Why the “Wait, everything isn’t free?” economy is a problem

On Tuesday, my friend Derek tweeted something that spurred my brain onto a topic that I’ve struggled with for quite some time. Namely, the expectation that so many of the things we read, watch or do should just be free, for some reason or another. Or no reason.


In this case, he’s referring to Nintendo’s “Super Mario Run,” which become a top-grossing game on iOS devices shortly after its launch two weeks ago. It has since suffered significantly after the $9.99 cost to keep playing after a handful of levels was apparently higher than expectations of its players, and its ratings in the App Store have taken a major hit because of this.

That isn’t to say that $9.99 was the right price for this game, but it speaks to people’s interests in paying for goods and services. A game that was downloaded an estimated 40 million times in four days seemed like like a statistically significant example, don’t you think?

To the media!

While the actual numbers vary from survey to survey, a mid-2016 survey by eMarketer showed that roughly 25% of U.S. users deployed some sort of ad blocking software on their devices. Their estimates on the year-over-year growth of ad blocker usage are staggering, too. Are people blocking ads simply because they don’t like them? Sure, some probably are. In other cases, people are doing so because some ads have become seriously intrusive, others because they have concerns about malware. The reasons for ad blocking are myriad.

Personally, I keep an ad blocker on my computer for when I visit websites that are running dozens and dozens (and dozens) of trackers, and the ads running on the page actually slow my machine down. That shouldn’t happen, no matter how old your computer is. Generally speaking, I leave the ad blocker off unless I’m visiting an unfamiliar site because the outlet has to make money somehow.

So why do people do it? This answer on Quora to the question “Why are people willing to pay $4 for a bag of chips but not $1 for an app?” nails it in its conclusion: “Cloud apps and mobile apps came at a time when people thought information goods should be free and thus, we have anchors at $0.”

Think about that for a second and realize what it means. Boiling it down, anyone involved with the growth (guilty as charged) of the digital economy and its apps, news, games, storage, video, etc. basically shot our future selves in the feet because of the expectations created by giving away just about anything for free, or having “freemium” models.

That’s not to say that the decision to go that route was wrong, but it had such a lasting effect on downloaders, customers, users, what have you, that it became rote, and cracking that code will probably be a challenge for the foreseeable future.

So what?

Over of the last 10-11 years, I’ve worked with dozens and dozens (and dozens) of startups, and have tried to stay in tune with their “mood,” as it has been helpful in knowing what was going on behind the scenes with their investors and advisors. You could absolutely tell when the marketplace was turning one way or another by asking some pretty simple questions. As I am putting together this blog post I caught this story, “Silicon Valley sobers up,” which includes quotes like “They had only known a world where another fund-raise was just around the corner” from Evernote CEO Chris O’Neill. That’s gotta tell you something. All of these things are related, even if only indirectly.

We’ve been surviving on the gravy train that has been continually refilled by angel investors and A- and B- (and C-) rounds of funding. Contrary to popular belief, the dining car on that train does close from time to time, even though it seems like it might be 24/7/365.

Let’s leave the talk about censorship, cyberbullying and free speech aside for a second, and realize that we live in a world where the average person would likely walk away from Facebook, Twitter and other services in a second were they asked to pay a nominal monthly fee to use them. Those same people abandoned daily newspapers that cost less than a cup of coffee because they saw the opportunity to read “the same news” online for free (with ads that they subsequently blocked), so why wouldn’t they simply move on to the next new digital watercooler where they could talk with their friends and family? Don’t think so? It’s happened before, simply because Facebook built a better mousetrap.

These are companies that a decent portion of our economy is built on. The amount of money brands spend to engage, market and sell on these platforms is staggering. Those dollars weren’t spent blindly, they have a revenue number against them. Hell, the effect of Facebook stock tanking would create ripples across that marketplace of investors putting their eggs into other startups’ baskets, compounding the whole thing. But somehow, we all chug along just expecting our news feed or tweets to be there in the morning, not even blinking an eye on how these services fund themselves, or intentionally hindering them from doing so. It’s just not sustainable.

Beyond that, let’s talk about how these attitudes affect the broader media landscape. Irrelevant of where you stand on the political aisle, it’d be silly to not think that the rise of so-called “fake news” and the shrinking (or downright demise) of thousands and thousands of media outlets due to lost revenues aren’t related. That isn’t at all to say that “fake news” hasn’t blossomed because of people’s (shrinking) attention spans and the ease of digital publishing, but it has certainly taken more of a hold than it might have given previous levels of journalism in the world, in my estimation.

<shrug>

This isn’t meant to be a lecture, I’m simply trying to take 1,000 (okay, 1,013 as of now) words to point out that while we’re all enjoying the run-up to 2017 that we need to bear some responsibility for the future of the digital economy we all know and love. That doesn’t mean you have to run out and purchase a newspaper subscription or make some in-app purchases, however. I just think it would be smart for all of us to consider how all these things “fit together” and recognize that while “information wants to be free,” the tools, websites, apps and platforms we use every day aren’t just magically running out there. They’re curated, coded, hosted, shared, designed and so forth.

Let’s try and make sure we can “have nice things” in the future, K?