The Economy of Free Is Stupid - Social Media Explorer
The Economy of Free Is Stupid
The Economy of Free Is Stupid
by
Jason Falls
Jason Falls

There’s a lot I love about the Web 2.0 culture. Open source platforms and the abundance of free tools and technologies available to us all are chief among them. But there is also a fair amount of insanity in those approaches that I fear is creeping up on us.

The inspiration for this post was a conversation I had with a friend the other day who said, “I love my DVR. I haven’t watched a commercial in months.” When I asked him how long he expects to still be watching his favorite shows, he looked puzzled.

“The avoidance of those commercials means those shows will eventually be cancelled,” I said. “You’re killing your own chances of being able to watch them by watching just them.”

To be blunt, those that think they’ve been getting their television for free all these years are short-sighted, if not ignorant. Your admission charge has been watching the commercials. The advertisers pay the production costs and salaries of those involved in the programs. If they don’t get a return on their investment in the programs, they don’t sponsor them, the shows get cancelled and you get pissed.

Any Jericho fans out there? Thanks for TiVo-ing it.

Out of BusinessWhile social media has emerged largely because most people grew sick of thousands of marketing messages each day. They turned to emerging online technologies that enabled connections with like-minded folks for recommendations and discussions around buying decisions, hobbies and more. The ensuing culture produced a library of free services and platforms. Don’t buy it. You can find something similar online for free. Today, online users are almost offended if they have to pay for a service.

With all due respect, Mr. Anderson, the Economy of Free culture we’ve created is, in a word, stupid.

If a tool is free, then you’re likely paying for it by having to view advertisements which support its costs. Unless, of course, you’re talking about Twitter, whose business model is perhaps the only thing on the planet more elusive than Osama Bin Laden.

Venture capitalists are running all around the world looking for the next platform or tool they think Google will pay too much money for, dumping millions of dollars into businesses no more sound than Wild Stallions. (Bonus points if you get the reference.)

What we’ve created is a marketplace that isn’t sustainable. For every FriendFeed, there are half a dozen Profilactics that were much better, but didn’t have a direct connection to some Silicon Valley big shot. Anyone who invested in the also rans lost money. While I’m not one to predict all the good ideas have been had, the disproportionate amount of money that is being poured into technology startups these days makes me shudder to think what the entrepreneurs will do when the investors come calling wanting their money back.

If you’re not selling to Google, Yahoo or Microsoft within 18 months, you’re probably toast.

Then there’s the general open source movement. I love open source software but relying upon the masses for its security and sustainability scares the bejeezus out of me. I use WordPress for a lot of online publishing. What happens if Mullenweg and company decide to go open a bar or something? What happens if a meteor hits Austin during South by Southwest?

Yes, I’ll be secure knowing LifestreamBackup.com has my back. (Gratuitous plug for my new venture, but meant as lighthearted fun, not, “Buy This!” Sorry.) But can we really count on the platforms and technologies we use? Sure, the longevity of a paid content management solution is no more predictable, but when I think of “the community” of the world, “trust” isn’t something that immediately jumps in my head.

All this Web 2.0 culture shift has created a disturbing attitude in most of us toward advertising as well. We DVR our favorite shows and skip the ads. We get pissed off when we go watch something on Hulu and have to sit through a 15-second car commercial. Hulu’s tag line is, “Watch Your Favorites. Anytime. For Free.”

But Hulu isn’t free. Watching the ad is the price of admission. If you don’t watch it, Hulu will either charge you a subscription fee or not let you watch your shows.

This is why advertising is not dead and why we need to wake up and smell the rich, pure aroma of our Folgers Coffee. The Economy of Free will only last so long.

Better save your money.

Is open source sustainable? Are venture capitalists leading the world in dumb moves right now? Can television shows survive without advertising? If so, will enough people pay to watch what they want to sustain entertainment as we know it?

A penny for your thoughts!

IMAGE: By Lou Oates on ShutterStock.com. Used with permission.

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About the Author

Jason Falls
Jason Falls is the founder of Social Media Explorer and one of the most notable and outspoken voices in the social media marketing industry. He is a noted marketing keynote speaker, author of two books and unapologetic bourbon aficionado. He can also be found at JasonFalls.com.

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