“Everything is free” is not a business model

Please note that this post is from 2009. Evaluate with care and in light of later events.

Mike Masnick responds to the complaint of some people that providing “free” information, tools, and so on (open source, for example) is not a sustainable business model going forward because “everything is free” cannot work:

No one is suggesting any business model where “everything is free.” Everyone’s been focusing on ways to take some stuff as being free and use it to make other stuff more valuable and worth paying for. And it’s working. So why is Baptiste pretending that people are pushing “everything is free”? It’s because the new business models upset the apple cart for an organization like CISAC, which wants to create a big collective licensing deal (collective licensing is easy, compared to actually giving people a reason to buy).

His real fear isn’t that “everything is free,” because that’s not happening at all. His real fear is that the new business models don’t require groups like CISAC.

via Dear Free Haters: No One Has Said ‘Everything’ Is Free | Techdirt.

This is a typical sort of argument I hear from entrenched business interests who have a model of operation that has worked (music, Hollywood, newspapers) appears threatened. Instead of adapting, these interests attempt to legislate greater legal protection (extending copyright as long as possible, for example) and set up “straw-man” arguments like “everything is free can’t work” to justify these protectionist approaches (generally termed “rent seeking” in economics).

I am sympathetic to some level of protection through copyright for example, but not to protecting a business model simply because it worked before. Innovation requires adapting, and as we’ve seen with GM and Chrysler, a changing world will eventually catch up to your business, and the result isn’t pretty.

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