I actually agree that some things, maybe even more things, should be free. But not as a marketing ploy. And this system seems to go against our capitalist ideals of competition.
The most common of the economies built around free is the three-party system. Here a third party pays to participate in a market created by a free exchange between the first two parties.
There are dozens of ways that media companies make money around free content, from selling information about consumers to brand licensing, "value-added" subscriptions, and direct ecommerce
subscription model of media and is one of the most common Web business models.
Isn't it just the free sample model found everywhere from perfume counters to street corners?
the manufacturer gives away only a tiny quantity
A typical online site follows the 1 Percent Rule — 1 percent of users support all the rest.
Yahoo's pay-per-pageview banners, Google's pay-per-click text ads, Amazon's pay-per-transaction "affiliate ads," and site sponsorships were just the start.
These days one witty Tweet, one clever blog post, one devastating video - forwarded to hundreds of friends at the click of a mouse - can snowball and kill a product or damage a company's share price.
It's a dramatic shift in consumer power. But what if companies could harness this power and turn it to their advantage?
At the most basic, these tools measure the volume of social media chatter. Researchers at Hewlett Packard showed that they can accurately predict a Hollywood movie's box office takings by counting how often it is mentioned on Twitter before it opens.
One European clothing company, popular with inner city youth in the United States, admits privately that its social media team is baffled by its customers' ever changing slang, and even the online Urban Dictionary provides little help.
Social media is quickly becoming a customer relationship management system, as companies have "for the first time access to people's minds in real-time," says Jorn Lyseggen. The tools on offer provide companies with dashboards that show trends, hot topics, the reach of brands, customer mood and how competitors are doing.
Social media may be all the buzz, but in reality "only a few firms get it [and use it], it's of peripheral interest for most", says Tom Austin at technology consultancy Gartner. Few realise that using social media has become much more than customer service and reputation management.
many social media tools are poorly integrated into the corporate workflow
But there are dangers. Financial Times columnist Lucy Kellaway warns that the obsession with social networking can make management lose focus.
To survive the world of social media, companies have to throw away their old marketing playbook.
"don't push... and don't pretend you are hip"
"Once companies have worked out that they should do something with social media, they usually don't know how to do it,"
"If you want to influence the people who influence your customers, that's a very powerful game, but it's also very dangerous if you get it wrong."
it's not about how many friends or followers somebody has, but whether they make an impact.
When Virgin America recently launched new routes from California to Toronto, it used Klout to identify a small group of social media "influencers" and gave them free flights. This generated thousands of tweets, triggered press coverage and delivered more immediate impact than traditional advertising.
"Consumers are spending their attention on social media," he says, but firms don't know how to repay them properly. "There's no manual for that yet."
Social media are dynamic, and today's Twitter may be tomorrow's forgotten website. "Don't assume that what works today will work tomorrow," says Tom Austin at Gartner. "Your model has to be continually adapted."