Sunday, 2 August 2009

FREE - The ultimate money spinner

Free is the new Capitalist mantra, everything it seems, from Airline seats to Laptops computers are now available for all, for free.

Free is a question of when, not if, as corporate bodies wake up to their inability to compete on price and accept that in a competitive market, price falls always ever downwards until it reaches the marginal cost.

When abundance creates new scarcity when a product becomes free, value migrates upwards. Companies don't want customers anymore they want fans. Why sell 1m widgets costing 10p each to make at £1 to 1m customers and make £900,000 profit when you can give 50m widgets away to 50m people and sell on to them or derive from them advertising revenue of at least 50p per person and make mega millions? Or convince just 5% of the 50m to spend more to upgrade their free widget?

The Internet has redefined 'Free' with Google, Facebook, and Twitter (and indeed blogger) all providing free social networking platforms for millions of customers who they can then sell to, and then sell advertising space for. Microsoft now also realise they can't compete against 'free' as they prepare to launch free versions of their "online" software such as Word, Publisher and Excel to the public.

People like 'Free' and once they are hooked they will then pay more for additional add on costs to either a) save time or b) improve their status. In fact 'Free' is often the most expensive product out there.

The airline ticket may be free, but the admin charge, the extra baggage cost, the sell ons (cars and hotel rooms) not to mention the on board monopoly on £3 cups of tea and £5 sandwiches, more than compensate for 'Free'. One of these days the pre flight advice will come with directions as to where to insert your coins for oxygen supply in the case of an emergency! or a life jacket as an additional extra!

Free. also comes in the guise of the "part product" not the whole version but 'upgradable' at a cost, or the 'free trial' or even craftier the 'limited free use' with whopping great bills for anything used above the limit.

So where does it all end? Well, where corporate Britain leads Local Government eventually follows, as so it was that as a County Councillor I was asked last week for my views to possible changes to the Registration Service (Births Marraiges, Deaths) . They want to amalgamate the current district based service making it Countywide and make it more 'customer focused'.

Still a free service of course, but hang on let me read the small print? It says that 'enhanced services' could be provided at a premium? For instance the standard wait for a replacement certificate (which used to be about 5 mins) is now to be 3-5 days! but you can have it while you wait if you pay a premium! Likewise, want to marry in the Registrars Office on a Saturday? Of course Sir/Madam, at a price that is.

So beware, although none of our Council services are ever free (We already pay for them through the Council Tax) 'Free' looks like becoming an ever tempting commodity, with services being tiered and graded and customers broken down into 'can't afford' and 'can pay extra' .

Imagine where it could all lead? "We can only pick up your rubbish for free once a fortnight , but for a premium we could manage once a week?" Or maybe even free education being delivered in schools owned by Multi National Companies who then charge the local community a fortune to use the facilities out of hours? (oh sorry, the Tories already dropped that one on us in Northamptonshire 4 years ago)

Health and Education under Blair's choice agenda is already half way there of course, How much longer will it be before all this new choice in the Health Service and access to quicker services and appointments will come at a premium?

And can every parent really choose which school they want their child to attend unless they can afford the price of a house in the agreed catchment area and the cost of "additionality" for ever exotic school trips and top up tutoring and equipment.

Our society risks becoming even more divided into a nation of 'haves a little for nothing' and 'haves what they want' on receipt of a top up payment

It's becoming less a case of keeping up with the Jones' and more a case of keeping up with the Barrington - Alexanders. (Of course if you are really posh like HMQ then you can have a triple barrelled surname Saxe-Coburg-Gotha, and a top up double barrelled surname Mountbatten -Windsor chucked in for 'Free' to help you sound less German!)

Our councils though, through their data bases have more access to potential top up paying customers than most, if not any of the blue chip companies so beware 'Free' is coming through a letterbox close to you, and when it does don't be surprised if it has a Council return address on the envelope.

This advice is given to you FREE with thanks to Chris Anderson and WIRED for getting my brain warmed up


  1. Tony,

    You always seem to know how to brighten my day and make me smile! Thanks btw.

    The post, as always makes more sense than I care to admit and would have my Dad giving me the "Told You So" look...

    How about next Council meeting I take you, Anne and John for a FREE drink? Thrown in of course shall be FREE conversation (not political unless you wish) and I promise no fear of having to pay for anything in the long run!!!

  2. For once Tony, you and I agree on something. Getting the hook for free to catch the fish is no good without the bait which you have to pay a premium for, especially when you've paid for the rod and line.




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