Tuesday, 24 February 2009

Will 'free' be the end web 2.0 ?

I wrote a while back that people in general still expect the same services as they used to get, but now they expect more of it, quicker and for free.

As one who used to try and sell 'free' can testify: it wasn't easy. Yet everyone now wants free?! You can now give it away. People no longer ask what is the catch?

1000watt posts about a recent article which discussed the collapse of all things web 2.0 and asked whether this culture of providing services and products for free would lead to web 2.0 companies imploding and much of the web disappearing overnight.

During tough economic times, one will and should look at what has been created and ask, ‘ought we not be making money from these products/services’.

The property software game is guilty of this and with too many players chasing too few clients, many companies are giving away their products for 'free'. This is a mix of too much supply and the web 2.0 concept of providing something for nothing (for want of a better phrase). Google et al can get away with this. Twitter, the darling of the moment is getting away with it, but for how long? Indeed, how long can property software companies give away their product? Do they really hope that in 6 months, 12 months, they can start charging for it? Will advertising spend continue downwards? Extend this principle to portals and one has to wonder whether ‘free’ can last.

Our JRA site is based on this web 2.0 logic of build it and they will come and then worry about the revenue later. Indeed, we are proud of it and did not build it for profit, but as it gets more popular (and it is!) there will come a time to monetize it. Why? Not to make a profit, but to cover the increasing costs of running it. We already have google ads appearing, but these do not cover the costs at the moment so it is unlikely we can rely upon advertising in the future. Active Rain have started to consider monetising their site and why not?! They obviously have a number of people maintaining the site and advertising alone cannot support such a site.

Perhaps we are going full circle and users will now pay for premium services once again? There is talk of users regaining ‘white space’ or basically logging off. I do not deny there are times when I ask whether my life should be spent with a laptop and a blackberry for all my waking hours (and sleeping come to that) and I long to throw them into the sea - I have honestly concocted a plan to do this – but users such as me and others looking for white space are older and may be fed up with the Internet. The younger generation are the ones demanding free and when they come to buy a house they may well ask why they should pay to find the house, why should they pay an agent, in fact why should they pay for a house in the first place?!

And free always benefits the consumer doesn't it? Well, I doubt free is the backbone of competition but it certainly improves the customers position as it ultimately drives down prices. Perhaps the catch (and there is always a catch) with ‘free’ is that the company selling free may not be around to support you in years to come.

1 comment:

brightmove.co.uk said...

A free website offering a service which the public are willing and keen to use will generate traffic. That website then has a captive audience and as such, a value. The free websites are usually run by low cost enterprises often for just the love of it. I am quite an old fossil and clearly remember the days of Free Radio. Pirate radio stations providing a much loved service at no cost. "Wonderful Radio London" and Radio Caroline were excellent examples! The revenue was generated by advertisers who wanted to benefit from the "captive audience". If you charge for something that is not unique and could be provided free then you are going to restrict the number of willing subscribers.