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Business - Written by on Thursday, December 18, 2008 10:04 - 0 Comments

The ‘free’ business model

The inspiration behind this blog post came when I was thinking of doing some Christmas shopping for my sister. (Hopefully she doesn’t read this post…) I was looking to buy her the DVD Boxset of the first five seasons of Red vs. Blue – The Blood Gulch Chronicles. The Box set price is $69 USD which is reasonable considering you’re getting five seasons, unfortunately for me I live in Canada so I also have to worry about shipping costs, duty & customs, and the exchange rate difference. (But that has nothing to do with my blog post). [Btw, if anyone knows where I can buy this in Canada, please let me know!]

For those of you who haven’t heard of Red vs. Blue, it’s a machinima series (imagine a movie or tv show, but filmed within a video game) based on the popular Xbox 360 game – Halo. I first came across Red vs. Blue when doing some research for work; I watched a few episodes and immediately fell in love with the show. I was also lucky enough to get an interview with Burnie Burns, Co-Founder of the Roosterteeth (RT) community – and producer of the Red vs. Blue episodes.
Burnie Burns and partners, Gustavo Sorola and Geoff Fink chose machinima because it’s an efficient way to produce animation – 3 people can produce around five minutes/ week. They then immediately post the video on the Web – for free.

Some people may not immediately see the value in this business model – but in this case (and many others) it has proven to be very successful. Burnie and his team are able to do something they love full time, and still give it away for free free. The revenues they make just come from other, non-traditional or unconventional sources (so to speak).

This wired magazine article talks about ‘How T-Shirts keep online content free’. According to the article Burnie started selling shirts and caps online (based on the show). “Within months, he was filling hundreds of orders a week, generating enough revenue to pay everyone a salary.” – Pretty impressive. Now if you go on the RT community they’ve expanded their offering to include the aforementioned DVD box sets, calendars, books, music and accessories like mugs and messenger bags. You may think: ‘why would someone buy something they can get online for free?’ Well, I’m a perfect example.

After learning about Red vs. Blue I told my younger sister about the show. She loved it so much that, (no exaggeration) she has literally watched the entire series (all 6 seasons) at least five times over. The addiction to the show, quality of the video, the experience of watching it in your living room on your tv, the fact that you don’t have to click on another link to watch the next episode are all good reasons (to me) to justify the purchase of the DVD box set. To prove that I’m not the only person willing to shell out some $$ to purchase ‘value added’ merchandise this blog post proves that the ‘free’ model is a viable business model and that many others are looking to buy the RvB DVD sets for the holidays.

One final note: T-shirts and DVDs aren’t the only way the RT guys make money. They’ve gotten so good at creating machinima that other video game companies have approached them to create machinima TV commercials or promotional spots for them. So although they don’t make money directly off of the product they spend all their time creating, revenue has come to them in myriad ways.
Here’s the first episode of RvB – The Blood Gulch Chronicles to get you started. But please don’t blame me if you get addicted!

for more please go here or here. I heart RvB!

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