Breaking Even While Staying True to the Margins

We recently applied to present Freedom Fone: Dial-up Information Service at an upcoming ICT for Development workshop. Our application was eventually accepted, but not before concerns were raised that Freedom Fone might be on its way to becoming a for-profit entity, which would be inconsistent with the conference sponsors’ objectives.

This was an ironic obstacle for us to encounter, particularly at a time when we’re beginning to think through what our business model is going to look like as we move toward self-sufficiency. We are committed to making information accessible to people at the margins of society. And Freedom Fone is intentionally being developed as open source software. These decisions reflect our core values as an organisation. But they don’t make it easy to think of an income model that can support us in our work.

Freedom Fone provides callers with information at their own convenience – they don’t have to hope that they catch the Public Service Announcement on TV, or tune into the radio broadcast at the right time, they can phone the service at their convenience, and get information on demand.

But, unlike radio or television, making a phone call costs money. The longer you stay on the phone, the more it costs. So the pricing of voice services plays a role in their uptake. If your target audience is poor and marginalised communities in developing countries, you know they don’t have a lot of disposable income. But you also know they don’t generally have no income. Here in Zimbabwe, they’re earning money from informal trading, and relatives in the Diaspora are transferring money to help support them. You also know that phone tariffs are high – and they charge by the minute. So you have to make all your content count. And how do you make the service affordable, and still move towards a business model that can sustain your work? You can offer a call back service or toll free number, so that the call is free to the caller. But then you have to cover the cost. Another option is to hope that some friendly telco believes enough in your service to provide you a toll free number for free. But what if you’re working in a country where price controls have driven companies into debt, and sponsoring community info lines is the last thing on their list.

One idea is to subsidise one service with revenue from another. According to John West in the recent Internews Europe survey, The Promise of Ubiquity, the Jasmine News Service has found a market with a micro-finance model. In Sri Lanka, around 100,000 subscribers each pay 30 US cents a month to receive SMS news alerts. This is a great idea – but you’d have to have a lot of SMS subscribers, and low bulk messaging rates, to be able to cross subsidise a call-in service. Another idea is to charge callers for what they will pay for (such as jobs, sports and dating information) and using those proceeds to subsidise free call-ins for development information. We’ve also toyed with getting paid advertising – particularly should the service prove popular and have high participation rates. But there’s the risk of resentment from callers who then have to pay not only for the call, but to listen to the adverts as well.

Over on Steven Clift’s News Online email list, there is a similar discussion going on, among journalists who face retrenchment as traditional journalism cuts back on staff, but who want to continue to do the work they love – and earn money in the process.

We’re in the early phases of thinking through what a self-funded model of Freedom Fone might look like. We know that the information that can earn the best income might not be the kind of information we are most committed to sharing and making more accessible to people. But we also know that it would be less than ideal to create a whole separate entity that earns money – but which means double the work. So we’re open to suggestions from others who have experience or advice to share on this score.