« What’s the Techmeme Secret? | Main | Hurray for TheGoodBlogs »
How Do You Fight the Free Phenomena?
By Mark Evans | May 16, 2007
According to a study by the Business Software Alliance and IDC, piracy has cost the software industry a staggering $40-billion - which is a mountain of Windows, Office and other high-end products. Aside from the fact it’s a huge problem that shows few, if any, signs of going away soon, it also puts the spotlight on how the high-tech industry is losing the war against free (aka WAF). Not only do people want to have free software but they want free Web 2.0 services and, according to a Forrester report, free video as well.
How did we get here? I can remember the early days of the Web when freeware - usually utilities - were all the rage as long as you were willing to spend long periods of time for them to download using an agonizingly slow dial-up connection. Today, free is everywhere and everything. How many useful Web 2.0 services can actually charge you right out of game as opposed to pulling you in with a free service and hoping you’ll upgrade to a more feature-rich version? (As if!) When it comes to video, a bunch of major players (Google, Apple, NBC) are counting on the fact people will pay for downloads and streams. But if Forrester’s report is anywhere accurate, this fee-based model is going out the door - and soon.
Can software avoid the free phenomena? Clearly not despite massive legal and marketing efforts by the large players to attack the problem. There are many people who think nothing of using a pirated, copied or free version of Windows, Office, PhotoShop, etc. In China, more than 80% of all software being used is apparently pirated.
Is there any way to rescue ourselves from free? I mean, free doesn’t pay the bills, keep the lights on, cover the salaries for developers, marketers and CEOs. Free doesn’t inspire innovation (other than perhaps two guys working in their basement on the next great video-sharing service). Free is a scourge as much as everyone, including myself, likes the idea of free. Maybe it’s advertising that saves the day. Maybe it’s the idea targeted advertising can replace/supplement having to pay for something. For example, what if Photoshop users had to see targeted relevant ads from graphic arts suppliers, printers, etc. if they were using a free version.
For more, check out InfoWorld.
Topics: Main Page |
May 17th, 2007 at 3:41 pm
First off Mr. Evans I’ve been reading your blog for a few weeks now and wanted to say thank you for all the work you put into it, the quality of your posts is outstanding and I look forward to reading many more in the future.
With regards to this topic, I must admit I’m surprised that it took a formalized report to reveal what one might think to be common sense, that people want free media, software, and tools. That having been said, I think this leads us to a couple questions; why do people want free product? (especially off of the internet) and secondly, can advertising revenue streams pick up the “slack” from non paying consumers?
First off, why do people want a free product from the internet? Maybe it’s because somewhere in the back of our minds we think that because we are paying for a connection to the internet we are entitled to everything on it as well, or perhaps its because so often these “free” products have a shorter shelf life (when was the last time you used any version of software for more then a year?, and how many times do you really watch all those downloaded movies?) Now I will admit to being a bit of a digital pack rat, I hate deleting any media that I download and as a result have a stack of hard drives that I have collected over the years that I very seldom pull some old media from.
That brings us to the advertisers, and can they be enticed to finance the media hunger of the general public? There are without a doubt ample placement opportunities, direct ad placement on the website where the download would be available, advertisements included in the video (think a preview for a movie…but from only 1 company), and the tried and tested product placement option. All of these methods have the potential to target the direct demographic they desire by sponsoring shows, software, or other media for download.
It seems highly unlikely that the problem of piracy will stop anytime in the near future, so it seems to be up to the corporate world to find a way to continue to profit while giving their viewers (or clients) what they want. Remember the entertainment businesses as we know it isn’t that old, and maybe just like most other businesses as the consumers change their demands its the industry that has to follow suit.
May 20th, 2007 at 8:36 am
Thanks for the feedback. Free has become such a hot business model that suppliers need new ways to enduce consumers to pay - easy in theory, more difficult in practice these days.