February 5, 2009

Many people have asked me this: “What happens if everything becomes free?”
The answer is simple.


And it is not just a gloomy prediction for some ill-managed businesses. For many business areas it is inevitable. If your product or service is web-based, on the long run your only possible strategy is freemium. And if you’re running on freemium, on the long run you will end up in Freewars.

One of the first business areas to enter Freewars is music business. Every new band has to give all their music away for free. Competition is so fierce, that no newcomer can charce for his work.

Characteristics of Freewar:

  1. You have to constantly develop new free features.
  2. You have to make previously chargeable features free.
  3. You have to give more and more control to your customers.
  4. You have to spend more time and money on marketing your free product.
  5. New competitors with more developed free features appear constantly.
  6. Making any revanue becomes impossible.

One Response to “Freewars”

  1. Tommi F. Says:

    Great post! I’ll be making a follow-up to it on my blog in the next few days for sure as “Freewars” is rapidly bumping itself to the #1 music pro-am killer over the reigning champ, piracy.

    But I’ll write more about this during the weekend.

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