Better than Free

Rich Tehrani : Communications and Technology Blog - Tehrani.com
Rich Tehrani
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Better than Free

In the world of VoIP, there is a serious problem... There are so many companies giving away telephony, how do you compete? Vonage sells service which is ridiculously cheap yet Skype gives their service away even cheaper and in some cases free.

In such a world, the companies in the space need to evaluate how they can add value to their service and products so that people will actually open their wallets and shell out their hard-earned cash.

For those vendors looking to monetize what many think is unmonetizable, you should check out this post by Kevin Kelley which focuses on ways to generate revenue in a world where everything seems to be going free.

Here is an excerpt:

Personalization — A generic version of a concert recording may be free, but if you want a copy that has been tweaked to sound perfect in your particular living room — as if it were preformed in your room — you may be willing to pay a lot. The free copy of a book can be custom edited by the publishers to reflect your own previous reading background. A free movie you buy may be cut to reflect the rating you desire (no violence, dirty language okay). Aspirin is free, but aspirin tailored to your DNA is very expensive. As many have noted, personalization requires an ongoing conversation between the creator and consumer, artist and fan, producer and user. It is deeply generative because it is iterative and time consuming. You can't copy the personalization that a relationship represents. Marketers call that "stickiness" because it means both sides of the relationship are stuck (invested) in this generative asset, and will be reluctant to switch and start over.

Interpretation — As the old joke goes: software, free. The manual, $10,000. But it's no joke. A couple of high profile companies, like Red Hat, Apache, and others make their living doing exactly that. They provide paid support for free software. The copy of code, being mere bits, is free — and becomes valuable to you only through the support and guidance. I suspect a lot of genetic information will go this route. Right now getting your copy of your DNA is very expensive, but soon it won't be. In fact, soon pharmaceutical companies will PAY you to get your genes sequence. So the copy of your sequence will be free, but the interpretation of what it means, what you can do about it, and how to use it — the manual for your genes so to speak — will be expensive.



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