Free Generation | Then & Now |What’s Your Model | How’s That Free | Psyched Out
The concept of free has been around for quite some time. In the late 1800′s, many American watering holes began offering free food to any barfly who purchased at least one drink. The bars, of course, were profitable because the tendency of human nature to socialize meant patrons stayed longer and drank more. The bar goers were effectively subsidizing their meal by purchasing their drink of choice. “There’s no such thing as a free lunch,” gained popularity as a phrase, so did people’s distrust from this earlier form of free.
Fast forward one hundred plus years and the concept of free is more abundant and viewed with less contempt, especially by the younger generations. Many items that were once paid for are now free without any “strings attached.” Radio and TV, the original free broadcasting options, continue to be free with even greater accessibility (mobile devices, Hulu, etc.). Open source and cloud computing are rapidly driving down the cost of software and its distribution. Yahoo! Mail, gMail, and Open Office are prime examples of free software. Facebook, Twitter, MySpace, YouTube, Flickr, Yahoo! Games, Pandora, and countless other online services designed to keep us connected, entertained, and engaged, are FREE!
Of course, all of these services are digital with all of the marginal cost benefits of bits and bytes. In other words, the cost of Facebook adding a single, additional user is an insignificant cost because the hardware, software, and bandwidth, necessary for a single user approaches zero. This is a direct of Moore’s Law which stated that computing power will double ever two years. With this doubling effect prices have also decreased, effectively meaning that the cost of a Facebook user today will be half as much next year.
Free is not isolated to the digital realm. Albeit not as common, free can even be found within the printing industry. Want 250 free business cards? Vistaprint offers those. How could they possibly make money offering a “real” product for free? Their recent press release should be enough justification that this model can work – 27% revenue growth.
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