Someone Has To Pay For Free

confusion

Free InternetI have been writing this post in my head for a while after I was catching up on the drama that unfolded with Jason Calacanis and the people at Comscore.  If you have no idea what I might be talking about, you can read all about that flap on Jason’s Posterous blog, and certainly the echochamber that ensued following as compiled by Techmeme and listed out by Jason.

In the tech world online and in social media circles we have been trained that we can do a whole lot of things for very little, and in most cases, everything we want to do has a “Free” application associated with it.  Things like YouTube, Blogs, Twitter, Facebook, Flickr, and a plethora of other things we “sell” to clients and companies that come in our toolkit we obtained for free or for very little investment.  Our investment at this point has been the time it takes to understand and implement the use of such tools.  This has been a very lucrative part of being a social media consultant and I suppose why you cannot swing a dead cat in a room and not hit one or two of the “experts” in our business.  Free is always easy to sell.

I have talked before about “The Problems of Free“, and I also talked about how companies are using free as a business model. I want to turn back to the discussion or debate related to Comscore.  We have begun to expect companies to provide services online for free or for very little cost, and as I see it that proposes a problem somewhere in the chain.  Comscore cannot compete with Free.  Someone has to pay for free.

If you are providing a service online, or if you have the latest cool application and you offer it to your users for free, how do you make money?  I often ask many of the startups that come to me what their revenue model is and how they plan to make money.  This is usually followed of course with “How are you going to pay me?”  I am not yet providing “Free” for my own services.  Many companies have long drawn out plans with “ad revenue”, affiliate marketing”, or worse yet I get a blank stare of “we have not yet come to that part of the business plan.”

In the end, you have to pay for the service you provide, be it your time, servers, salaries, and long lunches at In-N-Out.  Comscore is having the problem explaining that they have to pay their bills.  We have to give our stockholders a piece of the pie and we have to pay our salaries and everything associated with the costs of giving you what you want.  They are not able to barter it all and they certainly cannot ask their employees to do it out of the goodness of their hearts, so they have to charge.  I am not sure whether Jason or anyone else has really come up with an alternative to charging for Comscore’s services, other than perhaps the aforementioned ad revenue or the like.  Someone has to pay for the free in the chain of the exchange.  The problem that I see is that Comscore is asking the customer to pay when others are offering it for “free”, but even in that instance, someone is paying for the free.

Photo via Photos8.com

Sponsored Status? Not Facebook

I have been a follower of the sponsored conversations and sponsored tweets and the sponsored anything for a while now and I intend to keep on top of it because it does have somewhat of a effect on my business model although indirect. TechCrunch talks about banning sponsored status updates from their application.  This will […]

Old Media A Job and New Media A Hobby: The Problems of Free

I was reading through an article on Spiegel Online International and an interview of Chris Anderson, Editor of Wired magazine.  The article goes into detail as to the thoughts of Anderson and how he perceives the idea of new media.  I wanted to pull out some of the quotes from that article and comment on […]

Living in a Facebook World?

For a long time I have been touting that we all live in a Google world.  We cannot seem to leave our house without first checking directions on Google, or order Chinese food without getting the local menu and number from Google, etc.  Many companies have come to us and asked, "How do we get […]

New Media Marketing? Is it taking a backseat?

online-business-tools1

Just reading over at Profy and Svetlana Gladkova asking the question, "Twitter is a Popular Marketing Tool?".  The analysis is interesting on Svetlana’s piece and I think you should read it.  The thing that caught my eye was less about the written words and more about the graphic she had in the post.   The […]

Blogging Networks Feeling The Economic Pain

headache.jpg

I have been following the story of Pajamas Media and the closing of their ad network operations as of April 1. This is not earth shattering news as we see the boom days of blog earnings begin to buckle under the economy and crash on the rocks caused by the storm. We have seen other […]

Budgeting Social Media Management

Reading Marketing Profs Paul Dunay’s post regarding the company budget for social media I found it interesting specifically about the idea behind content creation. Paul states: Ok but the real cost (again unlike the traditional media stuff) is in Content Creation to fill up those social media / new media channels – here is where […]

Twitter Keeps Flying But Magpie Makes The Money

magpie.jpg

As I was growing up in rural Colorado, we had plenty of opportunities to see magpies in their environment. They were usually standing over the latest roadkill. Basically they are scavengers. They get fed from nothing they have done on their own but finding the opportunity. I draw that picture to my own mind and […]

Black Friday–Are We Seeing The Demise of Blogging Networks?

dead.jpg

I have been watching the recent demise of one of my favorite blogging networks called Know More Media. A business blogging network with its focus on the business world. I have been reading Easton Ellsworth’s blog since it’s inception at Business Blog Wire. As I understand it they intend to discontinue paying their bloggers as […]

Technorati Changing The Way It Does Business

richardjalichandra.jpg

Technorati has been an icon of the blogosphere since Dave Sifry began the company to track blogs and provide bloggers with statistics and search.  It was the first thing people downloaded to their blogs, and the first part of setting up a blog.  They seem to have lost that celebrity status.  There are so many […]