Free Generation | Then & Now |What’s Your Model | How’s That Free | Psyched Out
According to Chris Anderson in his new book Free: The Future of A Radical Price, there are four models of free.
Direct Cross-Subsidies
Offering a “free” something, while generating revenue from another something.
- Free lunch with beer example from yesterday’s post.
- Buy one, get one free.
- Warehouse clubs food samples.
- Grocery store loss leader model.
Three-Party or Two-sided Markets
The consumer gets a free product from the distributor but the costs are subsidized by a third party. Most media is structured this way from TV, to radio, to print.
- Magazine subscriptions are subsidized by advertisers.
- Free blogs, in some cases but not at m-Bossed, are supported indirectly through ad revenue or affiliate programs.
- Credit cards are free to use, but the merchant pays a transaction fee.
Freemium
A basic version of a product is free, but advanced feature sets or add-ons are purchased.
- Flickr where premium accounts cost $25 a year.
- Facebook with vitual add-ons.
- Hallmark greeting cards with both free and paid for versions.
- Skype where computer-to-computer calls are free, but calls from computer-to-phone cost
Non-monetary Markets
Products are given away with no immediate expectation of payment.
- Paperbackswap.com, an online book swapping club
- Free section of Craigslist
- Freecycle
- Podcasts
Most businesses use a mix of the different models in the pursuit of profitability. Yes, giving away something to get paid for it or something else in return. Below are some possible uses for print shops.
- Cross-Subsidy: Offering a reduced or free price on one form of print, say business cards, while requiring a purchase of another, say letterhead.
- Two-sided Market: Print a guide of the local downtown area and get advertisers to pay for the print and distribution costs.
- Freemium: Offer Resume printing for free (big hit in this pressured job market), but offer chargeable value adds such as premium paper, matching envelopes, address imprinting, etc.
- Non-monetary: Put up “how to” videos which reduce the barriers to purchase like CopyCraft.
What other forms of free can you work into your print business? Leave a comment below or Retweet this using the link above.
