Can you make something out of nothing? Well, I think it would be a difficult feat if we were talking physics. But business-wise, it is possible to make something out of nothing. Or at least you can make money out of free services—in this case, free WiFi.
In the early days of WiFi, access was directed towards the high-end of the market. WiFi devices weren’t as widely available as today, and also not as inexpensive. Hence, Internet cafés, hotels, and public wireless network providers used to charge for access—quite exorbitant rates for today’s standards, actually. However, with a wider utilization of WiFi, it makes business sense to offer WiFi access for free while earning from other revenue sources, such as product/service sales and advertising.
This is now the model of California-based wireless provider MetroFi, which used to charge subscription for access, but has decided to offer its services for free, instead. The company conducted a study where it determined that there is more revenue potential—from advertisements— in servicing a larger customer base with a free service than if the firm stuck with the subscription revenues from a smaller client base.
MetroFi’s study also took into consideration that it was burdensome and costly to maintain its marketing, customer relations and billing systems. Hence, with this free service, they would no longer have to worry about such overhead, and they can focus on improving and expanding the network.
So can something come out of nothing? Well, companies can earn from “free”.