Give stuff away, offer value, make money

Two articles today got me thinking about giving stuff away to make money.

First a survey on the Independent shows that on average people who admit to illegally downloading music actually spend more on music than those who claim that they never down music dishonestly. I totally buy this. People who download music illegally are probably tasting more music and making more purchasing decisions on music than those who don’t.

The music industry needs to give more of it’s content away to get users to fall in love with music and buy more. The music industry should be looking at other areas where they can make money (spotify and the like premium accounts, tours, merchandise etc). A witch hunt on illegal downloads is only going to hurt the industry by penalising some of the biggest spenders.

I just ponied up for a Spotify premium membership, Spotify is a solid alternative to illegal downloads and getting it on the go and here in Switzerland is worth the cost. But I wouldn’t have done it if I hadn’t experienced it for free and really loved the product. Which I do. So spending the money was a no-brainer. The music industry needs to do more things like Spotify.

Second, a blog post from Bill Gurley, a partner at Benchmark, discussing Google’s mobile OS and its new navigation system as a less than free model. This gives platform manufacturers a slice of the search ad revenue that Google will make in order to get market share.

Google is on the other side of the spectrum from the music industry. Here Google is saying, “here’s something that is charging the user right now, let’s open it up, offer it for free and make money on other, premium, or distributed services”, brilliant. During a downturn, Google’s working hard to get market share by offering value for free where others are currently offering less value at a high cost. That’s pretty ingenious if you ask me.

Give stuff away to the end user, but make sure that you’re offering some other services/products with a clear value to somebody in order to make sure you’re building a sustainable business.