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Money back warranties or guarantees. These are really forms of free content. The consumer is safe in
knowledge that he can always return
already consumed content and get his money back. In other words, it is
consumer who decides whether to transform
content from free to paid by not exercising
money back guarantee.
Relative pricing. Information available on
Web is assumed to be inherently inferior and consumers expect pricing to reflect this "fact". Free content is perceived to be even more shoddy. The coupling of free ("cheap", "gimcrack") content with paid content serves to enhance
RELATIVE VALUE of
paid content (and
price people are willing to pay for it). It is like pairing a medium height person with a midget -
former would look taller by comparison.
Price rigidity. Free content reduces
price elasticity of paid content. Normally,
cheaper
content -
more it sells. But
availability of free content alters this simple function. Paid content cannot be too cheap or it will come to resemble
free alternative ("shoddy", "dubious"). But free content is also a substitute (however partial and imperfect) to paid content. Thus, paid content cannot be priced too high - or people will prefer
free alternative. Free content, in other words, limits both
downside and
upside of
price of paid content.
There are many other factors which determine
interaction of free and paid content. Culture plays an important role as do
law and technology. But as long as
field is not subject to a research agenda
best we can do is observe, collate - and guess.
This article is, of course, free content...:o))
APPENDIX - Types of Free Content
The experiment of online content is in its infancy. Content creators, providers and aggregators fall into seven categories, though hybrids and permutations abound:
I. Entirely Free Content
Unrestricted access to
entire body of content available through a central URL or database.
II. Registration Required
Access to
entire body of content available through a central URL or database conditioned on providing a few personal data and being assigned - or choosing - a user ID and password. But, subject to registration,
content is entirely free, as in (I).
III. Time Limited Free Content - New but not Archived
Unrestricted but time-limited access to some content available through a central URL or database. Access to new material is free and unrestricted. Access to archived material requires a subscription.
IV. Time Limited Free Content - Archived but not New
Unrestricted but time-limited access to some content available through a central URL or database. Access to archived material is free and unrestricted. Access to new material requires a subscription.
V. Time Limited Free Content - Rotation
Unrestricted but time-limited access to some content available through a central URL or database. Various parts of
Web site (desks, chapters, features, articles, stories, sections, etc.) become accessible at different times. Access is rotated between these sections periodically or thematically or arbitrarily.
VI. Teaser Content
Unrestricted - time unlimited or time limited - access to some content (selected articles, headlines only, etc.) available through a central URL or database. Access to
rest of
content requires a subscription.
VII. Subscription
Access to content subject to paid subscription or payment per item.

Sam Vaknin ( http://samvak.tripod.com ) is the author of Malignant Self Love - Narcissism Revisited and After the Rain - How the West Lost the East. He served as a columnist for Central Europe Review, PopMatters, and eBookWeb , and Bellaonline, and as a United Press International (UPI) Senior Business Correspondent. He is the the editor of mental health and Central East Europe categories in The Open Directory and Suite101.