Over the weekend I was thinking about how much we expect to get for free online. When I started out online everything was free. At least to the end user it was. That was the boon of the academic internet. Now some 20+ years later we still want it all for free.
I’m sure at some level we know that nothing is for free. Servers, bandwidth, utilities, people, these all cost money. I don’t think any one of us would say to a friend who is working for a Web 2.0 site that they don’t deserve to get paid, but isn’t that what we’re saying when we resist paying for online services?
Rafe Needleman posted that nothing seems to be changing on the services side of things suggesting that free or freemium are disappearing any time soon:
This will be interesting, since many of the most popular Web 2.0 services are free. Going into the conference this year one might well expect to hear murmurs that the era of freebie software or Web apps is nearing its end. After all, if companies now have to actually make money, they’re not going to do it by continuing to give their product away.
Or are they?
If you look at the model, you’ll find that the free software and free Web service concept is actually a great, and in many cases necessary, part of the business model for Web apps, and even more so for software. Freebie apps and services are the best form of marketing a company can do. The question for the companies giving things away is not, why are you doing this? But rather, what’s the next step? How do you move users down the path from being a freeloader to being a paid user? And, importantly, how are you tracking your progress and adapting to it? Source: Web freeloaders can breathe easy at Web 2.0 Summit | Webware : Cool Web apps for everyone – CNET
So where are we now? We know that ad revenues are tanking and those have been the life blood of free services online, how will the shortfall be made up?
I think it’s going to be a few things changing. First I see companies finding better and slicker ways to make money online. Partnership deals, better ads, more interesting ads. Second I think the freemium model will continue, but we’re going to start getting much more for our money.
I know people don’t think freemium works, but having paid for things like Flickr Pro I know that when I need more and the price is right, I’ll pay.
Is that enough though?