August 28, 2009

The banality of tech neologisms

One last thing while we're on the topic of tech company business models. The buzzword "freemium" comes up a lot, and it means giving away part of your service or product for free and charging for an enhanced version of it. Imagine if Facebook let you use the Wall feature for free but charged for everything else (pictures, status updates, gay quizzes, etc.). This is supposed to be a new way of thinking, or else it wouldn't need a neologism and lots of buzz to get it going.

In reality, though, it's what newspapers have done forever. If the online version of the paper let you browse through a couple articles per day for free (maybe just the ones expected to be really popular), while charging if you wanted to read most or all of the articles, we'd call that freemium.

But that's just what the business model was before the internet, when there were only print copies. Instead of connecting to the web and visiting the paper's site, you walked (or whatever) to a news stand, bookstore, grocery store, or what have you. You could flip through the paper and read over the headlines and maybe skim through an article or two. But you couldn't just bum around a news stand for an hour or however long while you digested the entire thing. You'd look like a jackass. So, the paper basically let you get away with reading a few articles and teaser headlines for free, while charging if you wanted to read the entire thing.

This also applies to the supposedly new idea of charging the high-frequency users, while letting the low-frequency users get the thing for free. It's really the same as the above. Some people only want to skim through a couple of articles, so you let them browse at the bookstore for free. They're still exposed to all those ads, though. The more hardcore users just buy it and read it in depth (and see the ads too).

I think the only reason many people take this ridiculous tech jargon seriously is that it truly does seem fresh and even revolutionary against the background assumption that you can only give stuff away and run ads; otherwise, your schoolmates might stop freeloading at your house and go hang out at some other sucker's place, and you'd feel like a loser. But these ideas are really nothing new and are just a way for a bunch of "gurus" to bilk some cash out of managers who didn't score high enough on the bullshit detection part of the GMAT. It's good that these ideas are being taken seriously again, but give me a break about how revolutionary and internet-era it is.

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