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The “free or pay”

May 2002

disponibile anche in italiano

  Giancarlo Livraghi
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Humpty Dumpty made a great fall – and now several people seem to think that they can fix the problem by trying to charge a price for the bits and pieces. They don’t understand that they should simply count their losses (or their unfair gains – if they have been paid for bad advice, poor management or questionable strategies and tools) and get out of the way. They can’t put Humpty together again. What we need is some fresh thinking, as well as a better understanding of what the net is and how it works.

Is it easy to make a decent income using the internet? Not as easy as many imagined or preached. But not more difficult than in any other sort of enterprise. Then why are there so many failures and disappointments? Because too many people are looking for profit in the wrong places or in the wrong way. Common sense, as it applies to any business or any human enterprise, seems to be forgotten in the case of the internet (as well as in several areas of telecommunications and information technology).

One of the most ridiculous fads is the meaningless statement that “there can no longer be a free internet”. It’s been rampant for a year or two, it’s being repeated with arrogant complacency. Mostly by the people who caused misguided investments – and, in their effort to shake off the blame for the resulting losses and failures, are busy trying to do more of the same.

What do they mean by “free” internet? That’s very fudgy. Because they don’t know what they are talking about – or because they are deliberately confusing the issue. Unless the basic concept is made clear all of the discussions on this subject can only result in more mistakes and more failures (or in more short-term profiteering that may make money for a few, and for a short time, while warping the market as a whole).

Of course free in English has different meanings – and even in other languages there is some confusion. That’s a serious problem because by “the end of the free internet” several people mean (though they seldom admit it openly) “the end of internet freedom”. It may be appropriate to discuss that separately. For the sake of this article, let’s stay with the money issue: must we pay for everything on the internet or should it be “for free”? Even so, it isn’t clear.

Depending on how we define the concept, we can say that the internet has never been free of cost – or we can say that it is free and that it must, and will, continue to be.

If we understand that “cost” doesn’t necessarily mean “money”, it’s pretty obvious that hardly anything is ever totally “free”. Even things that don’t have a price tag rarely fall into our laps (unless they are worthless or undesirable, or have “strings attached”). They require commitment and dedication – time, effort and active involvement.

For thirty years the structure of the internet has been open, with free access by anyone who can have a connection and can afford the tools. But services need to be provided. To be online one must “give” something – technical and human resources, content and values. In any case, it takes time and active involvement. Even those things that aren’t paid for in money aren’t “for free”.

From this point of view there has never been any “free internet” and it’s unlikely that three will ever be. So we could just stop here and forget the whole issue.

But if cost means money and price tags... it’s pretty clear that the basic nature of the internet is free. It’s based on free interchange. We don’t pay for the most valuable things: dialogue, information, interactivity, human relationships. That’s the way the net was born, in that way it’s continuing to grow – and there is no reason why it should change its nature. There is no indication that it could turn into something where people must “pay for everything”. In that unlikely case it wouldn’t be the internet, but something else (probably a shabby and inefficient imitation of some mainstream media) and we would be left with two alternatives. To mourn on its grave or to resuscitate it in some other way.

Is that going to happen? I don’t think so. Daily experience confirms that (in spite of the overload and the junk) the “free” internet is growing and improving all the time – while on the “commercial” side (with a few pleasant exceptions) things are going from bad to worse.

The lifeblood of the net is people who want to exchange ideas, opinions, information – as well as emotion and feelings. Any attempt to choke the freedom of human exchange and replace it with a money-based system isn’t just wrong and unfair. Its inherently stupid.

The “charge for everything” crusade is likely to fail. And even if it had a partial victory most of its supporters would be defeated. The sticky traps where they hope to grab dollars or euros would be wiped out, or swallowed, by a few monstrous worldwide concentrations. While it’s pretty obvious that in all fields (including traditional media and business) there is a strong need for things to move in the opposite direction – and for more freedom and open competition.

There is a loud and silly crowd climbing up Humpty’s wall. Let them be – and let’s do our best to stay away from the fallout. There are other, and much more promising, ways to make money. Let’s see how.

First of all, we must get rid of a myth. Too many people (and companies) believe that money must be made inside the internet for the investment to be worthwhile. That’s true only in a few cases (enterprises selling primarily internet services – if they have something really valuable to sell). For the vast majority of companies the source of income and profit if somewhere outside the net. The internet is not a source of income per se, but can be a tool to add value to all sorts of goods and services. Not only, or necessarily, in the sales department. Think of logistics, distribution, service, assistance, customer care...

Cutting costs can be one of the benefits, but in most cases that is not the first priority. Think first of quality and service – some effective improvement in the income-cost ratio is likely to follow.

Don’t make promises you can’t keep, don’t invest money up front before you know where you are going. Start with something small and manageable, grow gradually, experiment along the way, learn at every step. Make what is appropriate freely and easily accessible (but don’t burden yourself and you customers with content that isn’t specifically relevant).

Make the path easy, clear and comfortable to get to whatever it is that people may want to buy – but don’t try to force them to the sales counter, to cross their path or to divert their attention, while they are browsing or looking for information. Gain their confidence by providing free and easy access to as much information as you can – and by caring for relationships and service.

In this way there is little to lose (if something doesn’t work it’s easy to get out – as long as it’s tested in practice before it gets too big). And there is a lot to be gained. Including lessons that one can learn in the internet and apply more widely somewhere else.

Elementary? Not quite. It’s more easily said than done. It takes patience and commitment. But it’s worth the effort. The starting point is to dump the bad strategies (including the “charge for everything” syndrome) and dig common sense out of whatever old cupboard in which it’s buried under a pile of waste and nonsense. Above all, always remember that the net isn’t machines, networks, connections, devices or glitch. It’s people.


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