When is "FREE" Free?

I'm not so sure, but I think MOST of this we already know...But I hope some maybe enlightened, as to what could be going on out there, and hope they become a little bit wiser from this "well-intended" article Cool

When Free Isn't Really Free
By JOHN SCHWARTZ
Published: November 23, 2003

Is there any sweeter word? Its promise of something for nothing, and its underlying connotation of liberation, put a spring in the step and make the world seem a better place.
But lately, free isn't what it used to be, especially on the Internet, whose very history and technology are based on the notion that information and pretty much everything else online want to be free. Web giveaways increasingly come at a steep price, in the form of computer glitches, frustration and loss of privacy and security - not to mention the threat of expensive lawsuits for large-scale music downloaders.
"You often get what you pay for," said Mitch Bainwol, chairman of the Recording Industry Association of America. "In the case of what is so-called free, it comes along with challenges."
Of course, that is what you would expect him to say. Mr. Bainwol, after all, is the chief representative of an industry that says it has suffered grievous harm from music downloading, and that is trying to quash the free-music movement with lawsuits.
But now people from all sides of the Internet copyright debate have begun to notice that freebies often mask a multitude of possible cybersins. A report released last week by the Center for Democracy and Technology, a high-tech policy group in Washington, called for new regulations, voluntary industry measures and consumer education to combat the problem of "spyware" that often piggybacks on programs, including the software people use to download music.
The Federal Trade Commission has not tried to prosecute any companies for distributing spyware, and courts have declared the programs legal so far. But the Center for Democracy and Technology says that more should be done to protect consumers from sneaky software. "Spyware represents a serious threat to users' control over their computers and their Internet connections," the report said.
The definitions are fuzzy, but the programs fall under three broad categories: "adware," which serves pop-up ads and banners, including some for pornography; true "spyware, " which monitors Web wanderings for marketing purposes; and more insidious "snoopware," which can track everything users do on their computers, whether or not they are online. Some programs can even disable anti-virus software and hijack the results of Web searches.
The list of suspect software is long. Kazaa, the most popular program for downloading free music, comes with a cluster of software, some created by a company called Brilliant Digital Entertainment. One of Brilliant's "extras," called Altnet, can even make someone's computer part of a Brilliant-owned network that harnesses a PC owner's excess computing power to distribute music. Derek Broes, a vice president at Brilliant, said that the program could be turned off by computer users and that the company's products should not be classified as spyware.
On its Web site, the company states that revenue from advertising and installed programs are part of what makes Kazaa free; you can get a version of the software without ads and other clutter, but it will set you back $29.95. Nikki Hemming, the chief executive of Sharman Networks, which owns Kazaa, said in an interview that the extra programs were not a big issue for users. "I think there is a bar not to be crossed, and we've been pretty careful to manage that," she said. With 10 million Kazaa downloads a month, "it's not a deterrent to consumers," she added.
The problem is that very few of those doing the downloading know what they are getting into. That is because most people do not bother to read the contracts that they click through when they install Kazaa - or, for that matter, any other programs and services they download.
"These user agreements that allow the downloading of spyware are Trojan horses," said Representative Mary Bono, Republican of California, at a House Energy and Commerce subcommittee hearing last week. "The average user has no idea that he or she is opening up their entire personal and financial life, down to the keystroke, to an unknown, often ill-intentioned, third party," said Ms. Bono, who introduced a bill last summer to restrict the use of spyware that operates without a computer owner's full knowledge or consent.
Sharman is not the only company giving people unwanted extras. Gator, one of the first pieces of software to be described as spyware by security and privacy experts, is made by a company now known as Claria. It is automatically installed with many free programs and can track a user's Web surfing habits - without actually identifying him or her by name - for marketing purposes. Some versions can keep even closer track of individuals, giving each one a user ID, according to the report of the Center for Democracy and Technology.
Computer games available free from sites like Shockwave.com often carry a program called n-Case, which inundates online shoppers with pop-up ads promoting rival offerings. On its Web site, the company that makes the software, 180Solutions, says 16 million people have downloaded its program, which it says offers advertisers "a 360-degree view of the user's behavior - 24 hours a day, 7 days a week."
People who turn to free services for songs, movies or software may get something else they haven't bargained for: viruses. Bruce Hughes, the director of malicious-code research at TruSecure, a computer security company, says that as much as 45 percent of the free software available on Kazaa may be infected with computer viruses. A Sharman spokesman said the company provides virus protection for downloads.
Before long, the mounting collection of adware, spyware, Trojans and viruses can turn a person's zippy computer into a sludgy, slogging mess. "When their computer gets too slow, they go off and buy another computer," Mr. Hughes said.
Free, in other words, can end up costing a bundle. "Free's got a price tag on it, that's for sure," said Ed English, the chief executive of InterMute, a company based in Braintree, Mass., that makes programs to block adware, spyware and spam. (The latest versions of Internet security packages from major antivirus companies like Network Associates, Symantec and Trend Micro can also block spyware.)
"You're paying with your privacy," Mr. English said. "You're paying with your productivity loss. You're paying with your computer speed."
It hasn't always been this way. Giving away samples and selling "loss leaders" cheaply enough to attract customers is a tradition practically as old as commerce itself. And industries like broadcasting have long followed the advertiser-supported business model, providing news and programming free to consumers - or, in the case of newspapers, at relatively low cost.
Jonathan Zittrain, who teaches Internet law at Harvard and is a director of the university's Berkman Center for Internet and Society, said that the Internet itself reinforced the idea that information should be free. That is the spirit that led to the free-software and open-source movements, in which volunteers work on software together and make it available to others, often at no cost.
The collaborative, early stages of the online medium encouraged sharing. Vast libraries of information appeared on the Web. The dot-coms carried the idea further, using soaring stock prices and venture capital money to provide content and services to customers free or at steep discounts. The new business models blended the old advertising idea with a near-religious faith in growing fast to build customer loyalty.
During the boom, one company, ZapMe, went so far as to install free computer labs in schools across the country in return for being able to show ads to students while they surfed. (ZapMe, which came under fire from people who oppose commercialism in schools and from privacy advocates, has since changed its name to rStar and dropped the free-computers business; it now sells high-speed Internet access to businesses and schools.)
NO wonder, then, that when the technology became available to download music and other digital media easily, tens of millions of people jumped at the chance without considering the legal implications. The nature of downloading made the copyright issues even fuzzier in the public mind. Downloading a song, Professor Zittrain noted, is not like stealing a loaf of bread. "You don't see the loaf of bread missing on the windowsill," he said. "You see the bread on the sill and one that has magically appeared in your hand."
When the dot-com bubble burst, however, the freebie model largely collapsed along with it, said Alan Davidson, the associate director of the Center for Democracy and Technology and an author of the report on spyware.
"They were business models based on hope," he said.
Some true freebies survived the crash. Programs that allow computer users to read the ubiquitous ".pdf" files or to listen to sound clips still cost nothing. Their makers get revenue by selling premium versions of the programs and industrial-strength versions used to produce the documents and clips. Many Web sites, from the online magazine Slate to the Internet Movie Database, still offer their content free and support themselves with advertising. The companies behind popular software like Eudora, an e-mail program, still profit by giving away copies with unobtrusive advertising built in and selling versions that do not show ads. And the open-source movement has produced gems like Linux, the free operating system.
But the belief that advertising alone could finance more than a narrow band of companies was shattered, Mr. Davidson said. And that's when things became ugly. Companies scrambled to find ways to make up for the money they thought they were going to earn from advertising.
Some programs in use today "went from just obnoxious advertising into the hacking area," said Richard M. Smith, a software engineer and privacy expert who has done some of the groundbreaking work that uncovered the ways of rogue programs. On a recent weekend trip to visit his daughter at Bard College, he spent much of his time fumigating her computer, which she had loaded with file-sharing software. The various programs, he said, had changed the security setting on his daughter's machine, opening the door to other unwanted programs that were downloaded automatically.
When he tried to use the Google search service to find Spybot, an effective anti-spyware program, he discovered that one of the programs had substituted a look-alike search page that did not include a link to the program. "There seems to be this meeting of the hacker world and the advertising world," he said. "There clearly is a line crossed that I hadn't seen before."
OF course, someone is almost always making money somewhere. To download free music, for example, you need to buy a computer and pay an Internet service provider.
"There are costs built into every step of these media systems," said Siva Vaidhyanathan, the director of communication studies in the department of culture and communication at New York University. The money just does not go to record companies and artists. "What's really at stake here is who's going to get the money and in what-sized pieces," he said.
But the problems with spyware and other rogue programs may offer the music industry a way out, one that doesn't risk alienating customers by threatening lawsuits. To avoid messing up their computers and surrendering their privacy, people may be more willing to pay for their music - so long as it comes in a form they want and at a price they don't mind paying.
"It's not rocket science, it's not new math, it's not 'new economy,' " said Mike McGuire, director of media research at GartnerG2, the business strategy research group of Gartner Inc. "If people want this thing, they will pay a reasonable price for it - if it is reasonably priced and convenient, and it works when you hit 'play.' "
John Esposito, head of the music distribution arm of Time Warner, noted that plenty of consumers routinely buy movies on demand through cable systems or pay to download ring tones to their cellphones.
"Convenience of access will be the most important ingredient, and they will be willing to pay for it," he said.
The idea of small payments appeals to people on all sides of the debate. "Cheap is really the antidote to 'free with a lot of strings attached,' " Mr. Davidson said.
Professor Zittrain agreed. "The difference between free and 5 cents can be huge" to a business, he said.
Or 99 cents. The iTunes Music Store from Apple Computer is showing that small payment systems, which have not been very successful in the past, can work if there is a large audience for a compelling product, said Avivah Litan, an analyst at Gartner.
Steve Jobs, the Apple chairman, has said that his company does not make much from the store, which has sold millions of songs. The real profit is in selling its wildly successful portable music player, the iPod.
If that high-tech approach sounds like old-style marketing, like giving away razors to sell the blades, that should come as no surprise. The future can look a lot like the past, when Mr. Esposito, the Warner Music executive, could buy singles for 49 cents each at his hometown record store in Punxsutawney, Pa.
To Mr. McGuire, blending the past and the future to give music lovers what they want might provide the best hope for the music industry, helping it move beyond the lingering idea of music as a physical object to be sold.
"What we're talking about is the 20th-century record business versus the 21st-century music industry," he said.

Courtesy of:
http://www.nytimes.com/2003/11/23/business/yourmoney/23free.html

Sue Grin