so they (the companies) had to create a free and best, but temporary - the most widely used business model online. As for the economy, it is not changing nor evolving, not even transitioning. The only thing happening with the economy at a global level is oligopoly and more specifically 'dominant firm price leadership’ structuring of the markets. It is present in all sectors, from food & beverages to the heavy industries and biotech, medical, logistics and more recently the digital sector (e.g. Google, Apple, Microsoft, etc.). It is the natural evolution of the neoliberal monetary model.
This 34 message thread spans 2 pages: 34