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Comment by hegemonicon | Hacker News Reader

It seems like the big players that give away their content for free (Hulu, youtube, most newspapers, etc) seem to be struggling financially whereas the ones charging for it (netflix, itunes music store, WSJ, economist) seem to be doing well. Perhaps the 'free' business model isn't quite what it's cracked up to be.

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The companies who are charging have spent years developing solid business models that will give people reason to open their wallets.

I think many of the free companies had decent business models when ad revenue was plentiful. Now that the market's crashed, however, they're being forced to go back to the drawing board.

Different types of content with different types and size of audience will demand different types of revenue models. So a free model will not work for everything, an ad model will not work for everything, and a pay model will not work with everything (at least on the internet).

I'd say freemium is the most promising approach so far where those who are willing to pay more pay a lot more to cover the costs incurred by those who aren't willing to pay anything at all, so that those aren't willing to pay anything at all make the service/product more valuable to those who pay more. Whew... Anyways airlines operate sort of like this where First class pays a shitload more than coach. The graduated tax system is another example.

Wait. Youtube's struggling? I thought that report was founded on an oversimplified bandwidth-cost model.

According to RampRate, YouTube is losing $174 Million. Not as bad as losing $470 Million as originally reported by Credit Suisse but still a loss.

Ref: http://digitaldaily.allthingsd.com/20090617/credit-suisse-fa...

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