Posts Tagged 'Free Payment'

The Case for Free Payment

the-case-for-free-payment

First of all, I want to insist on what Free Payment is not. Free Payment is not about charity, kindness or generosity.

For the consumer of Free, it is first and foremost a selfish business act. The consumer pays to secure his future happiness. Because he loves the product and he is wise enough to understand that he needs to contribute if he wants the producer to make more for him to enjoy.

For the producer of Free, accepting free payments is not panhandling. Free payments are deserved remunerations for the producer’s work, even more merited since the consumer freely chooses to pay. It is a sign of approval and an encouragement to pursue.

A free payment is a business transaction. It is a transaction based on love, passion, wit, and above all, freeness, but a business transaction nonetheless.

This being said, I want to elaborate on the staggering advantages of a Free Payment culture for consumers, producers and societies.

For the consumer of Free:

  • The consumer is free to choose which producer to pay, and which not to pay, whatever his reasons are. And in all cases, he can still enjoy the content or the service freely.
  • The consumer chooses to pay only for what he values from the maker. He can choose to pay for a copy, a performance, a service, for a future product or for the overall work of the producer.
  • The consumer is free to choose how much to pay. He can pay a suggested price, according to market value or according to his own perceived value. He is free to take into account his own capacity to pay.  For any reason he might have, he can choose to pay less, or more, with no need for justification.
  • The consumer is free to pay any time he wants. He is free to pay now, later or never. He can choose for example to postpone payment until he can afford it, or spread out payments in time.
  • The consumer can choose to pay for his own reasons. Because he loves the product or because he respects the maker. It may be a way to congratulate or to encourage him, or because he feels the producer’s work is important for him, for the community or for the world.
  • Through a community, the consumer gains the power of life and death over the destiny of the producer of Free. With Free Payment, he acquires the ultimate tool to exert its power and influence over its economic space. It opens up endless opportunities for consumers willing to get involved into the producer’s business.
  • The consumer will gain an almost unlimited choice of contents and services. Because Free Payment greatly contributes to a profitable Long Tail economy, the consumer will benefit from unparalleled market diversity.

For the producer of Free:

  • Free Payment is by far the easiest and cheapest business model to implement on the Internet. It allows for a very low market entry cost. A producer can post his writing on a blog, his video on YouTube, his picture on Flickr, his music wherever, and get payment from PayPal. Minimum up front investment required. Minimum overhead.
  • Free Payment gives the producer the opportunity to eliminate middlemen from his business process. Since Free Payment allows for a direct link with consumers, it enables the producer to optimize its cost structure and provide the lowest cost content and service to his community.
  • The Producer is free to make his work available under copyleft licenses, and thus fully embraces the Free Culture ethos. With Free Payment, the producer of Free does not need to care about copyright infringement, DRM or other legal and technological protection for his work.
  • Free Payment allows for a much more leveled field of opportunities for all types of businesses and products, even the more specialized one. With the enormous Internet market, a producer can hope for decent revenues even if his product is located far out in the niche end of the Long Tail.
  • The producer gains the resources of a committed community of True Fans. A community of people who care enough to freely contribute to his work. Properly nourished and fostered, such community of dedicated fans can provide real value in ensuring the producer’s business growth and prosperity.

For the society:

  • Free Payment is an opportunity to eliminate valueless activities from business processes. Since Free Payment favors direct transactions between producers and consumers, it can greatly contribute in optimizing supply chains for digital goods and services.  This means a more efficient economy, less resources consumption and lower environmental cost. Free Payment together with the Free Culture is an environmentally sound economical model.
  • Free Payment can contribute to a better distribution of wealth. Because people are less likely to pay someone perceived as “rich enough”, it will enable consumers to reroute their consumption budget toward more marginal producers. Free Payment is an opportunity to have fewer millionaires but more people able to get a decent living from their work.
  • Free Payment business model can greatly contribute to fight poverty and help developing countries. Because of its very low market entry cost, it offers more equal opportunities to a much greater part of the world population.

Finally, for the rebel minded people, it is a way to short-circuit an economic system often seen as unfair and inefficient, a system mostly at the hand of an overpaid privileged corporate elite. To use Saul William words, it’s a way of check-mating capitalism.

Surely, this economic system is based on integrity and wisdom. These qualities must be common enough through the Internet community for Free Payment to be a successful model. I strongly believe they are. The best proof is that there is already a thriving Free Culture out there. Wikipedia, Linux, Firefox, they are all very successful products of this ethos. And Free Payment is already playing an important and growing role in this culture, almost unnoticed. Call it donation, patronage or sponsoring, it’s the same fundamental idea. It only needs to be further fostered and promoted.

Free Payment is the key to the realization of a sustainable gift economy of Free in the digital world. It is often said that, in a gift economy, people are judged less on what they own and more on what they give. This is quite an exciting and promising new paradigm to explore for our societies.

Pierre M.

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