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The "Dangers" of Free 242

Posted by ScuttleMonkey
from the poor-execution-kills-even-good-business-models dept.
With today's Free Summit broaching the subject of the "dangers" of free, TechDirt has an interesting perusal of why free often can't work without a good business model and why it often gets such a bad reputation. "I tend to wonder if this is really a case of free gone wrong or free done wrong. First, I'm always a bit skeptical of 'free' business models that rely on a 'free' scarcity (such as physical newspapers). While it can work in some cases, it's much more difficult. You're not leveraging an infinite good -- you're putting yourself in a big hole that you have to be able to climb out of. Second, in some ways the model that was set up was a static one where everyone focused on the 'free' part, and no one looked at leapfrogging the others by providing additional value where money could be made. The trick with free is you need to leverage the free part to increase the value of something that is scarce and that you control, which is not easily copied. [...] Still, it's an important point that bears repeating. Free, by itself, is meaningless. Free, with a bad business model, isn't helpful either. The real trick is figuring out how to properly combine free with a good business model, and then you can succeed."
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The "Dangers" of Free

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  • Fair beats Free (Score:5, Interesting)

    by alain94040 (785132) * on Monday May 11, 2009 @02:27PM (#27910541) Homepage

    The problem with free (gratis) is that it doesn't pay the bills for the developer. I'm not talking about being greedy, but accessories like kids, spouse and house come in handy in winter :-)

    That's why I have been giving more and more thought to a Fair business model, which would combine the best of two worlds: libre, but not gratis.

    The distributed revenue sharing part we already solved with FairSoftware [fairsoftware.net].

    It would work like this: Corporations and end-user would have to pay for the service or software. But it wouldn't quite be commercial. The proceeds would be shared among the development team. But you could still retain the rights to see the source and modify or tweak it for your environment. Your only constraint is that if you redistribute, you must pay the licensing fee to the original team.

    All it takes is to put more libre in the Software Bill of Rights. Volunteers?

    Call it sustainable development if you will.

    • Re: (Score:3, Interesting)

      by tritonman (998572)
      This is more than a software issue though, when it gets to services such as newspapers, this is where more problems come into play. Lots of people losing jobs at newspapers and whole businesses going under because of the flux of online news sites, many of which just repost stories written by newspapers and sometimes have conflicting information. What can you do about this though? Nobody wants the government to regulate all of this, but what can be done without it?
      • Re:Fair beats Free (Score:5, Insightful)

        by q2k (67077) on Monday May 11, 2009 @03:01PM (#27911093) Homepage

        The problem (with newspapers specifically) is that newspapers are not in the news business. They are in the advertising business. News was an excuse to sell eyeballs to advertisers. There are more efficient ways today to match up buyers and sellers, so newspapers are suffering.

        • Sort of half-true (Score:2, Insightful)

          by Cosmo the Cat (78184)

          They're in both the advertising business and the news business. They have to sell newspapers to news readers and they have to sell advertising to advertisers.

      • Re:Fair beats Free (Score:4, Insightful)

        by mattwarden (699984) on Monday May 11, 2009 @03:07PM (#27911181) Homepage

        Nothing should be done about it. It's a dead business model. It's called economic advancement, and it raises the standard of living of everyone in the long run. Yes, in the short run people lose their jobs and have to retool. But currently they are in a position where they create things of little value, and they should be moved into something that creates more value.

        • by cliffski (65094)

          so explain too us simpletons who still advocate a traditional business model how exactly investigative journalism happens if it has to be done by plumbers on their day off?

          People on slashdot talk about 'free' as a new business model as though its just an evolution of normal technology. It is *not*.
          Demanding that everything be free is no 'the next step' in any business mdoel, it is just a dead end.
          How many of your friends work 40 hours a week for free? how many of those people have a mortageg and kids?
          *free*

          • Re: (Score:3, Informative)

            by mattwarden (699984)

            Dude, these are two different things. Please point to investigative journalism that goes on NOW. Were you sleeping during the last 8 years?

            What you "simpletons" aren't getting is that the crap being distributed in the old model is not valuable enough to cover the costs of production. If you want to do investigative journalism, fine; I think that is clearly still valuable. But you need to deliver it in an appropriate manner. Or, if you insist on being nostalgic, the industry needs to consolidate such that th

      • Re: (Score:3, Insightful)

        by vlm (69642)

        many of which just repost stories written by newspapers

        newspapers don't write stories, unless you count the captions underneath pictures of kids, "human interest" stories about kittens rescued from trees, and complimentary (paid) copy about new business "grand openings" etc.

        The real "stories" all come from yesterday's AP or Reuters news feed.

    • by Anonymous Coward on Monday May 11, 2009 @02:34PM (#27910649)
      ...accessories like kids, spouse and house come in handy in winter :-)

      Name three things you really shouldn't burn just to keep warm. Sicko.
    • Re: (Score:3, Interesting)

      by speedtux (1307149)

      The problem with free (gratis) is that it doesn't pay the bills for the developer.

      If it didn't pay the bills, people wouldn't actually be doing it so much.

      My experience has been that free, gratis, and open source software has considerably more staying power and commercial support than most commercial software.

      The distributed revenue sharing part we already solved with FairSoftware

      And how is that working for you?

      • Re: (Score:3, Insightful)

        by DaveV1.0 (203135)

        If it didn't pay the bills, people wouldn't actually be doing it so much. My experience has been that free, gratis, and open source software has considerably more staying power and commercial support than most commercial software.

        I have noticed that most "free, gratis, and open source software" is crap, is written by students or people in their spare time, and once the writer (because most of it certainly isn't engineered) has to actually make a living, the software stagnates.

        If you don't believe me, head o

        • Re: (Score:3, Interesting)

          by honkycat (249849)

          I have noticed that most "free, gratis, and open source software" is crap, is written by students or people in their spare time, and once the writer (because most of it certainly isn't engineered) has to actually make a living, the software stagnates.

          While that may be true, I've noticed that most commercially produced software is also crap, only with a thin shiny veneer on the outside, just thick enough to generate sales. A polished turd is still a turd...

          So anyway, yeah, there's a lot of crappy free software, but there's also an awful lot of good free software too.

          • Re:Fair beats Free (Score:4, Insightful)

            by DaveV1.0 (203135) on Monday May 11, 2009 @04:13PM (#27912211) Journal

            there's also an awful lot of good free software too

            No, there isn't. There is a minuscule amount of good free software. Especially when compared to the total amount of free software. The good/bad software ratio is heavily in favor of commercial software.

            • That is very much true. However, that by itself leaves the door open for corporations like for example RedHat to select the good software from the bad. It's basically what most if not all the Linux distributions do.

              And it is also what closed source software companies are increasingly doing as more and more open source software is included.

              So you could say that the harder it is to find the nugget of gold in the mountain of open source dirt, the better it is for commercial open source companies.

            • by Jonner (189691)

              Well, it's a good thing you can distinguish between good and bad software. Maybe you can even employ that skill when choosing which to use. And if you choose Free [openoffice.org], Commercial [qtsoftware.com] software [mozilla.com], you can't lose, right?

              But seriously, if you don't have to pay any money for the privilege of installing and running some piece of software, that's one less thing you'll loose if it turns out to be a bad choice. I don't care how much bad software is out there (of any license or cost). I only care about the good stuff. If you a

          • by cliffski (65094)

            free software is not responsive to the marklet like commercial software is.
            if application A is commerical and has 2 bugs, one of which is a bastard to track down and fix, but is resulting in lost sales, and one is purely cosmetic and fun to fix, the bastard bug gets fixed first.
            if that application is free, the likliehood is the easy/fun bug gets fixed first, if at all, and only if the app developer hasnt got any cool new features he wants put in.

            Comemrcial software has the benefits of accurate signals being

        • Re:Fair beats Free (Score:5, Insightful)

          by digitig (1056110) on Monday May 11, 2009 @03:39PM (#27911677)

          I have noticed that most "free, gratis, and open source software" is crap

          So is most non-free, non-gratis and closed source software. You just don't notice it so much, because you tend to do more research to find the good stuff before handing over your hard-earned, whereas just a click to try something out seems so easy and tempting.

          • by DaveV1.0 (203135)

            Yet another claim that is not supported by anything.

            • Re: (Score:3, Insightful)

              by digitig (1056110)
              It's supported by the shelf on which all the shelfware I've bought over the years stands.
            • Yet another claim that is not supported by anything.

              As opposed to your well-supported and not-wholly-anecdotal claims.

        • by speedtux (1307149)

          I have noticed that most "free, gratis, and open source software" is crap,

          Yes, free software shares that with commercial software. It's because most software is crap. Whether people charge for it or not is an unrelated property of the software.

          Apparently, you don't understand the words you are using.

          Apparently you don't understand the difference between paying for a software license and paying for support.

          • by DaveV1.0 (203135)

            Yeah, why don't you support your statement. Oh, wait, you can't because you don't use commercial software. So, you have made a statement that is completely unsupported. Good going.

            • The term "commercial" has no meaning when it pertains open source. Selling support on top of open source or closed source makes very little different. Most companies would claim that they are commercial.

              • Re:Fair beats Free (Score:4, Informative)

                by Jonner (189691) on Monday May 11, 2009 @06:56PM (#27914879)

                The term "commercial" could mean several things when applied to Free or Open Source software, such as "used for operating a business" or "used in supporting clients." However, the way it's usually used is incorrect and misleading. Many people use "commercial" to mean "proprietary," which is the opposite of Free or Open Source. However, since many people and companies use Free or Open Source software in a commercial context, using "commercial" to mean "proprietary" just muddies the water.

        • by dbIII (701233)
          Most software is crap so I consider your argument completely irrelevant. IMHO the only way to stay on topic is to point at very successful free and non-free software and consider why each is successful instead of indulging in wild generalisations.
    • by wiredog (43288) on Monday May 11, 2009 @02:39PM (#27910733) Journal

      No, not a land war in Asia. From here [chaosmanorreviews.com]:
        The Open Source and CopyLeft people are acting as if common sense prevails in US copyright law, and they are, I am told, dead wrong.

    • Re:Fair beats Free (Score:5, Insightful)

      by nine-times (778537) <nine.times@gmail.com> on Monday May 11, 2009 @02:41PM (#27910753) Homepage

      Your only constraint is that if you redistribute, you must pay the licensing fee to the original team.

      I guess that's part of the problem right there: what constitutes the "original team". I assume the project can't be forked, or else you'd have to continue to pay the original team? And how much payment is warranted in that case? As you phase out the original code with your own, can you pay less? What If I just want to grab some small part of code for a totally different project, do I have to negotiate separate licenses for each piece, or do I have to pay a blanket fee as though I'm going to distribute the entire project?

      Maybe "FairSoftware" has all the solutions to these questions, but it seems like these are lots of potentially complicated issues. I would guess that, the more complicated the licensing issues, the less readily people will be to contribute.

    • The problem with the Fair Software model is that it doesn't seem to take expansion into the picture. When you run an at cost business then you have no capital to expand with, unless you want you developers to take a pay cut as you expand the company. Or for every employee you hire it is considered less pay the the original programmers pocket.

    • Re: (Score:3, Insightful)

      by h4rr4r (612664)

      If you cannot distribute your modified source without paying somone you do not have any freedom at all.

      The owners can just change the price to $1 million the minute they decide they no longer want to compete against you or see your derivative work out in the world.

    • Re: (Score:3, Interesting)

      by mattwarden (699984)

      Good idea, but it won't work. You're essentially asking the community that is currently giving away software to decide, collectively, to start charging for it. That isn't going to work, for the same reason that music CDs no longer sell. There will always be a way to get a comparable product for free.

      The value of software is no longer its functionality. It's intellectual property (controversial to say here, I know), warranty, support, and documentation.

      Think back a decade ago when we were all getting paid $4

      • Why do people write software to give away free (gratis & libre), even very good quality software? Well, there are a range of answers, but I am always most impressed by that given by the Stone Soup Group:
        "Don't want money. Got money. Want admiration."
        The Stone Soup Group in the late 1980s to early 1990s created Fractint, which was computationally a very efficient fractal generator and which could exploit irregular tweaks on all sorts of graphic cards.
    • Re: (Score:3, Interesting)

      by Red Flayer (890720)

      It would work like this: Corporations and end-user would have to pay for the service or software. But it wouldn't quite be commercial. The proceeds would be shared among the development team. But you could still retain the rights to see the source and modify or tweak it for your environment. Your only constraint is that if you redistribute, you must pay the licensing fee to the original team.

      Re: the part in bold: how is that not commercial? Just because the revenues are shared by the developers? The very

    • Re: (Score:3, Informative)

      by jmcvetta (153563)

      The problem with free (gratis) is that it doesn't pay the bills for the developer.

      I manage to pay my bills -- which in Boston are not inconsiderable -- by writing Free Software.

    • Re: (Score:3, Insightful)

      by Jah-Wren Ryel (80510)

      Your only constraint is that if you redistribute, you must pay the licensing fee to the original team.

      Your proposal has gots lots of problems

      1) It is just another variant on creating artificial scarcity of a non-scarce resource. Trying to restrict distribution is like trying to prevent people from talking to each other.

      2) Few people are going to contribute casually to any such project due to the restrictions on redistribution and the almost certain unfairness in distribution of funding. For example: who should get paid more - the average coder who churns out hundreds of lines of code and spends hours eac

    • Re:Fair beats Free (Score:5, Interesting)

      by Just Some Guy (3352) <kirk+slashdot@strauser.com> on Monday May 11, 2009 @03:10PM (#27911227) Homepage Journal

      The problem with free (gratis) is that it doesn't pay the bills for the developer. I'm not talking about being greedy, but accessories like kids, spouse and house come in handy in winter :-)

      News to me. My boss lets me release my work projects [sourceforge.net] as Free Software because they're not related to our business (i.e., we need their functionality but only as a means to an end) and we're not set up to handle software sales or support. If we're not going to make money off it, and someone else could use it, then why not? We've gotten bug reports and feature requests that made it work better, so we're actually better off for having given it away.

      I think you'll find that the vast majority of FOSS comes from similar situations.

    • Re: (Score:3, Interesting)

      by randallman (605329)

      This sounds similar to what I want to do. I wrote about it a few months ago here [tnr.cc].

      1. free to view
      2. free to modify
      3. free to redistribute AFTER some time period

      There's some more to it (see link), but the idea is to have the effect of a reasonable copyright period. Say 7 years. I'm working on some software now that I want to release under this license within 6 months. I would be very interested in discussing this further.

    • by afabbro (33948)

      The problem with free (gratis) is that it doesn't pay the bills for the developer. I'm not talking about being greedy, but accessories like kids, spouse and house come in handy in winter :-)

      Please elaborate on how kids come in handy in winter. Are you a cannibal?

    • by syousef (465911)

      I'm not talking about being greedy, but accessories like kids, spouse and house come in handy in winter :-)

      Be honest! You mean treating wife like accessory in winter leads to kids. kids are useful accessories for taking the trash out at all times of year. Unfortunately like many good accessories they need to be trained/customized. This involves changing nappies for 2-3 years, then toilet training, so I'd like to suggest that as an accessory they are more trouble than they are worth ;-)

      I wouldn't trade mine for the world by the way.

    • by zotz (3951)

      I am quite OK with someone making a libre but not gratis play if they can pull it off. I am all for people finding ways to earn an honest living while making libre stuff if that is what they desire to do.

      With that said, it sounds like your plan kills the libre part of the game to me. Would you care to explain how the software would still be Free under your plan?

      all the best,

      drew

  • Obvious? (Score:5, Insightful)

    by mooingyak (720677) on Monday May 11, 2009 @02:42PM (#27910785)

    free often can't work without a good business model

    Last I checked proprietary suffers from the exact same problem.

    • Re: (Score:3, Insightful)

      by jellomizer (103300)

      Yes but at least if you are planning to sell software you have a business model. Some times when people go to free software for a business they kinda forget a key component on where the money comes from.

      • Yes but at least if you are planning to sell software you have a business model.

        Ha ha ha ha ha ha ha ha ha ha ha ha ha. You must be new to the software business.

      • by PitaBred (632671)
        My business model is selling my piss in Mountain Dew bottles. Just having a business model doesn't mean it's a good one.

        A good business model leverages a SCARCE good, not an infinite one. For example, oxygen bars. Everyone gets oxygen while breathing, but the special scented, concentrated oxygen costs extra. Apply that to software: the bits are free, but support and further, targeted development costs money. And NOW you have a sustainable business model that leverages the scarce good (your time and expert
      • Re: (Score:3, Funny)

        by jonaskoelker (922170)

        Some times when people go to free software for a business they kinda forget a key component on where the money comes from.

        Easy! They come from Mark Shuttleworth.

        What, you have to learn stuff to become an MBA? ;)

    • by DaveV1.0 (203135)

      Please demonstrate a successful business model that relies on giving away the product for free.

      • Re: (Score:3, Insightful)

        by KeithJM (1024071)

        Please demonstrate a successful business model that relies on giving away the product for free.

        It depends on what you think the product is, and what the company thinks the product is. One example would be broadcast television (or radio before that). You can turn it on and watch for free, but what you don't realize is that YOU are the product they are selling (cue Russia jokes).

        But still, the model holds -- they spend a LOT of money developing a product which is then given away for free. You could argue that it doesn't RELY on giving the product away for free, because cable manages to charge for

        • by DaveV1.0 (203135)

          One example would be broadcast television (or radio before that). You can turn it on and watch for free, but what you don't realize is that YOU are the product they are selling (cue Russia jokes)

          Either way you look at it, the product is not free because the advertiser is paying for it.

          They do not give the product away. If that were the case, then shows would not go off the air when groups threaten to boycott the sponsors.

          Just because YOU don't pay for it, it is not necessarily free because, as you said, YOU

          • by KeithJM (1024071)
            Still, they spend millions producing a product and then give it away. Yes, of course they make money selling something else -- it wouldn't be a business model if there wasn't a source of revenue. But the primary product they produce is given away for free, and it's been a successful business model for decades.
            • Re: (Score:3, Insightful)

              Still, they spend millions producing a product and then give it away. Yes, of course they make money selling something else -- it wouldn't be a business model if there wasn't a source of revenue. But the primary product they produce is given away for free, and it's been a successful business model for decades.

              The primary products they produce are advertising slots. The secondary byproduct is the music -a nd even that is not wholly free unless your time is worth nothing.

              • Commercial open source companies (RedHat and all) don't sell software licenses. Sure, you can get a license to some additional add-on software here and there, but the bulk of the deal is a subscription to support in most cases.

                Not software but the expertise knowledge on the open source software is what being sold.

      • by vlm (69642)

        Please demonstrate a successful business model that relies on giving away the product for free.

        The seemingly innumerable competitors to the official "telephone directory book" aka the trademarked phrases "yellow pages" and "white pages".

        I used to keep them in a drawer thinking I need a phone book, and I'll get around to throwing out last years edition, uh, later. Some years later I realized I had never cracked open any of them... if the business can't be found by google, then for me it doesn't exist. I threw out well over two cubic feet of "old phone books" and now when I receive them they go right

        • by DaveV1.0 (203135)

          The seemingly innumerable competitors to the official "telephone directory book" aka the trademarked phrases "yellow pages" and "white pages".

          Those are not free. Those are paid for by the advertisers in the yellow pages.

          Broadcast TV and radio? Of course the product they are giving away is your eyeballs watching someones advertisements

          Your own words show that the product is not free. It is paid for by advertisers.

          How about church? Of course, conveniently, your soul won't be saved unless you donate, but tech

          • by shrikel (535309)

            Those are not free. Those are paid for by the advertisers in the yellow pages. ... Your own words show that the product is not free. It is paid for by advertisers.

            Well, duh. But they are free to the recipient.

        • by honkycat (249849)

          Those old phone books are occasionally useful. It's sometimes hard to find low-tech, small, local businesses (e.g., plumbers) online.

      • Ummm... /. ?

        Not exactly taking over the world, but still holding their own [cnn.com].

      • by PitaBred (632671)
        How about Redhat? They give away all their product for free (if they didn't, CentOS wouldn't exist). Yet, last time I checked their ticker they were successful [yahoo.com]. They sell the scarcity... support, expertise and time. Bits are essentially infinite... time and expertise are not. People will pay for things that aren't infinite, and will pay quite well if you do it right. Hell, that's pretty much IBM's entire services business. They sell you the contractors to make code to do what you want.
        • by DaveV1.0 (203135)

          How about Redhat?

          As so many people are fond of saying, RedHat's product is not Linux, but rather support for Linux, which they charge for.

          • Re: (Score:3, Interesting)

            by mooingyak (720677)

            No company exists that can make a profit without charging someone for something. If that was the point you were trying to make at the beginning, then... okay, point conceded.

            But as for this question:

            Please demonstrate a successful business model that relies on giving away the product for free.

            You've already been answered by multiple posters. Broadcast TV/Radio. Regardless of whatever else they do to make money, they still produce a product and then give that product away to people for free. Same applies to the myriad phone book companies and software producers like Redhat or MySQL.

            If you're tryin

  • by coolmoose25 (1057210) on Monday May 11, 2009 @02:43PM (#27910809)
    From TFA, the example was an over abundance of free newspapers delivered to people's doors. The problem with such a model is that there is no way to measure the demand for the paper

    We have a similar situation where I live. There is a free weekly paper that is available in newspaper boxes. There are two papers that are delivered to your door.

    The newspaper box one requires the consumer to actually take one from some "central" location - there is a cost to the "free" paper - the cost of getting a copy is going to one of the newspaper boxes and taking one.

    In the other two cases, the papers show up on your doorstep. My brother didn't want one of them, and he fought bitterly with the provider to stop "littering" his door with them. If you go away for a couple of weeks, the piled up papers become a neon sign saying "No One Is Home"... Try as he might, he could not get the door delivered paper to stop showing up.

    One person's free is another person's litter.
    • Re: (Score:3, Insightful)

      by PCM2 (4486)

      One person's free is another person's litter.

      Very true. Businesses should never underestimate the capacity of something that is "free" to annoy the customer. I thought a little bit about this when Sun Microsystems started talking about how it could monetize JRE downloads by offering the installer as a marketing channel to advertisers. I've often heard people gripe about how annoying it is when, every time you download another JRE update, you have to un-check the little box that says "download and install the Yahoo toolbar too." Most people who downlo

      • I thought a little bit about this when Sun Microsystems started talking about how it could monetize JRE downloads by offering the installer as a marketing channel to advertisers.

        It may be moot now, but that's not what Sun was talking about. Or at least that's not what Schwartz said in his blog. He was talking about monetizing their free stuff in a lot more useful way to the customer - not force-feeding things down their throats. For example, an online print bureau could pay to have access built into OpenOffice so that they would be a standard option on the Print dialog. Or an online storage provider could pay to be built into the Save and Open dialogs.

    • by causality (777677)

      In the other two cases, the papers show up on your doorstep. My brother didn't want one of them, and he fought bitterly with the provider to stop "littering" his door with them. If you go away for a couple of weeks, the piled up papers become a neon sign saying "No One Is Home"... Try as he might, he could not get the door delivered paper to stop showing up.

      If they were taking the papers all the way up to his doorstep, they were probably coming into his property in order to do so. Just curious, was there

      • He was able to successfully get them to stop for a short time. Right up until the next delivery person in the rotation picked up his neighborhood, and having no knowledge of his desire not to have the paper, started delivering it again. Since the pay for such jobs suck, the turnover in delivery folk was high. So every time they turned over, he'd have to call and get them to notify the delivery person NOT to deliver to his door. Life's too short

        I've had the same problem with the Hartford Courant which i
        • My plan would be a fair bit simpler - call them and ask why they keep sending a paper you cancelled months ago. Then, when they send delinquent notices, call them up and tell them off - if they turn you over to collections, they're probably liable under the FDCPA, since you've got no legitimate debt with them. Take them to small claims court and go for statutory damages. With any luck, you win and they start the whole thing over.
      • by Grishnakh (216268)

        I don't know about the parent, but I get unwanted free papers on my property too. Here in Arizona, many houses don't have "front" doors visible from the street; only the garage is visible from the street. The free papers are simply thrown onto your driveway by the delivery person as he drives by.

        And as stated before, if you go on vacation for a couple weeks, the papers pile up, making it plainly obvious that no one is home.

        It's a real nuisance. But I've never found a way to solve the problem; the law see

    • Re: (Score:3, Funny)

      by Jah-Wren Ryel (80510)

      My brother didn't want one of them, and he fought bitterly with the provider to stop "littering" his door with them. If you go away for a couple of weeks, the piled up papers become a neon sign saying "No One Is Home"... Try as he might, he could not get the door delivered paper to stop showing up.

      For a while, my daily commute took me right past the offices of one such "free" newspaper.
      It only took about 30 extra seconds to swing through their parking lot and toss the copy of the paper they had left for me onto the sidewalk in front of their office's front door. It never stopped them from littering on my property but it felt good every time I did it.

  • WTF? (Score:4, Interesting)

    by Locke2005 (849178) on Monday May 11, 2009 @02:45PM (#27910849)
    No business can succeed without a viable business model, regardless of whether or not it is based on delivering a "free" product. As far as free Danish newspapers, why would anybody pay money to print and deliver information that 99% of your customers could access for free over the internet, with a much lower marginal cost per customer? The Oregonian used to throw free newspapers in my driveway every tuesday and thursday; I had to tell them 3 times to stop because I consider it to be Criminal Trespass and Offensive Littering, both of which are unlawful in Oregon. It is not just a bad business model -- it is one which is actively offensive to potential customers which would rather save trees and know that most of these free newspapers go straight into the trash without even being read.
  • There ain't no such thing as a free lunch.

    It might be a bit simple, but sometimes simple works. There is always a cost for something, "free" give aways are cost justified somehow, be it a one time get you hooked sort of idea, or a recoup losses elsewhere shifting of the burden, but the simple fact is, someone, somewhere is paying for that. Doesn't even have to be money, could be as simple as time or energy, but rest assured, there is always some sort of cost associated with everything.
    • by FooAtWFU (699187)
      On the other hand, in an efficient free market, the price of a good will approach the marginal cost - in the case of software, that's zero-per-copy or pretty darned close to it. Since most software is not free, you can infer that the software market is not efficient, and software is probably being under-produced. This is consistent with the notion that the production of free software has significant positive externalities.
  • Damn you for making me reference Joel On Software
    http://www.joelonsoftware.com/articles/StrategyLetterV.html [joelonsoftware.com]
  • I have here on slashdot with a box to check off, to disable ad, for my "contributions". Yeah, like, I haven't seen an ad here since when, I don't remember.

    But how is that related to the story? I am not sure - mention of "business model" seem to turn off my brain.

  • If you give stuff away you need a good plan to make a profit from it.
  • by pla (258480) on Monday May 11, 2009 @03:26PM (#27911469) Journal
    Free, by itself, is meaningless. Free, with a bad business model, isn't helpful either. The real trick is figuring out how to properly combine free with a good business model, and then you can succeed.

    No. The author of TFA fails to grasp one major point - Sometimes no "trick" exists, period.

    I get so sick of hearing business oriented people bitching about how "free" does or doesn't work, or how to make "free" work for them. They don't need to learn the tricks to making "free" work, they just need to learn that "free" means free, and none of us give the least bit of damn if they can make a profit or not.

    I use (and create, though can't claim credit for any well-known projects) Free-with-a-capital-"F" software because I believe in it. I use free (lower-case) software because in my experience, it works just as well as non-free software, without all the artificial restrictions imposed to convince me to pay for "value added" BS ("Oh, you can't use critical-widget-X unless you buy the All-Things-X add on pack!"). I read free news because I don't care to pay for the opinionated rantings of various journalists (hint - Your job description involves reporting, not "change", quit pretending you can or should make a difference); when a tenth of the human population can reach the whole world with coverage of local events, reporters have very little role left to play. I even eat free fruits and berries while out hiking, because they taste a hell of a lot better than giant-but-tasteless garbage the industrial-ag market has tried to pass off as "food".

    Put simply, I, and most people, like "free" precisely because of its standard definition - It doesn't cost us anything! As soon as you try to twist that, you haven't added a "trick", you've pissed us off.

    So the "trick" to free? Don't call your product that unless you expect nothing in return. If you come crying with your hand out after-the-fact, don't worry, I won't laugh with you, I'll laugh at you.
    • by Todd Knarr (15451) on Monday May 11, 2009 @03:35PM (#27911625) Homepage

      No, he does grasp one essential point: the bills have to be paid. Whatever you're producing, there's costs that you've got to have the money to cover. Utility bills, payroll, taxes, cost of materials, it all takes money and you need to come up with that money from somewhere. Either you're funding the whole thing out of your savings, or you need to find a way to earn revenue from the project. And if you intend to give away your product for free, then you'd better know what other source you're going to get revenue from or you'll be finding your bank account emptied at an alarming rate and when it hits zero the bank won't let you write any more checks no matter how many you've still got in your checkbook.

      Yes, we as consumers of the free product don't care about any of that. But the guy producing the product had better care, because the bills still need to be paid.

  • by petes_PoV (912422) on Monday May 11, 2009 @03:28PM (#27911509)
    Everything you do or obtain has a cost attached. That might be financial or it might be the investment you make in time, emotional attachment or not doing other things.

    For example, take the act of downloading and installing a piece of "free" software from the 'net. You spend time to download it. Time to work out how to install it and even time (hopefully beforehand) to read through it's features, bugs and abilities to find out if it will solve the problem you have.

    If you get as far as trying it out, then discover there is a reason why you cannot use it, you have lost the time you spent getting that far. If you have had to buy something else (such as a memory upgrade, new disk or printer, etc.) to use with this free software - that tangible cost has been lost: to some extent.

    Now, if playing with software is merely a hobby, then you're probably willing to spend time messing about - with no expectation of getting a usable result at the end. Afterall, with hobbies half the fun is getting there, rather than exploiting whatever it is you have made. When it comes down to it, a large amount of free software is simply "hobby" quality and should be approached with no expectation of support, bug-fixes or updates. In the long term, this is probably the most expensive form of free software.

    However, if you're running a business, or intend to use this free software for work, there is a very real loss involved in having to junk an installation and go find an alternative. Spend a day getting an email server running for your business, without success and a $500 commercial product could well work out cheaper than the "free" version you downloaded, just in the cost of your lost time. Similarly, for a home user, it may well be worth spending $100 on a package you can just drop in, with the certainty it will work than to waste your sunday off trying to find accurate and up-to-date documentation for a piece of OSS.

    In my experience, the biggest thing that "free" software has going for it in business, is tha ability to avoid the onerous paperwork/approvals required to spend money to buy a product. Free stuff doesn't need any of this and can be downloaded, installed and tested without having to involve any authority. Others however, would argue that this is also it's biggest weakness.

  • I will read the rest, maybe it will clean up. But: "I'm always a bit skeptical of 'free' business models that rely on a 'free' scarcity (such as physical newspapers)."

    Where did this person grow up, in the Congo? That he doesn't know the history of newspapers?

    Nearly all newspapers started out as "free". But of course, they were "free" in the sense of Google and certain other Web businesses: either they had a sponsor (with an agenda), or were paid via advertising. So of course they weren't absolutely "f
  • We Are Volunteers (Score:3, Informative)

    by twmcneil (942300) on Monday May 11, 2009 @04:25PM (#27912427)
    There are of course, many uses of the word "free" when associated with software. From what I can see, TFA is referring to the situation where some entrepreneur somehow believes that he can make massive amounts of money by getting others to do his work for free. Obviously, his plan is destined to fail and then our intripid entrepreneur gets all pissey about how the model broken because it sure couldn't have been anything he did wrong.

    He looks at us like we are so many lab rats. He fully believes that all he has to do is figure out where to place the cheese and we will all go crazy to make his software for him so he can reap great profit while all he is out is some stinking cheese.

    We're not lab rats. We are volunteers. We volunteer for many of the same reasons that people donate to charities, spend time with youth groups or work a few hours each week at a soup kitchen. Why have we not been subjected to articles about someone setting up a soup kitchen, attracting volunteers and then getting all pissey because he wasn't able to properly monetize the situation? Because expecting to do so would be really fucking stupid.

    Quit thinking you're going to get rich quick off our backs; embrace volunteerism for what it is, an act of altruism.
  • We have a business model. It involves payment in kind rather than the exchange of cash. Perhaps that's why the MBAs and other parasitic classes don't understand it. Or, they understand it, but they don't like it very much because they can't figure out how to take their percentage off the top.

It's a poor workman who blames his tools.

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