

Why the Era of Free Stuff Is Ending - tokenadult
http://www.usnews.com/news/blogs/rick-newman/2011/10/04/why-the-era-of-free-stuff-is-ending

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schleyfox
Amazon Prime isn't free shipping (as far as I know >$25 standard shipping is
still a thing). It's a flat rate for unlimited 2 day shipping. Two day
shipping is expensive, but the combination of an annual fee and the increased
likelihood of purchases for subscribers is good for Amazon's bottom line.
Subscribers get faster shipping and pay less as long as they order more than
four or five things a year. It seems like a pretty decent win for both
consumers and Amazon. I imagine Amazon's brick and mortar competitors are
somewhat less amused.

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SoftwareMaven
I order a LOT more through Amazon because of Prime than I would otherwise.
Knowing my buy-to-hold timeframe is only a couple of days and Amazon's price
will be significantly better than other places means Amazon usually gets my
first look on almost everything.

I have no idea if I am a profitable customer or not, though. My guess is that
the profitable customers with Prime purchase very little or a lot. I don't
think I fall in either of those categories (though I might before Christmas is
over :).

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incongruity
Funny - Apple recently announced a major free initiative - iCloud and other
new free initiatives are popping up in other industries - look at what
Stanford and MIT are doing in making some parts of education free.

The one thing that connects all the examples offered (except possibly Amazon)
is that the firms listed are old, entrenched players in industries facing real
challenges to their basic business models. The companies listed are digging in
their heels (and hooks), billing customers rather than driving real
innovation.

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fleitz
The article really jumps around industries and it largely ignores why free can
be better than paid for certain segments of a market, or what type of
economics drive a free model.

I don't think any airlines were seriously considering offering free flights
based on ad revenues, nor are there any plans to offer a paid version of the
Linux kernel source.

Free makes a lot of sense when the product you are delivering is eyeballs, the
world is transitioning towards an abundance of natural resources, and towards
a scarcity of attention. There are certainly exceptions to the trend but the
macro trends are very clear, this is why even with insane oil prices Apple is
a more valuable company than Exxon. Exxon provides resources, Apple provides a
conduit for attention.

Even taking peak oil into account, there is only a certain price to which oil
can go and after which we make a huge investment in another energy source. As
we switched from whale oil to crude oil, we destroyed our whaling fleets and
started building oil derricks.

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suivix
_Movie-rental company Netflix enraged many of its customers with its recent
plan to split its mail-delivery and video-streaming services into two separate
plans, with higher overall charges for those who want both._

Netflix has been planning on doing this for _years_. It has nothing to do with
the economy.

