Giving away the products vs. giving away the store

I’ve been doing a lot of thinking about Chris Anderson’s intriguing book called “Free! The Future of a Radical Price.”  Anderson argues that we are moving toward an economy where the cost of product is getting cheaper and cheaper — and our most valuable commodity, bandwidth, is virtually free.  Google is one of the most profitable companies in the history of the world, yet its primary product is free to users.  Google makes its money by offering ad space to those who are seeking to reach those millions of searchers who use Google every day.

In fact, there are so many products that are free to users that even the thought of charging for them sends ripples through the economy.  Facebook now must proclaim “Free — and always will be” on its home page, and the New York Times made its own headlines recently when, after months of research, finally came to a decision about how to charge for its online services.

Every day, arts lovers can watch movies, listen to audiobooks, and look at art on websites for no cost.  Most museums acknowledge that virtual visitors now outnumber physical ones.  Arts organizations used to think that our competition was other arts organizations, or at least other entertainment options — how can we compete with free?

Here’s how we can compete with free — by adopting the “if you can’t beat ’em, join ’em” philosophy.  But that doesn’t mean giving away the store.  That means taking a lesson from Chris Anderson.

I think these examples from the tech world could be adapted very easily to the arts:

Free, ad-supported content

Google and Facebook are the masters at providing ad-supported content, but everyone is getting into the act now, from mobile apps (put up with ads for the free version, or pay for the privilege of not having to see ads) to Kindle (pay less for a “with special offers” version).

How could arts organizations use this principle?  Certainly those of us with advanced technical capabilities could produce mobile apps or website content that would qualify — but not everyone can do that.  But what about offering constituents the opportunity to come to a performance that had no ads — no program ads, no sponsors, no ads on the back of the tickets — if they agreed to pay a higher price?  Would it work?  I don’t know, but I’d love to see someone try.

Offer basic services for free, and premium services for a price

This practice is common for web applications from Survey Monkey to Polldaddy.  Services at a basic level (under a certain amount of usages or with only basic features) are free.  Businesses who want more functionality or useage pay a tiered fees depending on what they use.

How can arts organizations use this?  What about a free basic membership, that allows visitors basic services such as one or two visits per year, with increasing fees for additional visits, gift shop discounts, or special events?

Free for a limited time

Netflix, Audible and other subscription services commonly offer a free trial for a limited time.  Netflix has a 1 month free trial which automatically converts to a paying subscription if you do nothing.  Audible offers 2 free audiobooks before you start paying.  This is a time-honored method of allowing users to sample the product before purchasing.

Why are we so reluctant to allow free trials, especially since so many of our potential audiences are not yet convinced of the worth of live performances and arts events?

Many not-for-profit arts organizations have traditionally put “free” in the same category as “outreach” — that is, the programs we give away are the programs we consider our mission-based activities, the programs we do for those who need our services but can’t afford it.  What if we turned that philosophy on its ear, and considered using “free” as an audience development technique?

We don’t have to give away the store, but we can use the example of Google, Amazon, Netflix and others as proof that we don’t need to shy away from giving away products in our quest to expose more people to the good work we’re doing. I’m anxious to hear what you have to say about this.  Have you heard of arts organizations that are using the Free Economy?

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About Ellen Rosewall

I am Professor and Chair of Arts Management and author of Arts Management: Uniting Arts and Audiences in the 21st Century (Oxford University Press, 2013). I believe that arts and culture are undergoing a profound change in the 21st century, and I love talking with people about how we continue to bring arts to our communities and individuals give the brave new world of social media, technology and economic changes. Join the conversation!
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