There is no such thing as a free lunch, it is a feeling as old as time itself, yet it remains as true as gravity. In a business model, if someone gets something for free, another party pays the bill. Over the past five years, organizations have found the multi-faceted “free” platform to be highly innovative and efficient, and it has upended traditional ways of transacting.

In a free business model, a significant customer segment continually benefits from a free offer, which is funded by another part of the customer model or segment. For example, RealEstate.com.au is a platform that lists properties for sale and rent for people to search and apply for free of charge, rather than charging real estate agencies for listing their properties.

However, the most popular and captivating of these models is the ‘Freemium’, which is where you get the basics for free and pay for the full version. Often times, the free offer is offset by paid advertising that is shown to users as they use it. It is quite effective when marketing smartphone apps and software to the masses because there is no risk to the customer of trying the product, therefore acceptance is maximized, and then once they enjoy the features they will continue to use it. This generates revenue from advertising or users paying for the full version. Now, while customers were quite happy enjoying the free versions for years, they are beginning to change their behavior.

Take Spotify, the popular music streaming service, for example. It offers users free access to almost all music tracks, artists, and podcasts on demand, right at their fingertips. It’s free to use if you don’t mind the occasional ad here and there between your playlists. Or even YouTube, which provides free access to infinite amounts of video content for you to watch and miss, but be prepared to see ads at first and pop-up banners during.

That’s all very well, however, with ad saturation on all of these platforms coming in and really pushing the boundaries of customer experience and usability, market trends are starting to change again. People are beginning to see the value of ad-free subscriptions in order to reap the full benefits of the product without the interruptions and distractions of ads. So instead of just putting up with loud and jarring advertisements between a client’s music streaming at the gym, they are now opting to pay for the monthly subscription to get the premium benefits.

This is an interesting change for Marketing, since only a few years before, the customer was being pleasantly surprised to actually receive a service for nothing. It caught marketers and organizations off guard as it was revolutionary not to charge customers for a product. Most digital products and some innovative physics enabled this paradigm shift, and it was highly profitable, yet after years of this, the average person is getting fed up with the extrinsic and non-monetary costs associated with its free use. , and organizations are going crazy. now seeing a demand for ad-free versions. This means that the typical modern customer who is quite used to not paying is now learning to pay again because the ‘free cost’ is reducing his usefulness.

What a crazy, confusing and logically challenging statement! Yet it is happening.

Truth be told, it’s not like the cycle has exactly reverted to how things were before the free trend; All industries are experiencing a breakthrough in the way customers interact with and use these products. For example, with music, it’s not like people ever pay $ 30 for a physical CD again. The overall market and the way a customer consumes music went from free to subscription-based ad-free streaming. This seems to be the new and highly accepted trend now, which is being adopted around the world.

There has also been an increase in ad blocking software, which is another threat to the Freemium model, especially on social media platforms like Facebook or YouTube, as these ‘cheating’ clients receive all the benefits for free without having to ‘pay’ compensation for ads.

It’s an interesting trend, and it will be even more interesting to see where innovative thinkers will lead organizational models next.

â € ‹What are your thoughts?