What does Free Mean to you?

July 16, 2009

youtubeThere are many ongoing debates on whether or not the nature of free information on the web can continue to last.  As free content continues to put at risk the traditional media sources that charge their customers to get the information, it also has proven tourblesome for many of the companies that offer the free content.

For example, this story from the New York Times discusses the many issues with Youtube.  As Google continues to try to find big money in advertising dollars for the most popular video sharing site on the web, the cost of storing the infinite amount of videos uploaded to the site everyday is out of control.  It appears that no amount of advertising can possibly make up for the money lost just on server space each year.  Therefore, at this point, Youtube looks like a failing business for Google, and one they will need to evaluate over time.

In addition to Google, there are entire industries that are caught in between free models and paid models.  For example, CNBC recently aired a special on the porn industry, and how they are caught trying to embrace the internet and trying to protect their profits at the same time.  For porn, free videos online have taken a big swipe at profits from paid sites as well as dvd sales, which some say are down close to 30% this year.

Once something is available for free, it decreases the likelihood that anyone would want to pay for it.  Whereas in the past you could say, “you get what you pay for”, nowadays the quality of content and information you can get for free is many times just as good as the stuff that you pay for.  We are approaching a time and a place where Free is costing businesses a fortune.  And eventually, Free may hit a brick wall.

How much is Google willing to lose on Youtube before they charge you to upload videos?  How much is Facebook willing to lose before they charge you to share photos, or to write on someone’s wall?  How much are we all willing to pay to use the sites we love so dearly?

Right now there is no balance between free and pay. The time is coming when we need to find that balance or internet users and businesses alike are in for a major shock.

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