Whether you think FREE* is wrong or right for your industry it will effect the structure of your business model. No matter who you are or what you do — you will either play in the FREE* marketplace or you will be absorbed by those who do.
How will you survive? Is there a third payer model in your future?
Can FREE* be limited to entry level product? Will folks willingly pay for something that reduces the cost of FREE*?
Will FREE* reduce costs and give you a profit bonanza?
You may be looking at FREE* with horror. For years it was marketers’ favorite word and a salesman’s dream. FREE* meant motivation, meant future customers, meant volume.
Now FREE* has become just another hyper-competitive market that you have to react to. Is your FREE* product going to be as good as their FREE* product? If all products are FREE* why will they pick me? The entertainment industry has long dealt with this issue. Movies and Broadcast cut the cost of distributing entertainment the same way the internet has today. Back then vaudeville and other live entertainment (including back porch sing-alongs) were wiped out or consolidated. Now Newspaper and CD’s are feeling the crunch. Companies howl. Salaries crash. Consolidation and cost cutting rule. A balance will be reached. There may even be more live performance as a result of the transition, but FREE* is wiping out layers and changing the mix.
If you make widgets and think you’re in the clear because you can’t digitize the ‘real’ world, hang on. The increased power of digital processing and transmission will change your business. If we’re lucky (and the Star Trek crowd has its way ) your product may end up being digitally transmitted.(I’m not being that abstract – the PDF is transporter technology for the printing industry.) But in lieu of that – it is very likely that your product is at risk of being digitally replaced by fundamental shifts in consumer habits.
How many Lego blocks does a child need when they prefer the virtual space in their computer game. It’s no accident that Lego has created digital design and programming tools to tie the virtual back to the material world. How can your product have feet in both worlds?
Doctors visits? At home monitoring tools are becoming commonplace. As medical databases improve will a visit really be necessary to monitor health at all? How many prescriptions are currently given with a glance at your history, temp, weight and BP check? How long before I’m wearing my monitors and a free check of a CC medical database flags things that need attention or calls the ambulance directly? What gets paid for in that equation? Does my insurance company simply require the technology to reduce their costs?
Can your weight loss program compete with a community of like minded souls that connect minute-by-minute through Twitter? (OMG – I’m ordering a Big Mac! Somebody stop me! Send the salad squad!)
You don’t believe everything can be FREE*? You’re right. Sooner or later somebody pays someone for something. Value is a two way street. But RELATIONSHIPS will be won and lost on the FREE* battleground. That is where decisions will be made. That is where consumers will evaluate the value of you and your product. If you are not playing in that space, then you, your company, and your industry will be absorbed by somebody who is.
