paid-online-content-not-free

Why Paid Online Content, Not Free, Is Key To Business Growth

You probably don’t realize this, but you’re a small component inside a really large network. And no, I’m not talking about your job. I’m talking about your contribution to the seemingly free internet services. Services like Facebook, Google, YouTube, Instagram, Twitter. The ones everyone is talking about. And while these say that they’ll be free forever for you to benefit from what they have to offer, in reality, you, yourself, are the person contributing to the growth of these organization for free while they are making billions.

I don’t know how many people actually get it, but Facebook, Instagram, Twitter, and the other big network organization wouldn’t exist if people didn’t do the job for them. Basically, these services rely on people with low self-esteem who want to get external validation and boost their ego to post what’s going on in their lives to make money. While you scream of joy when you get a dozen of likes for your new post, the Facebook corporation makes a ton of money out of your sorry ass without giving you a dime.

Personally, I don’t think it’s fair.

While Mark Zuckerberg and company are living their dream life, the majority of the creative citizenship online is hardly making ends meet.

But all that can change with a simple shift in the way we perceive information online. We can fix things by simply making most of the content online to be paid, not free.

The Rise of Free-Flowing Information Online

At first glance, free stuff always seems great. I mean, who dislikes free services? Free eBook for understanding your existence on the planet? Free software to manage your website? Free app to share documents? Sign me up!

At some point, people decided that everything online should be free. I don’t remember a global discussion about this but there was surely some sort of a mutual agreement between the early creators online. But, as you can imagine, just because something is free doesn’t mean that there aren’t costs involved in the production.

For instance, Facebook is free for now, right? Still, you don’t have to be on the board of directors to figure out that there are certain costs involved, right?

While the costs now are way bigger than when it launched, it was still a burden to pay for the hosting fees, the devs writing the code, and for the whole infrastructure that manages millions of photos shared by horny students. Actually, I took a couple of years for Facebook to make some real revenue. And around a decade to finally cover all yearly costs and make good profits. Before that, the site was running out of angel investor money.

So how does Facebook makes money?

You already know: by selling ads to companies. But that’s the easy part to get. In reality, they sell our attention. The calculated revenue per user on Facebook is $4.30, while the cost per person is around $1.00.1

The platform basically acts like a hub that brings people together. And once people are inside, it’s harder for them to escape the maze. That’s why the color red is used for the notifications and that’s why videos auto-play when you scroll. Platforms like Facebook and Google are meant to keep us inside. The more you’re on their turf, the more money they make. Kind of creepy for companies that were supposed to be free, right? Well, that’s why the following saying exists, “If you’re not paying for the product, you are the product.”

But there is more!

In fact, there are three major categories of costs involved when using similar services:

  • Time: Instead of focusing on our work, on our kids, on our business, we spend time scrolling and thinking about what kind of picture we should post next.
  • Privacy: Some even call it Zuckering – named after the infamous Facebook CEO. Zuckering is a tactic that tricks you into sharing information about yourself without thinking it will harm you. Eventually, you end up spending more time on the platform and spending more money because of the personalized ads.
  • Money: Yep. It’s a bit counterintuitive but these seemingly free services cost us money. Why? For two major reasons: First, the time you spent on Facebook can be used for your financial gains – learning a new thing, reading, etc. Secondly, the more you use Facebook, YouTube, Google, etc., the more ads you see. The more ads you see, the more you believe you need to buy stuff you don’t actually need. The more you buy stuff you don’t need… well, you get it from there, the poorer you become.

But Why The Majority of Info Online is Free?

Easy. To attract more people.

The best way to attract more visitors to your website is by giving away free stuff. Since the net is flooded with info, products, offerings, and software that promises a life-changing experience, giving away free samples is the go-to bait and switch technique. For instance, there is a reason people online generously send out free ebooks for exchange of an email address. Once you’re on their list, they can literally spam you about their products till you finally gave in.

But that’s how it is.

Nowadays, it’s almost impossible to function if you don’t offer free things online. Your competitors will crush you and Google will send your website at the bottom of the search results – a wretched place where nothing good happens – if you don’t have free stuff floating around the internet space. And while this is totally cool because: We get to learn a lot of different things; We can explore the world, and beyond, by simply searching online; We can pay our bills; Read about the Renaissance; Call our aunt living in North Dakota white driving around town; Watch a video on what’s hiding in the ocean’s depths; Compare the features of the newest smartphones…Giving away everything for free is a terrible idea.

Why Free Information Online is Bad?

I hate to say it because I too love to grab free stuff floating online, but free information online is bad for a lot of reasons. Here are just a couple:

People Don’t Value Free Stuff

First, let’s observe the psychological reason of why free stuff are not as good as it sounds.

People simply don’t value free stuff. When we get something for free, we don’t care about it, we don’t value it. I’ve seen it numerous times and I’m sure that I’ll see it again and again in the future. And it’s not just me and you, we all do it.

You’ll most likely spend with ease $10,000 if you inherit them but you’ll act quite differently if you’ve earned the same amount of cash with sweat and tears. Or as the author of a couple of best-selling books, Ramit Sethi, writes in one of them, “Look, I want to give you this material. I know it can help you. It’s not about the money, but in my experience, if people don’t pay, they just don’t value it.”2

Besides, by pricing your work you’ll not only exclude people who are careless of what you’re doing, but you also make people value what they paid for and actually take action.

Free Info Promotes More Ads

Since online creators need a way to make money, if they aren’t compensated for their time spent to create, they’ll sell your eyeballs to advertisers. Meaning, they’ll flood their sites will ads you don’t necessarily want to see.

What’s the problem with ads? According to researchers, the more ads you see the more money you’ll spend on things you don’t necessarily need. Additionally, despite the extra cost involved for the seemingly free content you get, your overall experience with the site will be ruined by pop-ups, slides, big buttons and other tricky elements that are designed to persuade you into doing something you don’t really want to do.

While you probably think that you can ignore the nasty ads, that you’re too smart for them, you cannot. Whether we understand it or not, they affect you, consciously or subconsciously.3

Free Content Is The Reason There Are Ever Growing Junkyards of Services and Sites

In order for a website, a software, a service to function, you need at least two things: domain and a hosting provider. Of course, these things cost money. And while the prices for the ones just mentioned aren’t that high compared to the average income per capita, there’s another cost involved that’s much more important: time.

It cost you a hell lot of time to research, write, edit, and later even promote the content you’ve made. Personally, it cost me around 2 full working days (when working 8 hours a day) to produce one article on my site that’s around 2,000 words. And while it might not seem like a lot, try doing it while having a full-time job, wanting to read books, a kid to take care of, and last but not least, take some time to have casual brakes and communicate with other people who exist on this planet.

But one article is nothing in the endless abyss of information these days. You need dozens, which means dozens of hours spent producing content. But when people aren’t compensated for their efforts, quite normally, they quit. It’s a normal human trait – you do something and you expect something in return, if there isn’t any value in what you’re doing, you abandon the task.

Some people might say that they’re doing it just for fun but surely over time, they’ll search for ways to monetize their online project. If they don’t find a way, they’ll surely quit. This results in countless abandon projects.

When Small Publishers Aren’t Compensated, Big Corporations Start to Monopolize the Market

There is a good reason for the government to want to ban monopoly-like organizations in their countries. When a company becomes too big and there aren’t any competitors, it tends to neglect basic government and human laws and starts doing what it wishes.

For instance, Amazon (which is a monopoly if you don’t already know) recently tweaked its search algorithm to uprank more profitable products.4 Why? To make more sales, hence profit. What about the other creators who are contributing to their large organization and helping it stay healthy and make billions? They are just fluff.

Surely you can find anything on Amazon. But Amazon wants you to buy stuff with higher profits for them. That’s why they trick you by showing you the stuff they decide.

This is what happens when individuals are not compensated for their work. When you choose to buy a book from Amazon, for instance, not from the friendly local bookstore. Eventually, small players quite and big corporations become even bigger. That’s why the following saying exists: “The rich get richer and the poor get poorer.”

When Creators Are Not Getting Money Out of their Work, They Spend Time and Resources Contributing to the Monopoly-like Networks

It will take time for your site to rank on Google. But not because your content isn’t any good, it’s because Google – and the other similar services – want to earn more money, get bigger, and eventually create even more things that will earn them even more money. That’s why they heavily advertise their promotional services – Google Ads Sense, Facebook Page promotion, etc.

When creators don’t earn anything from their websites, and before they quite and never return, they spend money on advertising – hoping people will notice and pay attention to what they have to offer. That’s actually normal. You lunch a new product and you promote it.

And while this technique might work, the cost to keep the ads running will only raise, leaving you with little money to actually operate. On top of that, you’ll only help the big boys become bigger.

Why Paid Online Content, Not Free, Is Key To Business Growth?

What made countries richer in the past, and therefore safer, stronger, more generous, more safe, healthier, is nothing else but shopping. The reason we’re now wealthier is thanks to our continuous desire to accumulate more things. Yes. It’s bizarre. While simplicity is considered as the best virtue for the 21st century, the opposite act – going on shopping sprees – was the one that got us out of the countryside and into the big cities, where big bucks lie.

The same should happen if we want to see more creators doing interesting things online. Only by supporting individuals, they can continue doing what they are good at, thus create more meaningful content and inspire others to make a change.

Why?

To explain this, we need to observe a fancy term in economics: A virtuous cycle.

In short, this means that higher wages stimulate consumption, leading to higher prices and larger corporate profits. These things naturally lead to higher employment and healthier societies.

This is actually what happened years ago. When the consumer revolution occurred.

Let’s go back a few centuries…

While before only kings and nobles were worthy, and actually had enough money to buy nice furniture, silverware, shoes, around 1600 and 1750 there was an increase in the consumption and variety of luxury goods and products by individuals from poorer social backgrounds. Reason? Some brands (or at least let’s call them brands) started offering cheaper alternatives to previously expensive products.

What happened after that was marvelous.

People started spending more money on goods they didn’t necessarily need to own. A new chair. A mirror. Finally a spare set of underwear. And though this was quite a stupid financial decision for the individuals who were hardly making ends meet, it was a positive trend that led to the overall financial growth of the society in general.

The more money people spent > The more factories grew > The more wages rose.

And things are quite the same nowadays in terms of physical products. When people buy more things the organization makes more profits and it’s able to expand.

However, things are a bit different online.

As mentioned, people are used to having access to free information. The majority of the population is absolutely OK with spending $100 on a new dress but will fiercely disagree with a website that asks for a couple of dollars in order to download a printable card.

So, what most of the people do?

They complain on Twitter or calm themselves by posting a picture of them wearing the new dress.

It might seem like an innocent I-do-that-every-day kind of thing but in reality, it triggers another cycle that’s quite anti-creative:

the-vicious-cycle-of-facebook
The more you post on Facebook > The more Facebook grows > The more Facebook influences our lives (The more info it steels from us, etc.)

Instead, it can be different.

We can resign from the majority of the free online services and start supporting creative people who we like. This will transform the above vicious cycle into something beneficial for society as a whole:

the-virtuous-cycle-of-independent-business-growth
The more we support independent online content >The more they’ll create and the more money they’ll spend supporting other creatives > The more other people will gain and wages, in general, will rise.

That’s the basic principle of consumerism offline. The same principle can be applied to online content and allow more people to spend time doing what they love – not only the big organizations that are simply trying to capitalize on us.

Some Closing Thoughts

Support the online creators you follow.

After all, the goal of the majority of the sites created online is to help people. But they can only do their job if they receive support from the people already consuming their stuff.

So, if we want a society that is highminded and more mature, we should mitigate the attention we spend on trivial things like how many likes we’ve got on our latest picture and how much should we spend on ads. Instead, we should consider giving more to creators who are trying to educate others. By doing so, we’ll support the middle class and give the so-desired aid independent publishers need, while preventing the big corporations who only care about more profit and market share become bigger and nastier.


Footnotes:

  1. More info about this, here.
  2. This quote is from the book, Your Move: The Underdog’s Guide to Building Your Business. You can read an excerpt of the article, here.
  3. A technique worth reading about is called referencing. You can read more about it, here.
  4. You can read more about this claim in this WSJ article. Note: there is a possibility that you’ll need to pay for this read – these guys know what they’re doing.

Your email address will not be published. Required fields are marked *

Enjoying this?
Get more high-quality content by signing up for my weekly newsletter. No BS, no ads, only helpful content like this.