The "Dangers" of Free 242
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."
Re:Fair beats Free (Score:5, Insightful)
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.
Obvious? (Score:5, Insightful)
free often can't work without a good business model
Last I checked proprietary suffers from the exact same problem.
Free needs to be combined with demand (Score:3, Insightful)
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:Fair beats Free (Score:3, Insightful)
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:Obvious? (Score:3, Insightful)
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.
Re:Fair beats Free (Score:1, Insightful)
The problem with free (gratis) is that it doesn't pay the bills for the developer.
That's only true if you view the gratis software as the product, instead of being a component of the product.
Your customers aren't buying software. They're buying a solution. Don't focus too much on the software. If so, you're doomed to fail. In a free market, the cost of software will tend drop to zero since it's an infinite good. It is scarcities you should be selling, such as reputation, software support, software customisation, etc.
Re:Free needs to be combined with demand (Score:3, Insightful)
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 download software updates just want the software updates. They don't want some other add-on junk that they never asked for. So here's Sun going to different companies, telling them, "We have millions of downloads a month, you could reach all of those people!" What Sun isn't telling the potential marketers, though, is that if they use that marketing channel, the same customers they are trying to reach will hate them for it.
Re:WTF is going on? (Score:1, Insightful)
Can you tell me what the f**k has been going on lately with all those "anonymous cowards" posting bogus messages at the top of every story? I think this "post anonymously" checkbox should be removed, and one should always be authenticated to post something on /.
Anyway, have you ever seen one of those chicken bring anything useful to the conversation?
Some of us have applied for an account but our email service keeps eating the emails, or /. is having issues. Take your pick.
I would have you know that I have gotten a couple of +3 interesting posting as an anonymous coward. So yes, I'd say that one of us have brought a couple of useful things to the conversation.
Re:Fair beats Free (Score:3, Insightful)
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 each day doing it, or the smart guy who frequently does the equivalent in a few minutes and a handful of lines? Whose going to decide without a complete employee/employer relationship?
Like the article said, if you want to make money, you need to focus on controlling what is naturally controllable - scarce resources like the labor that goes into the creation of the software.
Re:Fair beats Free (Score:5, Insightful)
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.
Re:Fair beats Free (Score:4, Insightful)
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.
Re:Fair beats Free (Score:3, Insightful)
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.
Re:Obvious? (Score:3, Insightful)
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 it, but Google still uses this business mode for the most part. I could argue that their business model for, say, gmail wouldn't be as effective if they charged you to use the service.
Re:Fair beats Free (Score:1, Insightful)
Newspapers don't sell news to readers, they sell eyeballs to advertisers. A "free newspaper" is a meaningless term, since the readers are not the clients...they are the product. The newspaper "price" is just a discount on the eyeball purchase price.
Is ebay's business model doomed because they "give away" their auction listings for free? No, because they bridge two networks (buyers and sellers), and charge one of those groups a transaction commission. The more buyers that leech off of ebay, the more the sellers are willling to pay.
All of this assumes, however, that the newspaper is ad-supported. If you start a for-profit, ad-free, free newspaper that is delivered for free, then you are just fucked.
Re:Fair beats Free (Score:3, Insightful)
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 over to source forge or fresh meat and see for yourself.
Yeah, right. There is a difference between staying power and "hanging around like an ugly lamp no one has bothered to get rid of"
Apparently, you don't understand the words you are using.
There's no such thing as free (Score:3, Insightful)
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.
Re:No, no, no... Did I mention "No"? (Score:4, Insightful)
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.
Re:Fair beats Free (Score:5, Insightful)
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.
Re:Obvious? (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.
Re:Fair beats Free (Score:4, Insightful)
Then you're not developing free (gratis) software. You are developing paid-for software that has one paying customer (your boss) who decided others can also have it (gratis).
That's a meaninglessly stupid distinction. All work is paid for in some way, whether it be by selling it or having it sponsored by an employer or even done for free on a PC donated by a charity. At some level, someone is investing the resources (i.e. paying) for the work to get done.
I can't name a single piece of gratis software by your standard. Linux sure isn't, and neither is any major program I run on it.
Re:Fair beats Free (Score:4, Insightful)
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.
Re:Fair beats Free (Score:3, Insightful)
Re:Fair beats Free (Score:4, Insightful)
Sort of half-true (Score:2, Insightful)
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:2, Insightful)
Re:Fair beats Free (Score:3, Insightful)
I don't understand how you can have that position in the face of all the data suggesting that newspaper readership is dropping off at an alarming rate. Will it go to zero? Surely not. But every industry has fixed costs of production, and with newspaper those fixed costs are VERY high relative to the variable costs of printing 1 more copy. So, as quantity goes down, profit per unit shrinks much faster than in other industries where fixed costs are smaller.
Re:Fair beats Free (Score:2, Insightful)
Unfortunately, businesses need to change or they will become obsolete. Sears and The Bay used to have a ton of their business come via their catalogues and mail-in shopping, since it wasn't financially viable to have large retail outlets with everything in stock all over North America.
Once populations increased and what once were rural areas became urbanized cities, the companies could afford to open more stores in more places, making it often unnecessary to order out of the catalogue. Now you've got online shopping, making the print-catalogue wasteful, costly and relatively environmentally unfriendly.
The same thing will happen to all print media, eventually. Once the quality and availability of online media hits critical mass (devices like Amazon's Kindle or "smart" phones and their service subscriptions become faster, more reliable and cheaper), print media will be dead except for a few niche markets (like vinyl LPs in music at the moment).