Free is Temporary, the Internet is Forever

Everyone loves free stuff, right? Coupons, buy-one-get-one-free, it comes in many forms. The Internet has been the great purvayor of “free” since its origins. Open-source contributions built what we know and love today. YouTube allows one to stream trillions of hours of content for no charge. WordPress offers free accounts to construct personal websites and blogs, a la the one you’re reading at the moment (no, we didn’t get a kick back for this).

In fact, because “free” is the standard, it takes a rather immaculate product to get consumers to open their digital check books. For $8/month, Netflix presents mountains of high-quality TV shows and movies, and even its own original programming.

Part of what helped the streaming service succeed was its early adoption paywall. A paywall, for those who are unfamiliar, is essentially a barrier to content. By paying a monthly fee you have unlimited access to all of Netflix’s offerings. Another industry radically affected by the Internet has had a different experience with paywalls.

Print journalism publications started to move online in the 2000s, and now some live exclusively on the web. In order to maintain readership, many migrating publications offered their content for free. With the advent of the tablet, a few periodicals like The Wall Street Journal created apps that included paywalls. Those publications who did not, found it difficult to later convince readers to pay for something that had been “on the house.”

People won’t pay for content they’ve been getting for free, unless the hooks are in sooooo deep that they can’t resist. That’s what makes trends like Google’s colonization of the web browser a little unsettling. Pay-per-click ad revenue made the search engine a juggernaut, but with the use of data outpacing the supply, will services like Google Drive and Gmail continue to be free forever? Will we be able to resist if they aren’t?

This may sound a little conspiracy theory-esque. Let me say that the free products we have on the Internet are incredible. It wouldn’t be that outrageous to pay for them, but the consumer-surplus-aphile part of me winces at the notion of getting hit monthly for the Google suite, a domain name, and all of my social media accounts.

Once your model is subscription-based, the only ways to increase revenue (short of instituting advertisements) are to add more subscribers or to charge more for the service. More users means more bandwidth and an inevitable log jam. I’ll hold back the net neutrality and artists’ rights discussions for now. But imagine if Netflix bumped it’s monthly charge by $1. Would a statistically significant number of people drop the service based on principle? It’s still a fraction of the cost of cable. Could the act be considered manipulative? Evil? What if the cost increased by $1/month every 18 months. My instinct is that we’re junkies and we’d keep getting our fix.

I don’t have my tin foil hat on yet, but it seems poignant to echo the economists and remind everyone, “There’s no such thing as a free (or impossibly consumer-friendly) lunch.”