Freemium or Fearmium and Scare Me? Um...

I invested six hours this week listening to Chris Anderson’s free unabridged reading of “Free – The Future of a Radical Price.” It’s the first complete audio book I’ve listened to in my life, and I greatly enjoyed it. For those of you who think all my blog posts are twice as long as they need to be, you might want to pay for the three hour abridged version, in accordance Anderson’s stated strategy for audio book sales. I thought about summarizing the book in this post, but I don’t want to compete with that abridged version, and besides, you couldn't afford it.

Free is nothing new to me, my publishing career has been based on free from the inception. I started publishing my work online back in 1995, and my first Freemium model was based on giving away the full version of a book as HTML and offering to sell the printed version for less than the cost of an inkjet cartridge. Free is what established my reputation as an expert and brought multiple offers from trade publishers for my work when I went that route in the 90's. I’ve been very active in encouraging unknown authors to publish online to establish themselves, you have nothing to lose but your anonymity.

Having spent six hours in listening to Free, I wanted to do something new I could point to as a direct return on the investment. So I launched a new venture to compliment my website and maybe add one or two readers to the couple hundred thousand a month who already show up for free content. The experimental first step was to publish a collection of blog posts from the last few months as a PDF, both on my website and on SrcibD. I know ScribdD must be a good place to publish PDFs because they were the first site to host a pirated copy of my laptop eBook, though I’m not inspired to link to them for that reason. I’m no apologist for piracy (and I believe Chris falls more to that side of the fence than the other) but I’m also not going to cut off my free distribution options to spite my reader count for something I’m already giving away.

While publishing a simple collection of free blog posts as an experiment is unlikely to accomplish much of anything, I plan to expand into topical collections. Since there are well over 400 blog posts in my archive, enough for a half dozen full length books, I think I should be able to put together a dozen or so collections on subjects like: eBook publishing, market research, Amazon and the retailers, content website design, publishing business issues, self publishing challenges, etc. Those collections I could publish as an eBook library or bookshelf both on my website and on sites like ScribD, and hopefully they will help build readership for my blog. The only problem with this as a business model is I don’t make any money through writing new blog posts, in fact, it’s a huge creativity drain with no measurable return outside of reputation.

Anderson would point out that I can use this enhanced reputation to earn larger lecture fees, sell T-shirts, or offer consulting services. There’s something to be said for this, in that I’ve already been offered two prestigious speaking gigs this year, I get regular requests to buy Foner Books hats, and despite my protestations that I don’t sell my time, there’s a new inquiry about my consulting rates around once a month. Unfortunately, I’m scared of public speaking, haberdashery, and selling my time, so the reputational currency is tough to cash in. And that brings me to the mirror story of Free and Freemium, which is Scare, and Scaremium, which I prefer to spell and pronounce: Scare Me? Um…

I don’t think I have to explain Scare, life is full of scare and fear, but I want to avoid fearmium because it sounds too much like freemium. Low grade scaremeum is popular with unethical freelancers and other service providers who participate in free forums, such as discussion lists for authors and publishers. I would define discussion list scaremeum as “Marketing services under the guise of giving free advice that it would be suicidal not to purchase said services.” When somebody posts a legal question about contracts or copyright, and a lawyer responds with post that explains all of the things that can go wrong without offering any advice on how to make them right, that’s scaremeum. When somebody asks what font to use for a book and a designer responds by describing horrendous scenarios of zero sales due to a poor book design without offering a font recommendation, that’s scaremeum. From accountants on business lists who explain why your shouldn’t file your own incorporation or taxes, to business consultants who have plenty to say about what you’re doing wrong and nothing to say about how to correct it, that’s scaremeum at work.

The next level of scaremeum is reminiscent of the “protection” sold by organized crime. Protection for your credit sold by the very credit agencies which are responsible for letting crooks access and destroy your credit in the first place is scaremeum at its best. They can even charge to lock your credit record so nobody can access it and charge again to if you want to unlock your record to apply for a mortgage. Creating both the problem and the solution is an ideal scaremeum business model. Phony virus protection software sold through pop-up ads that pretend your computer has just undergone a free scan (and failed) is another example, where the alleged cure carries a Trojan horse bearing the disease.

The biggest users of scaremeum are the many businesses that make up the medical industry, which prefers the friendlier “Health Care Industry” moniker. Friendly scaremeum ranges from online symptom checkers hosted by famous clinics that seem to end every diagnostic path with “See your physician immediately!” to “informational” websites run by pharmaceutical companies that would make Spock question his sanity if he spent enough time following their chicken-and-egg logic. Practically all of the medical information I’ve read online outside of WikiPedia and some support groups could be classed as scaremeum. Even medical spammers practice scaremeum, as demonstrated by the occasional e-mail that slips by my filter to insult my anatomy. All insurance, including health insurance, is sold through scaremeum tactics. Special lose-lose scenarios like the $1,000 plus tax penalty for not joining an HMO in Massachusetts turn health insurance into a pure protection racket.

Scaremeum is simply a more successful business model than freemeum. The largest employer in the United States (after the government) is the medical Industry, with the government funding over 50% of their gross. Under a freemium model, drug companies would give away the pills you have to take every four hours and sell the 12 hour or 24 hour time released versions. Or they would sell reformulations with fewer side effects or with fruity flavors. Instead, drug companies raise the prices of their older, supposedly less beneficial products, to get their users switched to the new drugs before generic competition becomes available on patent expiration. Where are the hospitals and surgeons offering the first joint replacement or eye surgery free in order to sell the second? Why not restore patients to health for free and make a profit selling them activewear and ski vacations? How about free heart bypass surgery as a loss leader to keep patients alive for the jackpot of long term care?

Free in its various incarnations is a neat business model, but it remains a niche model, even in the information economy where it thrives. Fear remains the killer application for both marketing and motivating. Ironically, and perhaps intentionally, one of the strongest arguments Anderson makes for Free is that piracy will force your electron friendly business into a free model whether you like it or not. That means that even the strongest advocate of freemium is marketing the concept with scaremeum. And why not, since it works?

Warning: Reading Morris Rosenthal’s publishing blog can lead to morning sickness in the morning, sleeping sickness at night, and certain sexual side effects (though we aren’t saying which). Readers of a placebo blog report experiencing bliss.


Anonymous said...

Interesting, I had never thought of free as being motivated by an underlying scare (piracy). But you are right; it is. No one wants to go to free, but they are scared into it.

Nevertheless, regardless of how electron friendly publishing text is, I think something you told me a while ago was correct: That even if there were pirated versions of all my books online, I doubt it would affect my sales that much. Most of my customers flat out tell me that they don't want e-books and those who would want e-books would most likely pay for them, and to the 1% who want to pirate them and know how to do it, I guess I would say: fine, take the 1% of my business, I have bigger things to worry about.

Nevertheless it is scary settling into this paradigm and trusting that free isn't going to put me out of business.


Morris Rosenthal said...


I think it depends quite a bit on specific titles and audiences in the end. I'm sure there are situations where giving away free eBooks will enhance sales, and situations where it wlll hurt sales. Some of the most compelling examples for giveaways are in fiction, where it makes the most sense since people read fiction from start to finish for pleasure, and are older for the main part.