Comments on: Free vs Freely Distributed http://blogmaverick.com/2009/06/30/free-vs-freely-distributed/ the mark cuban weblog Sat, 21 Nov 2009 19:04:09 +0000 http://wordpress.com/ hourly 1 By: Is Free a Strategy? » Razor Branding Blog http://blogmaverick.com/2009/06/30/free-vs-freely-distributed/#comment-66346 Is Free a Strategy? » Razor Branding Blog Thu, 27 Aug 2009 19:19:46 +0000 http://blogmaverick.com/?p=1321#comment-66346 [...] Mark Cuban has weighed into the discussion and thinks there is a big difference between “Free vs Freely Distributed”. [...] [...] Mark Cuban has weighed into the discussion and thinks there is a big difference between “Free vs Freely Distributed”. [...]

]]> By: Freemium Blog - Why is the debate about ‘Free’ important ? — Freemium Blog http://blogmaverick.com/2009/06/30/free-vs-freely-distributed/#comment-66243 Freemium Blog - Why is the debate about ‘Free’ important ? — Freemium Blog Mon, 24 Aug 2009 20:25:39 +0000 http://blogmaverick.com/?p=1321#comment-66243 [...] in his review of ‘Free’ in the New Yorker. This elicited response from Seth Godin followed by Mark Cobin, Chris Anderson, Chris Borgan and Mike [...] [...] in his review of ‘Free’ in the New Yorker. This elicited response from Seth Godin followed by Mark Cobin, Chris Anderson, Chris Borgan and Mike [...]

]]> By: Free - A New Model for Publishing | Randall Bennington http://blogmaverick.com/2009/06/30/free-vs-freely-distributed/#comment-66098 Free - A New Model for Publishing | Randall Bennington Tue, 18 Aug 2009 16:39:34 +0000 http://blogmaverick.com/?p=1321#comment-66098 [...] shelf-space and reproduction costs approach zero. Unfortunately, this misses a key distinction, marginal cost approach zero, but the fixed costs of discovery are as real today as they ever were. And those costs are not being met in the current digital environment. More [...] [...] shelf-space and reproduction costs approach zero. Unfortunately, this misses a key distinction, marginal cost approach zero, but the fixed costs of discovery are as real today as they ever were. And those costs are not being met in the current digital environment. More [...]

]]> By: To Free or not to Free - Social Networks http://blogmaverick.com/2009/06/30/free-vs-freely-distributed/#comment-65958 To Free or not to Free - Social Networks Tue, 11 Aug 2009 22:56:23 +0000 http://blogmaverick.com/?p=1321#comment-65958 [...] and later offer them some ads or some products to buy. Many bloggers are saying this same thing: Mark Cuban, Jason Falls, Chris Brogan and Malcolm Gladwell. Nevertheless, this philosophical debate does not [...] [...] and later offer them some ads or some products to buy. Many bloggers are saying this same thing: Mark Cuban, Jason Falls, Chris Brogan and Malcolm Gladwell. Nevertheless, this philosophical debate does not [...]

]]> By: Get Free for Free | Event Manager Blog http://blogmaverick.com/2009/06/30/free-vs-freely-distributed/#comment-65853 Get Free for Free | Event Manager Blog Thu, 06 Aug 2009 15:41:25 +0000 http://blogmaverick.com/?p=1321#comment-65853 [...] in WIRED Magazine that  jumpstart this debate. Powerful thought leaders like Chris Brogan, Mark Cuban, Seth Godin, Malcolm Gladwell, Mitch Joel, Valeria Maltoni,  and David Meerman Scott along with [...] [...] in WIRED Magazine that  jumpstart this debate. Powerful thought leaders like Chris Brogan, Mark Cuban, Seth Godin, Malcolm Gladwell, Mitch Joel, Valeria Maltoni,  and David Meerman Scott along with [...]

]]> By: comradity http://blogmaverick.com/2009/06/30/free-vs-freely-distributed/#comment-65817 comradity Tue, 04 Aug 2009 14:04:21 +0000 http://blogmaverick.com/?p=1321#comment-65817 Remarkably missing from the FREE debate are some facts. 1) The freemium concept - giving away something first and then asking for money is NOT the way most of the money has been and is made in the media/entertainment industry: Historically, Cohn left the rag business (where he struggled to collect receivables) to start Columbia Pictures BECAUSE he observed people paying for a movie ticket IN ADVANCE, with no returns if not satisfied. This model still works: you pay your cable bill in advance and the cable segment is the healthies in revs and profits in the industry today. 2) Music, the entertainment segment which is the "poster child" for the "freemium" concept - by "sampling" on free radio first to sell recordings and tickets to concerts - is the entertainment segment struggling the most in this marketplace. 4) The highest direct-from-consumer profits and revenue growth are in the sports industry, where the audience pays to not just watch but to PARTICIPATE (tickets, merchandise to represent team loyalty, fantasy league games, etc.) 5) Historically, the distributor was the link in the value chain with the closest proximity to the consumer and "owned" the marketing role. The distributor paid for the content in the advance, taking the risk that they could sell access to the consumer. It is based on this historical market structure that Cuban bases his conclusion that distribution is paid. BUT, while distributors pay a premium for "known" high value content, they aren't willing to take this risk on anything else. So this structure benefits the established content brands, and keeps out the new players. 6) When the established content brands realize they can make a lot more money selling directly to their audience and are confident they can market effectively in this highly competitive marketplace, Cuban's charge-for-distribution model will not be where the money is made. Here's how the established content brands will leverage the "freemium" tactic, successfully: In marketing history, sampling is optimal when: the product's is significantly superior to anything on the market and this superiority is observable in an "appetizer" portion, so that by sampling, intent to purchase and pay a premium vs. the competition increases. (In any other scenario, giving away product or services for free is perceived by consumers as an act of desperation and lowers the perceived value of the product or service. Case in point: newspapers one once paid for are now available for free online and our value perception has dropped) Capitalizing on the value of PARTICIPATION demonstrated by sports entertainment brands, established media companies will produce a quality interactive experience and will learn to market directly to consumers premium priced entertainment experiences. Advertisers interested in tapping both the entertainment brand's marketing know-how and relationship with their audience will pay a premium to participate in these entertainment brands and enjoy an opportunity sell directly to consumers too. Remarkably missing from the FREE debate are some facts.
1) The freemium concept – giving away something first and then asking for money is NOT the way most of the money has been and is made in the media/entertainment industry: Historically, Cohn left the rag business (where he struggled to collect receivables) to start Columbia Pictures BECAUSE he observed people paying for a movie ticket IN ADVANCE, with no returns if not satisfied. This model still works: you pay your cable bill in advance and the cable segment is the healthies in revs and profits in the industry today.
2) Music, the entertainment segment which is the “poster child” for the “freemium” concept – by “sampling” on free radio first to sell recordings and tickets to concerts – is the entertainment segment struggling the most in this marketplace.
4) The highest direct-from-consumer profits and revenue growth are in the sports industry, where the audience pays to not just watch but to PARTICIPATE (tickets, merchandise to represent team loyalty, fantasy league games, etc.)
5) Historically, the distributor was the link in the value chain with the closest proximity to the consumer and “owned” the marketing role. The distributor paid for the content in the advance, taking the risk that they could sell access to the consumer. It is based on this historical market structure that Cuban bases his conclusion that distribution is paid. BUT, while distributors pay a premium for “known” high value content, they aren’t willing to take this risk on anything else. So this structure benefits the established content brands, and keeps out the new players.
6) When the established content brands realize they can make a lot more money selling directly to their audience and are confident they can market effectively in this highly competitive marketplace, Cuban’s charge-for-distribution model will not be where the money is made.

Here’s how the established content brands will leverage the “freemium” tactic, successfully:

In marketing history, sampling is optimal when: the product’s is significantly superior to anything on the market and this superiority is observable in an “appetizer” portion, so that by sampling, intent to purchase and pay a premium vs. the competition increases.

(In any other scenario, giving away product or services for free is perceived by consumers as an act of desperation and lowers the perceived value of the product or service. Case in point: newspapers one once paid for are now available for free online and our value perception has dropped)

Capitalizing on the value of PARTICIPATION demonstrated by sports entertainment brands, established media companies will produce a quality interactive experience and will learn to market directly to consumers premium priced entertainment experiences. Advertisers interested in tapping both the entertainment brand’s marketing know-how and relationship with their audience will pay a premium to participate in these entertainment brands and enjoy an opportunity sell directly to consumers too.

]]> By: Free is Not Really Free: The Attention Currency | Online Siesta - Online Marketing, Digital Advertising, Website Monetizing, In Text Advertising http://blogmaverick.com/2009/06/30/free-vs-freely-distributed/#comment-65805 Free is Not Really Free: The Attention Currency | Online Siesta - Online Marketing, Digital Advertising, Website Monetizing, In Text Advertising Sun, 02 Aug 2009 11:26:45 +0000 http://blogmaverick.com/?p=1321#comment-65805 [...] payment. And the more FREE will spread as a business model – or distribution model (see this nice post) – the general understanding of the attention price that comes with a free offer will [...] [...] payment. And the more FREE will spread as a business model – or distribution model (see this nice post) – the general understanding of the attention price that comes with a free offer will [...]

]]> By: Hunch Free | Measurement-Driven Marketing http://blogmaverick.com/2009/06/30/free-vs-freely-distributed/#comment-65794 Hunch Free | Measurement-Driven Marketing Wed, 29 Jul 2009 14:22:28 +0000 http://blogmaverick.com/?p=1321#comment-65794 [...] becomes quite something. In a group of articles on blogmaverick.com, Mark Cuban points out that: a) If you’re going to give your content away, you have to at least control how and where that [...] [...] becomes quite something. In a group of articles on blogmaverick.com, Mark Cuban points out that: a) If you’re going to give your content away, you have to at least control how and where that [...]

]]> By: Free and DRM Free might destroy the book industry « Kindle Review – Kindle 2 Review, Books http://blogmaverick.com/2009/06/30/free-vs-freely-distributed/#comment-65753 Free and DRM Free might destroy the book industry « Kindle Review – Kindle 2 Review, Books Fri, 24 Jul 2009 01:51:42 +0000 http://blogmaverick.com/?p=1321#comment-65753 [...] Even the companies that are wildly successful using Free (Google) or on the verge of grand success (Facebook) are using Free as a strategy. They are actually charging their Actual customers i.e. advertisers. Mark Cuban pointed out the distinction and he has a great post on Free Vs Freely Distributed. [...] [...] Even the companies that are wildly successful using Free (Google) or on the verge of grand success (Facebook) are using Free as a strategy. They are actually charging their Actual customers i.e. advertisers. Mark Cuban pointed out the distinction and he has a great post on Free Vs Freely Distributed. [...]

]]> By: Kevin Kelly weighs in on Free « 800 CEO Read Blog http://blogmaverick.com/2009/06/30/free-vs-freely-distributed/#comment-65748 Kevin Kelly weighs in on Free « 800 CEO Read Blog Wed, 22 Jul 2009 21:16:04 +0000 http://blogmaverick.com/?p=1321#comment-65748 [...] Webber | Tim Sanders | Mark Cuban | Chris Brogan | Anil [...] [...] Webber | Tim Sanders | Mark Cuban | Chris Brogan | Anil [...]

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