New Business Model Alert : Free!
Despite skyrocketing fuel prices, Cebu Pacific Air is currently “selling” tickets to international destinations for a princely sum of ZERO pesos.
Boys and girls, for all intents and purposes, the tickets ARE FREE.
While this validates Cebu Pacific’s mission to bring affordable air travel to “Every Juan”, it’s also one hell of a market-share-grabbing/market-building promotion. Can you imagine how many people are lining up for these tickets, moi included?
But what I find interesting about this Cebu Pacific initiative – is that it hints of a larger trend that’s been percolating; A new business model built around giving away things FOR FREE. Yes, a business model built on FREE.
This new phenomenon was actually formalized by Chris Anderson, Editor-in-Chief of geek bible WIRED magazine and author of bestselling book “The Long Tail”. In a Wired magazine cover story entitled “Free! Why $0.00 is the Future of Business”, Anderson posits his thesis – that giving things away for free can have a business model, simply by finding new and creative revenue streams.
Examples abound. Yahoo! Mail is now providing unlimited storage space to users for free, but makes its money from revenues via advertising. The musician Prince gave out 2.8 million copies of his new album Planet Earth through London’s Daily Mail, in the hope of making his money from his live concerts’ ticket sales. He also has an example of an airline giving away tickets for free, recovering instead from the micro-charges on related services (which may or may not be the Cebu Pacific model).
So think about your business. Can you give out something for Free and make your money through other means?
It takes a lot of creative thinking, yes.
But in the onslaught of this ongoing trend, you might have no choice.
The full Wired Magazine article here.
[...] formerly blogged about the new Business Model FREE, as popularized by Wired Editor-in-Chief Chris Anderson who eventually wrote an entire book built on [...]