Free Business Models
This page is about free as in free price. Thesis: the free copy-ability of data necessitates different business models, where the primary commodity, data, is given away for free.
"The internet is a copy machine. At its most foundational level, it copies every action, every character, every thought we make while we ride upon it. In order to send a message from one corner of the internet to another, the protocols of communication demand that the whole message be copied along the way several times. IT companies make a lot of money selling equipment that facilitates this ceaseless copying. Every bit of data ever produced on any computer is copied somewhere. The digital economy is thus run on a river of copies. Unlike the mass-produced reproductions of the machine age, these copies are not just cheap, they are free.
Our digital communication network has been engineered so that copies flow with as little friction as possible. Indeed, copies flow so freely we could think of the internet as a super-distribution system, where once a copy is introduced it will continue to flow through the network forever, much like electricity in a superconductive wire. We see evidence of this in real life. Once anything that can be copied is brought into contact with internet, it will be copied, and those copies never leave. Even a dog knows you can't erase something once it's flowed on the internet.
This super-distribution system has become the foundation of our economy and wealth. The instant reduplication of data, ideas, and media underpins all the major economic sectors in our economy, particularly those involved with exports -- that is, those industries where the US has a competitive advantage. Our wealth sits upon a very large device that copies promiscuously and constantly.
Yet the previous round of wealth in this economy was built on selling precious copies, so the free flow of free copies tends to undermine the established order. If reproductions of our best efforts are free, how can we keep going? To put it simply, how does one make money selling free copies?" (http://www.kk.org/thetechnium/archives/2008/01/better_than_fre.php)
- When copies are super abundant, they become worthless.
- When copies are super abundant, stuff which can't be copied becomes scarce and valuable.
- When copies are free, you need to sell things which can not be copied.