A recent survey from Ipsos Mori of 1,000 16- to 50-year-olds in the UK with internet access found that people who download music illegally on average spend twice the amount on money on music as people who always pay. (Hat tip: Mashable.)
Internet marketers like Yaro Starak and Brian Clark give away tons of free content to promote their premium content. They have entire systems and processes for how to launch information products, and all you have to do to participate is hand over your email address.
David Meerman Scott claims that his free EBook helped him get 500 blog mentions and sell 30,000 books in 6 months. His philosophy is a one-up on internet marketers – don’t even require the email address. Let free be truly free and reach up to 50x as many people. Stop trying to measure your conversion rates like a marketer would, and just assume that the more you give the more you sell.
Chris Anderson has written a whole book to explain this phenomenon of “free,” entitled Free. He writes about how free music drives more sales of premium versions of the music (live concerts) and how free recipe cards once drove more sales of Jell-O.
Free content sells. It sells premium content, physical products, and valuable services. There are numerous case studies to prove it. And while some companies don’t want to believe it’s true, I think most people, even business owners, are really starting to get it.
Lately, I’ve been thinking about what’s next. What do we do with the idea of “free?” How can businesses work within “free”conomics? No matter who you are, here’s where you should be looking:
Can you accept “free?”
You’ve heard of grocery stores making zero profits on certain items, just to get foot traffic to their stores, right? These items are called loss leaders. And content is the ultimate loss leader – you trade time and expertise for nothing.
Sure, it sucks. If you are Britney Spears, you are making less money than before because you aren’t selling as many CDs.
But seriously, just get over it. The economics of many industries are changing. Accept that you need new loss leaders.
In your industry, what is the “free” content and what is the “premium” content?
Business magazines are in the spotlight right now trying to figure out just that.
Every industry has a premium, even if you sell physical goods. For example, in the fashion industry, the free content is the designs. Anyone can copy your designs – the premium is in the brand, the quality of craftsmanship, and the pleasure of having “the real thing.” Likewise, anyone can copy your technology, but Apple doesn’t seem to be hurting these days.
How do you monetize “free?”
Nobody does something for nothing. Even if you are writing a free blog with no ads, you are trading for something – relationships, an ego-boost, personal development… Are you monetizing “free” the way you want to be?
How should you monetize “free?”
Maybe you aren’t doing it optimally. One of my friends told me about an internship program he runs – “free” intern work traded for ample mentoring time. I asked him, “Is your time worth the same as their time? Could you be selling your time in the form of premium content to pay for the time they work for you?” In these cases, I like Sarah Evans take on bartering for business. There was a reason money was invented, after all.
What do you think of “free?” How does it affect your industry? How will you harness the concept to improve your business?