Free versus Pay
Reflections on free, freemium, and for-pay
Everything on the Internet was free in the early days, from music and movies to news and blogs. The only thing that did cost money was the Internet connection, and of course the hardware; a computer, and a modem.
“Information wants to be free.” – Stewart Brand
I used to download movies for free via NeoDirect and store them in my personal folder on the company server. One day one of the TechOps guys, who was also a good friend, swung by my cubicle and let me officially know that when they upgraded the server farm they discovered that I had stored 100 times more data than anyone else in the company.
Oups, I thought. He then continued telling me that I had until the end of week to clear out my folder. He left with a wink and a smile. He knew what I had been up to but was gracious enough to give me a heads up. It took me a few days to transfer all the data onto a personal external hard drive to save the movies I hadn’t yet watched and not getting fired. I paid for his beers at the pub that Friday.
The free Internet made it possible for anyone to start anything. Jeff Bezos got his bookstore going, Mark Cuban developed Broadcast, and Elon Musk launched PayPal.
But then something happened: the concept of freemium was born. At Yahoo! we launched our first premium service in 1999: mail storage and pop access. People flipped out. Charging on the Internet, for other than physical goods, was a sacrilege.
The idea was simple: the sales funnel. Light users gets everything for free while the heavy users paid. The conversion rate was around 2-3% and with a few hundred millions users it quickly became a whole lotta of money.
Enter the social networks. They figured out that if they got people to share more about themselves to find and connect with their friends they could sell that information to advertisers. Free was no longer just a small sample, it was the heroin.
But there is no such thing as a free lunch. When people quoted Stewart Brand in the early days the forgot the second part of his now famous quote:
“Information also wants to be expensive.” – Stewart Brand
Free on the Internet these days is a gateway drug. Once hooked, we forget why we are wasting our time on stuff that doesn’t add value. If it has a value it’s worth paying for. Making the user the product that is being sold in shady virtual alley deals is not cool.
These days I’m very suspicious of everything free online and prefer to pay for services to avoid advertising and that my data is being sold to who knows whom.
The founders of Substack, Chris Best and Hamish McKenzie, wrote a great blog post last month on the subject: “The internet needs better rules, not stricter referees”.
“The real problem is at the foundation: a business model that sells people’s attention to advertisers, which motivates companies to reward the content that most effectively manipulates people’s emotions. That in turn, because of the platforms’ scale and dominance, has knock-on effects for all of media, culture, and politics. The only path to a healthier internet is to build a new foundation, with a model that gives power back to people.”
The problem is not selling people’s attention to advertisers. That has been done for the past 150 years. The problem is rewarding the content that most effectively manipulates people’s emotions. There are numerous reliable reports showing how companies and nations have manipulated people to their own benefit.
Their solution is to give people the power to choose what they pay attention to, thus the Substack business model. While I wholeheartedly agree with this, I believe that power is not given but taken. One of the fundamentals of Fewer Better Things is to take control over how we spend our time, money, and attention.
My philosophy is: what’s worth paying for pay well, and ignore anything that doesn’t deliver lasting utility, wellbeing, or joy. Fewer better things really pays off in both the short and the long term. Therefore, while I’m signed up for Facebook, mainly to stay connected with friends as we lack alternatives, I never use the service, except for the occasional message on their Messenger.
I think we in general overestimate information and underestimate wisdom and therefore get overloaded with crap and underserved with value. We are still in the “being broadcasted to” mode when we should be in the “research, think for ourselves and create mode”.
We are no longer helplessly sitting at the end of a television, being fed the selected truth and eating up everything that is being broadcasted 24/7. No, we are free-thinking and intelligent people that have the most powerful tools that the world have ever seen to our disposal to search and find what really matters to make a difference.
That was one of many reasons why I did the digital cleanup earlier this fall. I wanted to get rid of the parasites that are sucking my personal data dry and selling it to the highest bidder. I’m not interested in being traded like a baseball card, I rather pay for what matters and leave the insignificant rest to history’s garbage dumpsters.
If you value your time, money, and attention, I recommend that you do the same. But most importantly, understand how the game is played and your role in it. Pay well for what matters, for brands and services that is moving humanity forward. Support initiatives that protects our planet and people, and use technology intelligently to serve humankind and create the lifestyle your heart and mind desires.
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For a better world,