Finding good reasons to spend money on free goods

Digitization of goods now requires that we only indirectly monetize those goods through proprietary services that run on top of open-source software.

I was listening to MGMT's "Kids" today on iTunes, and by the end of the song I found that I had shelled out roughly $6 for a few more songs by Arcade Fire, Sonic Youth, Band of Horses, and MGMT.

All of those songs are available for $0.00 on LimeWire, which I have installed on my computer, but which I haven't used in at least a year. I haven't needed to. Everything I want to buy is a click away and, better yet, as happened Monday, Apple keeps helping me find more things to buy with its brilliant Genius service.

It used to be that I'd download music without paying. I didn't want to steal the songs--I simply didn't want to have to go to a CD store to buy the songs that I knew I could be listening to right now. Making customers wait unnecessarily doesn't pay, as The Guardian recently pointed out.

Dave Kusek points to a number of reasons consumers happily pay for otherwise free products: authenticity and immediacy are two.

Software, music, movies, and other digital goods each require new business models, models that assume free transfer of bits and charge for other services that are not easily replicated.

For instance, in open-source software, Red Hat's business model depends upon certification of a closed, Red Hat Enterprise Linux binary, but doubly so on its Red Hat Network that delivers patches and other updates to the software.

Somewhat similarly, Google's depends upon value-added services (search, news, etc.) that aren't related to the underlying open-source software at all.

Free (as in liberty) software has become secondary, in other words, to the generally non-free (as in liberty) services that run on top of it. Tim O'Reilly was right: we truly are in the land of Open Sources 2.0 or, if you will, the post-open source world.


Follow me on Twitter @mjasay.

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