Is Free the next Killer Business Model?

When you use Skype to place a call to your mother on the other side of the earth or across the street it is free. There are no costs for you, not at least upfront. When you sign up for a 18month mobile phone plan you get the phone for free. When you search the entire web for information, pictures or news you don't pay a dime.



These services are just a couple of examples of services that are free for you to use. They all have in common that they somehow are touching digital and thus the price goes towards zero, becoming Free for the end user. Of course this is not the whole truth. Someone or something is paying for the lunch. Usually this is advertising. It could also be part of a bundle where you buy one thing and the rest for free. It can also be someone else who is picking up the tab to reward you for loyalty.


Will this be the future killer business model? Everything becomes Free. That is kind of contradictory, how can gratis be a business model?



The UK based MVNO operator Blyk have already proven that being Free is successful. Now Blyk is not entirely Free. They have a great combination of stringent segmentation, good service level, compelling advertisers and additional services that have a cost.


Which billing systems or application platforms for that matter allow charging based on ads instead of per use? If I am an application vendor then I would like to be able to hook into Google AdWords to generate the ads for this specific user and then relate the provided service to a specific entry in Google's invoice. Can I please get this Now?


Done correctly, providing services for free will greatly increase the availability of telco type of services since there is always a way of getting paid. It will enable The Long Tail of applications to be affordable for a much larger group of people and thus drive adoption. Today a lot of people do not dare using services since they don't trust the way they are charged. Thus it greatly limits the number and types of services brought to market. Introducing Free as a concept paid for through other usages will enable a vast number of new applications and services and thus Free is the next Killer Business Model!