Is free fun killing our economy?

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Permalink Reply by Mike Seidle on July 9, 2009 at 9:20am

Pat - Better start charging for Smaller Indiana right away. It's free and it's fun. And it's cutting into someone else's revenue somewhere! What are you thinking?

What does it say about entertainment that people like free computer stuff more than live stuff you can pay for?

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Permalink Reply by Pat Coyle on July 9, 2009 at 9:45am

For one thing, it means that advertising driven businesses are having trouble SCALING the way they used to. Which to me is a good thing...which is why we're trying to generate revenues through sponsorships and events...its harder, but I think higher quality.

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Permalink Reply by Mike Seidle on July 10, 2009 at 7:24pm

You are doing great, keep it up.

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Permalink Reply by Stephen James on July 9, 2009 at 10:10am

Maybe because I'm from rural Kentucky or because my parents usually read or played games with the family to fill their free time, but the idea of paying to have fun is foreign to me. It was the same for the people I surrounded myself with in college. Now that I live in a city, I enjoy the art, ethnic restaurants, etc. but it is still difficult to spend money in order to enjoy myself.

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Permalink Reply by David Mark on July 9, 2009 at 7:01pm

@Chris - ditto. I also grew up on a farm and we ran the land! I truly do miss those days. It reminds me of the classic movie 'Stand By Me' (w/o the dead body, of course). We road bikes miles into the country w/o a map or compass. We hiked down creeks for miles hunting turtles and crawdads. We had a rockpile at the farm with huge boulders to climb, a tree HOUSE, barns, cattle, John Deere tractors ,a pond (giant freakin' puddle) and the lightning bugs hovered by the thousands over the tall grass pasture while the sun melted into oblivion. The only investment I made was in experience.

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Permalink Reply by Julie Grice on July 9, 2009 at 11:46am

I certainly don't think it's killing our economy, but it's definitely making us think really hard about how to recalibrate how we market - and to whom, specifically.

It's hard for me to imagine the day when there is no need for pure advertising; for telling an audience about your product/service features and benefits. But sponsorship - when done right - can be tremendously effective in expanding revenues for a company.

The real value of sponsorships lie in their ability to deepen relationships, have conversations and add value to the customers'/audience's lives. (Sound familiar, Smoosiers?) Smart companies are starting to realize this, with the average share of marketing budgets captured by sponsorship now at an all time of of nearly 18%. Ultimately, I think social networking and sponsorship are going to be a marketing marriage made in heaven.

Bottom line: In this age of opt-in/opt-out media, the only way to reach customers is to have them reach you.

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Permalink Reply by Heather Sokol on July 9, 2009 at 4:13pm

I don't think it's an issue of free fun vs. paid entertainment. I think the issue you're referencing is really more about being social vs. solitude. Free entertainment on the web isn't keeping me from going out into the world. There is plenty of free entertainment out there already, and always has been. If I need to cut costs, I can hit the parks, a free neighborhood pool, community plays, poetry readings at the bookstore...

Free fun, food and stuff in general has always been out there (which is great for me since my job focuses on helping people find it!) I don't think that it affects the economy in any real way. In fact, it usually has the opposite effect. Free draws crowds - most of whom don't stick with just the free. They go in for the single free item and spend a lot more. I take my kids to the free movie every Tuesday morning and usually walking out having dropped $20 on food.

Of course, if you really need to cut costs you can certainly skip all of it and stick with exclusively free, but the percentage of people who do just that aren't going to have a significant impact on the economy.

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Permalink Reply by Stephen James on July 9, 2009 at 5:33pm

I agree. Free entertainment on the Internet is mostly taking away from other solitary mediums like television and reading.

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Permalink Reply by David Mark on July 9, 2009 at 6:49pm

Stephen - I've been following you for sometime now and I think you're a smart fella. You've always had insightful, sometimes humorous and mostly agreeable contributions on SI and Twitter. Just thought I'd throw that out there. It's been a pleasure.

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Permalink Reply by Sage McGreen on July 9, 2009 at 7:04pm

Yes, I do think the free web activities will destroy portions of our economy, only for something better to emerge. Could we be returning to the true origins of economics? Tyler Cowen remarked "economics comes from oikonomia, the ancient Greek word for household management" and not from a measurement of spending such as our GDP. I love DIY solutions. If I can fix it, make it, do it, or learn it, I won't pay for the service or product. Why should I?

I also agree with Tyler Cowen's term, human capital dividend. Automation gives us more time for enrichment and/or "free time" so to speak. In the comments at Fast Company someone mentioned a "human enrichment index" or a new economics to measure our progress and not our spending. There was also mention of a "Gross National Happiness index" in Bhutan. That GNH is based on four pillars; sustainability, governance, maintenance of cultural values, and protecting of the environment."

We need a progressive shift away from the trappings of consumer spending.

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Permalink Reply by Sage McGreen on July 10, 2009 at 4:31pm

Will all the personal branding on-line create a framework for a new economic index of human potential?

I'm not an advocate of personal branding. I don't want to package myself as a product. I've seen many branding mishaps. When you establish a public image you have a role, and expectations for that role.

Will our new system of exchange be one of insights shared with others? That idea comes from The Celestine Prophecy, a new age idea about humanity transcending so many trappings of society. If I remember correctly, it was the ninth insight.

Will the "free time on-line" restructure our values? Will sharing all the continuous and synchronized information, creativity, and insights on-line adjust our GDP to measure it's people?

A nations best resource has always been it's people, and not what comes from the earth.

and....

I guess I am the product of my environment.

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Permalink Reply by Steve Stuck on July 10, 2009 at 1:19pm

Is all this free fun killing our economy?

No, paying off consumer debt is now the big deal while people are saving. We are now paying for our sins of people living $100,000 lifestyles while they only made $50,000. Want proof? June numbers just released show Americans are now saving at a 6.9% rate and monthly credit card debt is being paid off. Our trade numbers are down as well to record low numbers meaning people/business's are not buying things they once were.

People are still consuming, but not what they used too. Instead of going to Florida, they are going to the zoo. Instead of buying new vehicles they are doing home improvements.

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