“They give you this but you pay for that.”
— from My My, Hey Hey (Out of the Blue) by Neil Young
Are the best things in life free? That’s hard to say. Is anything really free?
Navigating one’s way through life requires constant awareness of whether payment is required for the needs and wants we seek to satisfy, and whether certain costs are immediate or delayed, direct or indirect.
The telecommunications industry is but a microcosm where these variances can be seen consistently.
Take cellphones, for example. Each of the major wireless carriers offers a selection of smartphones for free. Well, not really. You don’t pay up front for the cost of the phone; the carrier does. It might not feel like you’re not paying for that phone, but you will through your service plan over the length of the contact, if the carrier has a business model that’s designed to make money, which most do.
The above example fits the hypothesis of nothing being truly free, in that you’re going to pay for what you get eventually, even if it’s in a roundabout way. It’s kind of like health care in Canada. It’s not free, per se, even though you don’t get billed for basic services at a doctor’s office or hospital. This gets paid for by government, but you pay for government.
Then again, in the case of health care and other areas where users don’t pay directly for their services, there are those who get more than what they pay for and others who pay more proportionally to what they get.
As we reported this week in The Wire Report, WiFi networks are getting built (subscribers only) on public properties in some cities, which users can access without having to pay for the service. Even the local authorities that are arranging for these projects, rather than paying, are actually making money in deals that see tech companies building these networks and hoping to make back their money plus some profit from advertising.
So let’s break this scenario down. The individual doesn’t pay for the WiFi service, and neither does the local authority that’s facilitating the arrangements. Advertisers are paying the bills here, and they are the companies that make a living off of selling you goods and services. So essentially, the companies that are paying for your “free” WiFi are counting on getting their money back from you at some point. But then again, you might use a lot of public WiFi and hardly patronize the companies advertising on these networks, or you could be among their biggest customers and not be a WiFi user. Isn’t capitalism in the 2010s fascinating?
Still, after you factor out a number of demographic variables, such as age, wealth and whether you have kids to take to a recreation centre offering free WiFi, you’ve got to figure that, at the end of your life, you’re probably going to end up fairly even in the ratio of how much you pay versus how much you get.
The last two decades have seen a number of traditional media launch online versions of themselves. First it was print media and more recently it’s been TV. The “freeness” of online content has changed throughout the years.
Not long ago, most mainstream news could be accessed without charge, but newspaper websites have increasingly erected paywalls as they found digital advertising alone wasn’t sustaining their businesses.
As for television, you might or might not find content you’re seeking for free on the user-supplied YouTube. But more and more, broadcasters are putting content on their own websites, though many require you to be a subscriber of a particular TV service before you access certain services, such as Shaw Communications’ newly launched History Go or Bell’s CTV Go.
But even with the “free” content you find online, you’re still paying for your Internet account or your wireless service. In many cases, you’re making the payment for the connection to the same company that’s providing the content. In other cases, service providers are benefiting from the popularity of content providers that become web destinations, such as newspapers, but many of these content providers have not yet figured out how to unlock monetization from this in a significant way.
Which is all to say that the kind of stuff we’re covering here means big money for some players and huge headaches for others. And it all turns into a game where the consumer tries to get what they can for little or no money, and the companies try their best to find someone — anybody — to pay for what they’re providing. Some succeed, others don’t.
Derek Abma is editor of The Wire Report. He can be reached at email@example.com.