May 9, 2011

We’ve swung so far over to the “information wants to be free” thinking that I believe it’s presenting a challenge for businesses and content consumers and the Web in general.

My take is that information wants to be worth paying for, and below are five reasons why free is hurting us all.

1. No accountability

People have become so used to signing up for things with no cost that it’s created an environment of no accountability. Show-up rates for solid free events hover around 25 percent to 30 percent.

This isn’t a reflection on the quality of the content; it’s a symptom of a much greater problem. With no commitment there is no accountability–and that includes a commitment to continued learning.

2. Eroded value

When content is consistently given away it loses its value–not only for the producer, but also in the eyes of the content consumer. How good can something that’s free really be?

This lumps thoroughly researched, well-presented, useful content in with shoddily veiled pitch fests.

3. Lowered expectations

When there is no commitment, there is little to lose. I think this creates an atmosphere where content producers can simply slap something together with little value because, “What are they going to do, ask for a refund?”

Of course, the flip side is true as well–audiences have become pleasantly surprised when they actually get value from time spent reading or viewing.

4. Blocked revenue

One of the best ways to build a business that has marketable value is to develop multiple streams of residual income that a potential business buyer can view as a valuable asset.

When the expectation is that all of your content, speaking and presenting will be made available at no fee, your business’ greatest potential asset is cut off.

5. Community buster

Here’s the ironic thing: When people are invited into a community where everything is free, there’s actually less chance of building a strong community. Community builds when there is value.

When you try to build a community by allowing anyone and everyone to submit free content, you’ll soon discover engagement becomes non-existent.

When community members respect the value of the content enough to pay for it, they are invested in keeping the engagement at the highest level.

As an industry, content producers need to find ways to recapture the value in their content, discover the proper way to package it, build multiple streams of residual income with membership communities and we’ll all be better for it.

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Join the conversation ( 24 )

• Janet DeGeorge 11 months ago

  

  This blog is not free. I paid for my computer and I pay dearly for monthly broadband service on my home computer, my laptop and my mobile phone. While all the newspapers are giving away their content for free, Google, Comcast, Apple, AT&T and the rest are laughing all the way to the bank. When is the newspaper business going to start thinking like the music business and demand royalties for use of their original content! The newspapers have no one to champion this effort.

• Christian Bonawandt 1 year 0 months and 13 days ago

  

  There is so much wrong here I don't know where to start. Content does not want to be free. Content does not want anything. It is just content. CONSUMERS want content to be free---sort of. The truth is SOME content MUST be free, but high-quality, rare/exclusive content should not. If you can't tell whether or not your content deserves to be paid for, you should not be in the content business.In addition, price does not equal value. Content is valuable. However, basic economics of supply and demand (this is Freshman college stuff, people) says that when a supply of something is infinite, the price is zero. Anything that can be reproduced digitally effectively has a price of zero, because it can be duplicated over and over again without cost to anyone. Oh, and a lost sale is not a cost, it's a revenue opportunity---huge difference there. If I went around trying to sell people a handful of oxygen for $0.99 per scoop, you'd tell me I was crazy. Air is valuable, let's be sure. But it's also infinite and abundant. Can't go suing God for making it free for everyone, even though that's a definite lost sales opportunity.Contrary to all this, some content should not be free. Which content? The best content. The real gems that are worth locking away. BUT, you can't lock everything away. You must leave a breadcrumb trail of gradually rising-quality content to lead them there. That's called a content strategy. Heard of it? Nobody should be in the content business without one.As for accountability, if you don't have that, you don't have a business, regardless of what you make. And a lack of accountability is the fault of the creator, not the consumer.

• JAMES SAMUEL 1 year 0 months and 15 days ago

  

  About 15 years ago, I was working on a multi-year project that involved inviting physicians to meetings. The first year, we allowed all physicians to register for free and routinely had an attendance rate of about 20%. The next year, we required physicians to pay a $20 registration fee. The result was that registration numbers dropped by about 50%, but the attendance rate went up to about 80 percent. Bottom line: fewer people registered but more than twice as many showed up.

• Myles Younger 1 year 0 months and 19 days ago

  

  One way to protect the value of free events or content is to make it invitation-only (and by "invitation-only," I don't mean spamming a list of 100,000 random people...I mean doing the hard work to identify and cherry-pick your key customers and players). It benefits your guests/viewers/consumers -- they don't have to commit to making a payment, but at the same time, they can be more assured that they're part of an elite group being offered something out of the ordinary (this is especially valuable in situations where people think there will be networking opportunities...no one wants to network with a bunch of ***). Maintaining an invitation-only barrier also helps the producer of said event/content ensure that the audience is going to be relevant and valuable. And if things go well, you can create a "buzz" of artificial demand by intelligently restricting how many (and what kind of) people get invited. Of course, you've got to have something fairly compelling to offer in order to create any interest in your invitation-only event/content. But...if you can't think of anything compelling to offer, then maybe you need to re-examine your business model or marketing strategy and figure out why people should care about what you're selling.Cheers,Myles YoungerCo-founderwww.cannedbanners.com

• Grace Bosworth 1 year 0 months and 19 days ago

  

  This is one of those issues we can all agree on, "free is hurting us," but we can't change it and we can't really fight it. In my opinion, the best thing to do is to differentiate yourself and your company from the crowd by giving something of value, giving something quality, even if its for free. I may be an eternal optimist but i sincerely believe that great anything will eventually rise above the crowd. People will notice, the right people will notice, the rest probably didn't matter anyway!Grace BosworthPresident, Global2Local LLCwww.globaltolocallanguagesolutions.com

• Jo Macdermott 1 year 0 months and 19 days ago

  

  John, I agree with your comments. There is a space for free content to build trust/credibility/profile as noted @bestcustomshirt. It is also interesting that you are paid to write on this blog, most blogs expect contributions (impartial and researched) for free...Let's think of it this way, would a paid employee ever work for free? (http://www.nextmarketing.com.au/blog/2011/01/should-i-work-for-free/)

• John Counsel 1 year 0 months and 19 days ago

  

  We had this argument at The Profit Clinic in 1991 and decided on a simple pricing model that has worked exceptionally-well for us ever since. It focuses on the difference between VALUE and USEFULNESS.They're not the same thing, at all. An idea has value in its own right. Knowledge has value in its own right. An education has value in its own right. But without the practical insights, skills and other resources that enable that knowledge, idea or insight to be implemented to produce measurable, worthwhile results, it has no real usefulness.People tend to prefer to pay for USEFULNESS.So we give away our knowledge base, including our own intellectual property. It's free. We embrace the notion that "knowledge wants to be free" for the simple reason that knowledge by itself is effectively useless.Our on-line webinars, ebooks, Insight Reports, etc are free. Our off-line seminars carry a simple guarantee: you cannot pay for your own attendance.That's because someone else has already paid for you to attend — and you have no idea who paid! Those who attend have the choice: if they received a tangible benefit from the presentation, they're welcome to pay for someone else to attend — but they decided if and when they'll pay, and how much. (And they cannot nominate attendees. It's 100% voluntary and anonymous.)This strategy always recovers much more than it costs us — and introduces people to our practical implementations: workshops and masterclasses, professional consulting, training and services.Our clients are better-informed, create better ***, are easier to get great results for and are incredibly loyal. And we spend next-to-nothing on promotion. Our buyers become our most productive, profitable sellers.Our pricing policy (feel free to use it) is at http://profitclinic.info/policies/training-pricing-policy/Thanks John — great post as always.John Counsel

• John Jantsch 1 year 0 months and 19 days ago

  

  @Bruce - of course it's ironic that I'm sharing this free information here, but I'm actually paid to write here like any journalist that might have something to say and a reputation of value - and that's the point, it can and is seen as having little value in the eyes of some simply because of where it resides.You could argue that I was suggesting even this forum has flaws when all we are using as a measure of success is page views. In this new social world we live in engagement is often a far greater yardstick, things such as this conversation you and I are having, than money.See, the tough thing about the argument I supporting is it's not really about paid vs. free - It's more about the perception of worth and value that gets blurred when free also becomes free for all.

• Bruce Hudson 1 year 0 months and 19 days ago

  

  There is a great irony here, and that is this article is free. Does that mean it is without value? Or the community it is placed within is somehow weak? "Here’s the ironic thing: When people are invited into a community where everything is free, there’s actually less chance of building a strong community. Community builds when there is value."Someone looking at the numbers might make the conclusion that because something is free, it's less likely to succeed, but actually that's not correct. Just because something is free does not necessarily mean it has less value. The cost of something and it's value are not 'joined at the hip' - value is a critical criteria whereas cost is a sliding scale that when increased, creates resistance. The question "why bother?" will always first be answered with values - cost is always plays second fiddle to value. For any community where there is more value, then it's probability of success increases. And when that value is affordable or even free, then that's when the stage is set for it to flourish.Free and paid for information both have their places - one look at this forum and my bookshelf and you would have to agree. The challenge with 'free' is to offer it in a way that doesn't hurt.

• John Jantsch 1 year 0 months and 19 days ago

  

  @Kelly - that's right think about how many free newsletters we all get that we don't even open - doesn't mean the content is all bad, it just doesn't take any commitment to subscribe - not saying the model is dead, just saying there's room for a better model.

• Kelly Marsh 1 year 0 months and 19 days ago

  

  Agreed,I saw a video by Gary V talking about the return of paid, which I think could happen. Meaning people start paying for quality packaged information instead of trying to just find it for free online. Small fee things like $10 a month to be part of a special e-mail newsletter, instead of constantly not reading new free newsletters since the content usually has a sales pitch and is lower quality.http://kellymarsh.org

• John Jantsch 1 year 0 months and 20 days ago

  

  The problem might actually be free Ed - coupled with the use of it as you state, but the expectation now that an app, for example, that saves you hundreds of minutes a day doing something important for your business should be free or certainly less than $1. That's an environment that is hurting both consumer and producer.To tell you the truth the one being hurt the most is the consumer. I agree completely that price is a function of value and there are those that are certainly mining that, but the chaos of free is actually making it harder to communicate value for those trying to get started.

• Ed Kless 1 year 0 months and 20 days ago

  

  The problem is not free, it is that it is used incorrectly by many businesses. Free is fine if you have something more of value to give afterwards.Also, in all the comments I did not see this point - value DOES NOT come from price. Value precedes price, just as price precedes cost.

• Martha Giffen 1 year 0 months and 20 days ago

  

  People really do believe that free means "lesser or no" value. And, when you are getting lesser or no value, there is no incentive to stick around. People are WANTING to pay for great content. That doesn't mean you can't offer free content as bonuses, gifts, etc. it just means people place value on something if they have some skin in the game (money).

• John Jantsch 1 year 0 months and 20 days ago

  

  Great points Annie - I'm already seeing a move towards content delivery that is custom. Not just pay walls, but merged with true community - that's how content will start to regain its value.Again, this isn't an article suggesting that free as part of the model is a bad thing, it's free as a mindset that I think is the problem.

• Annie Mueller 1 year 0 months and 20 days ago

  

  Great points. As a professional writer, I'm often appalled by the quality of "great content" on the web, and by the expectations of "content producers" who want pro. writers to give them dirt-cheap rates in some sort of orgy of free-for-allness. "You get what you pay for" rings true, in a lot of ways. Conversely, though, I think the "free" model of content-sharing has allowed many small businesses to enter & compete in markets and attract customers in ways that were financially improbable before the Internet and the culture of sharing/content-marketing arose. I think the future will hold a lot more private, subscription-based membership sites as the chaff gets separated from the wheat in terms of content. The last ten years it seems we've all been focused on production, production, production + possibility of free everything. I sense the next ten becoming about separating (again, and in different terms, perhaps) true value from the rest.

• John Jantsch 1 year 0 months and 20 days ago

  

  @Suzanne - I agree it's a fine way to build a list, but the problem is that what you often find is people are building nothing but a list - they aren't building readers, community or customers, they are simply getting people to sign up for this week's load of free stuff - I think we need to be bold enough to aim a little higher for the good of all. Otherwise all we doing is allowing people to spam themselves.

• John Jantsch 1 year 0 months and 20 days ago

  

  @Stephey - Boy I can really get behind your support of the eroded value point - I'm amazed when I go to an art show or even shop on Etsy and find work that is clearly undervalued by both artist and shoppers.

• John Jantsch 1 year 0 months and 20 days ago

  

  @CEO - some readers are taking this to mean never give anything free - my great content producing company gives a ton away as a way to build trust, but what I'm talking about here is the environment that has developed around free content that is dragging the entire industry and the web in general down. Some of the best content available is now available off the web, in apps that both consumer and producer control.The difference with Marketing Sherpa is their approach is very calculated and it works, not as well as it used to, though and that's the point.

• VEERA PAUL 1 year 0 months and 20 days ago

  

  Great content producer companies must give some content for free to attract potential subscribers. http://www.marketingsherpa.com/ is a great example of a successful content company. They got me hooked buying their case studies and marketing reports.http://www.bestcustomshirt.com

• Stephey Baker 1 year 0 months and 20 days ago

  

  This is a great mini article speaking to a larger concern as a whole and that is the worth and value a business owner and ultimately person, expresses in the world. We can only be as successful as our self esteem allows and this is wrapped up in how we not only value ourselves and others but the services we provide as well. I find all points in this article worthy to keep in mind, especially the eroded value point. As a professional Artist creating inspiration, vision, insightful images and content, value and perceived value is huge! If I give away my ideas, isights and vision, I've just eroded my own value and definitely blocked potential income. Thanks for expanding this discussion all ready being pondered by artists in the blogsphere.All My Best,Stephey Bakerhttp://www.markedbythemuse.com

• SUZANNE MUUSERS 1 year 0 months and 20 days ago

  

  It is very true that free tends to have little perceived value, however, there is one main situation where I believe it's important for a business owner to offer something for free: when he/she wants to build their list. A free report written with the target client in mind can be a great way to incentivize prospects to opt-in to a newsletter list. The entrepreneur gets to demonstrate their expertise and the prospect continues to receive the message over time.Here's a great example: http://www.ProsperityCoaching.biz Thanks, Suzanne

• Stephanie Beer 1 year 0 months and 21 days ago

  

  Free hurts us, but so do bargains and deal sites http://stepwise.tumblr.com/post/5248333520/deal-or-no-deal-that-is-the-questionSteph

• Debbie Gilbert [LION] 1 year 0 months and 21 days ago

  

  I so agree with the comments here. The same applies to business networking groups. So many people nowadays really do expect to atttend networking events for free and cant understand why we charge a membership fee! They have no concept of the overheads or work involved to run a professional event.If you do offer free places frequently people do not turn up and leave the bill to be paid to the venue for a wasted place so I avoid free places as it just doesnt work, if people pay for something they do value it more and treat it much more with respect. I also find that when people have paid for a membershop they will take the time and effort to work with other busineess and the people who take their first two visits and dont come get nothing from it as they expect business to be handed to them by the other members when they havent taken the time to get to know them. I think if you have knowledge whch you are sharing by all means share some for free to show your expertise but never undersell yourself and your knowledge and experience.