The Cost of Free.

The internet once promised complete information equality. Children in poor countries would have access to the same knowledge as a child in California. But, it hasn’t turned out that way.

Different countries have different ideas about the internet. China and Turkey censor their internet aggressively, while America allows disinformation, extremists, hate speech and pornography to infiltrate every corner of the web.

The Arabic language, for example, is spoken by more than 350 million people, but represents less than 1% of the information on the internet. The Spanish internet isn’t that far off.

In an absolutely brilliant and impressively in-depth report by Kevin Roose, Elizabeth Weil and Bill Wasik, contributors to The New York Times and Atlantic magazine, the argument is made and thoroughly supported that the free internet we were all promised has devolved into a cesspool.

I obviously agree and have been beating this drum for many years.

Today’s internet works a lot like the real world. “It has an income-based hierarchy in which everything, from cleanliness of the water to the quality of the schools, is determined by how much you can afford to pay.”

Look at the internet 10-20 years ago. Everything was supposed to be free. Hulu, a video start-up at the time, claimed the end for the era of paid television. You would be able to watch your favorite shows over the internet, “anywhere, anytime for free.”

The largest newspapers and magazines started pulling down their pay walls or not building them at all, giving way to the internet’s maxim that “information wants to be free,” a maxim that I’ve consistently challenged and have seen supported by smart people like Cory Doctorow.

In 2008, Wired magazine ran a cover story that said, “Practically everything the web touches starts down the path to gratis,” calling free services “the future of business.”

So, where are we today?

The average American spent over $1,300 last year on digital media. Even Hulu, the champion stalwart of “free” television, pulled the plug on their free tier of membership. The cheapest Hulu subscription is now $7.99 per month.

Watching YouTube videos has become nauseating if you don’t have a paid YouTube TV account, starting at $11.99 per month, unless you enjoy watching horrible ads for horrible products that pop up throughout the viewing experience.

From news and productivity apps and dating sites and even an incredibly popular email program, Superhuman, which costs $30 per month, the internet has clearly walled itself off into a neatly manicured garden for those who pay and a wild jungle for those who cannot or will not.

This begs the bigger question, what is the real cost of free?

If the free internet results in Facebook mining our data, Amazon and Alexa tracking everything you say and order, Google collecting personal health information and selling all of this to the highest bidder, countries like China and Turkey vigorously censoring their internet and extracting a heavy price (up to and including the rights to your intellectual property and trade secrets) in order to do business in their countries, then where is the internet headed in the next 10-20 years?

It’s an important question and is covered in the aforementioned report, which I’ll be sending to and dissecting for my private clients.

As a subscriber here, I’ll give you a few hints regarding the main takeaway points and lessons for your practice. I’m not shy about the paywall I’ve erected in this business nor do I undervalue the information I share and the power it holds for smart business owner who implement. It appears it only took 10 years for Hulu to catch up with me.

First, there will be more and more regulation and taxation on the internet, information and data.

Your ability to out-earn all of this and to maintain adequate margin in your business is paramount. Go back and look through this report to see where I’ve encouraged you to get better at asking what never changes. Relationship marketing, internal referrals, driving more revenue per employee and lifetime customer value – these all start with a sold understanding of human psychology and behavior.

The best firms on the planet are well-suited to this challenge.

Even World Wrestling Entertainment has over 60 data scientists who work tirelessly to protect their brand and the connection with their fans. It’s wrestling for crying out loud. I doubt the world’s best dental and medical associations have one-tenth the staying power for the next 20 years to help their members navigate the tremendous tidal wave of online regulation and taxation coming their way, and these associations do something a little more important than leg locks, atomic elbow drops, piledrivers, jackknife powerbombs or Stone Cold Stunners.

Second, you must learn to master this online opportunity for your business to attract and retain customers or smarter people will eat your lunch.

Marc Andreessen was right when he predicted a future where there will be two classes of people: those who tell computers what to do and those who are told by computers what to do. AI will quickly separate the smart marketers from those dragging their feet, thinning the herd and distributing more income to the top 1% faster and faster so that each industry and niche is dominated by a few top players in each market.

In a recent event with Jimmy Nicholas, he and I unpacked and revealed for the first time the new A.I. his team has built with IBM’s Watson, in order to accurately record, transcribe and predict 99.8% of all incoming phone calls for our mutual clients. Jimmy and his company, Jimmy Marketing, do this nearly 60,000 times every single month.

He’s mining those data to help clients predict the times and hour of the day when they are most-likely to miss calls, resulting in a potential revenue recapture of nearly $25 million per year for our clients.

Jimmy runs the same predictive A.I. for our Google and Facebook ads, split-testing the best offers and calls to action, boosting conversion rate for one of our radio-to-web campaigns by 432% while simultaneously driving down cost per lead by over 3X.

Third, if you think you can figure this out on your own, as a small business owner, doctor, lawyer, specialist or audiologist, I urge you to put on your thinking cap.

Seek more clarity about where the web was 10-20 years ago, where it is today and where it will be 10-20 years from today, and run like the wind to see if your market is available to work with Jimmy and his team.

If you are already working with Jimmy and his team, your job is not done. I’m urging you to get on the phone each month with your marketing account manager in his office and set bigger goals, leverage untapped opportunities and invest like the big boys and girls who lurk in the shadows, waiting to eat your lunch.

This is a clarion call to action.

The cost of what the internet tried to be (i.e., free) is about to destroy anyone promising you something cheaper and less sophisticated than what we’re doing now and in the future with Jimmy and his team.

Get this done now, or please don’t say I didn’t warn you.