Why is everything free?


Have you noticed how man how many new apps that have appeared of late are available free of charge?


Web 2.0 services like gada.be or flickr or del.icio.us. And more conventional client apps like Firefox?  The list is approximately infinite. They come and go at an amazing rate. And they are all free.


Not only are they free, users seem to expect them to be free. I am not sure how this came to be...


Is it a unintended consequence of the open source philosophy? Is it a incorrect reframing of the fact that major and well known services like google and yahoo are (apparently) free (although ad supported?)


Whatever the reason, I worry about the chilling effect this can have on innovation in our industry.


How many great new innovations have died on the vine because there was just no way for the creators to pay the rent while building the Next Big Thing? Even after a year, two years of development, the prospects for getting users to somehow compensate for the value delivered were small to none.


Is there another explanation?


What if this was a pure supply-demand invisible hand phenomenon? What if the platforms on which these systems are built (Apache, Tomcat, PHP, MYSql, Java, and so on) have become so rich and so powerful that it has become comparatively very cheap to build wonderful innovative systems like Furl, Rollyo or Reddit, and therefore the market was valuing them correctly at zero dollars. (My friend Shimon Rura put forth a case along those lines the other day. )


While there's an element of truth in this second explanation, I believe it is only a small part of the story. I continue to believe that this tendency to expect stuff to be free has had a chilling effect on innovation in our industry.




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Posted on December 21, 2005 and filed under Politics, Technology.