Free costs too much

'Most consumers get it. There's already a free operating system for computers: Linux. Yet netbooks running Windows outsell their Linux counterparts by a margin of nine to one. In other words, free is getting trounced.

Why? Because free costs too much, weighed down with hassles that you'll happily pay a little to do without. That's why people buy bottled water and cable TV. That's also the model that The Wall Street Journal uses to goad people into paying for news online. Anyone can read its stories for free through Google or a news-aggregation site like Digg, but people who want the full newspaper experience pay $103 a year for the privilege. More than a million subscribers consider that a good deal. This isn't an anomaly, either. According to a recent study by the private-equity firm Veronis Suhler Stevenson, consumers now spend more time reading or watching media they've paid for than free media.'

- Farhad Manjoo, 'Why Charging Just a Little Can Be Smarter Than Charging Nothing at All'.

Comments

nikhil said…
as seth godin said marketer spends on ads to buy our attention i.e a chance to interrupt us.
so whatever online intellectual services are free we are paying for it by giving a chance to marketer to impress us.

i don't think wall street charging fees is a right move.
and suggestion given to Google to charge fees is a good idea at all.
nikhil said…
though wall street gets one million user, it means that their product gives benefit whose value is equivalent to =$103+attention price.
which is better than their competitor.
similarly, customer who are paying for cable tv = subscription fee + attention price.
they think it is reasonable.

bottle water is amusing example. there is no way you can place your ads on it.so you have to pay for it.
nikhil said…
free media has attention price about which customer think that its value is not more than their valuable attention.

customer may even think that if he is giving so much in free what a great value it will give if i pay for its more services.
nikhil said…
the price i am paying in the form of my attention and my valuable comments :) is nothing as compared to your knowledge.

because i think it is better than even Philip kotler(marketing managment) book.
Prem said…
Dear Sir,
I have a query on a diff topic here, we have heard of strategic portfolio management, but is it same as Innovation portfolio management? How do big companies deal with ideas and innovations that rule the roost among the customers wen its introduced in the market? For eg companies like GE, Apple, Seimens, Nokia, would have millions of ideas tht come out of their system but how do they select the right one n manage it?
Regards
Prem
KrishnaSagar said…
Interesting examples are cited here. The WSJ (Wall Street)case is worth analyzing in depth. Bottled water is a good marketing move as there is a huge need for potable drinking water, (especially in India) with the city municipal corporations unable to cater to the demand of providing clean drinking water.
Of course, many unscrupulous brands have mushroomed which tap the normal water and bottle it!

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