Making money by giving stuff away

One of my new favourite authors is Cory Doctorow. His book Little Brother was the first I read on my Kindle and caught my eye because it was available under a Creative Commons License.

I’m working my way through the rest of the books Cory has written but one thing I look forward to with every book is the section right at the start where he explains exactly why he gives his e-books away for free. They all give the same message but each book puts a slightly different spin on it and I think it’s fascinating.

Part of Cory’s reasoning is that giving digital books away for free helps him in other ways, including more print sales.

This is really at odds with how many entertainment industries are struggling to figure out a way to make money online. No doubt you know all about DRM and the restrictions that come with that whether it’s a music file, a movie, a video game or even an e-book!

Changing a business model from something you physically own, where you have to pay for each instance you obtain versus a digital file from which you can spawn a copy in an instant and give it to any number of friends and family at no extra cost is certainly not easy, but at the moment all DRM seems to do is make it harder for the customer.

This is why I find the sections in Cory’s books so fascinating because as he points out he’s exploring these new business models himself so that he’ll still be around when the big digital shift happens.

By this I mean that at some point there is going to be a tipping point where DRM will either be everywhere or nowhere. People will either embrace it or get so sick of it that they’ll stop buying content that is DRM enabled. As an example many of the online music stores will sell you a DRM free music file, for a premium of course. Why did this come about in the place? Surely it’s because the market demanded it, otherwise why change the status quo?

If we get to this point and publishers use DRM less and or even abandon DRM altogether there are going to be some interesting business models out there and people who are clinging to their old models may not make it out the other end.

The entertainment industry is pretty unique in some respects. Many other market sectors have embraced the idea of Freemium. With this you get a product or service for free and can then pay a premium for extra features. Spotify is a great example of this. Free music, streamed on-demand with the occasional advert thrown in. Simple and easy. If you’re willing to pay though they’ll remove the adverts, up the bit rate for higher quality and they’ll even let you use the service on your mobile phone!

But how does

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Andy Parkes is Technical Director at Coventry based IT support company IBIT Solutions. Formerly, coordinator of AMITPRO and Microsoft Partner Area Lead for 2012-2013. He also isn't a fan of describing himself in the third person.

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