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Before Trying Free Music, Free Films and Free Books

The World of Freemium Services

freefreeI call these free give aways as  freemium services? In this post we will analysis the free economics a little more. After this in next post I would start giving you tips on how to get every stuff in a safe manner.

Sometime back I was reading an online article by Chris Anderson the editor in chief of Wired and author of The Long Tail. His words mesmerized me:  ‘You know this freaky land of free as the Web..‘ Anderson elaborates later, ‘Once a marketing gimmick, free has emerged as a full-fledged economy. Offering free music proved successful for Radiohead, Trent Reznor of Nine Inch Nails, and a swarm of other bands on MySpace that grasped the audience-building merits of zero. The fastest-growing parts of the gaming industry are ad-supported casual games online and free-to-try massively multiplayer online games. Virtually everything Google does is free to consumers, from Gmail to Picasa to GOOG-411.

Anderson reminds in his long article, ‘ Last year, Yahoo announced that Yahoo Mail, its free webmail service, would provide unlimited storage…So the market price of online storage, at least for email, has now fallen to zero. ..Storage now joins bandwidth (YouTube: free) and processing power (Google: free) in the race to the bottom. Basic economics tells us that in a competitive market, price falls to the marginal cost. There’s never been a more competitive market than the Internet, and every day the marginal cost of digital information comes closer to nothing.

Expensive World of Gift Economyfree-economics1

What I liked in the article was the warning, with which I started my blog that there are traps within this free give away tactics. So before unzipping your empty bags and filling them with these free offers, you have to understand that every company which is offering you any free item is actually here on the web to earn huge money, massive profits, innumerable clients, matchless reputation and unfading credibility.

This expensive online existense costs them a bank of hard drives, maintaining a database of tens of thousands of free give away hungry users, running & protecting their servers round the clock, costly online advertising and on salaries of the experts who run their shows. Definitely it’s really really very expensive.

So, before jumping inside this quicksand note it again that you should not do anything that may expose your real identity.

I would quote Anderson again, ’you have to always keep this in mind that in a sense, there are dozens of ways that media companies make money around free content, from selling information about consumers to brand licensing, “value-added” subscriptions, and direct ecommerce.

‘In this system, what’s free: web software and services, some content. Free to whom: users of the basic version. Did you notice, I said free to the users of the basic version.  To remind you I would like to draw your attention to a range of basic versus premium service forms: varying tiers of content, from free to expensive, or a premium “pro” version of some site or software with more features than the free version (think Flickr and the $25-a-year Flickr Pro).

Anderson highlights in his article that any product that entices you to pay for something else is free to you. Free to whom: everyone willing to pay eventually, one way or another…you can get free porn if you solve a few captchas, those scrambled text boxes used to block bots. What you’re actually doing is giving answers to a bot used by spammers to gain access to other sites — which is worth more to them than the bandwidth you’ll consume browsing images. Likewise for rating stories on Digg, voting on Yahoo Answers, or using Google’s 411 service (see “How Can Directory Assistance Be Free?”). In each case, the act of using the service creates something of value, either improving the service itself or creating information that can be useful somewhere else.

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  1. Very true, everyone should be very cautious before downloading the stuffs claimed to be free.