92 patterns free as a business Model Advertising is a well-established revenue source that enables free offers. We recognize it on television, radio, the Web, and in one of its most sophisticated forms, in targeted Google ads. In business model terms, FREE based on adver- tising is a particular form of the multi-sided platform pattern (see p. 76). One side of the platform is designed to attract users with free content, products, or services. Another side of the platform generates revenue by selling space to advertisers. One striking example of this pattern is Metro , the free newspaper that started in Stockholm and is now available in dozens of cities around the world. The genius of Metro lies in how it modifi ed the traditional daily newspaper model. First, it offered the paper for free. Second, it focused on distributing in high-traffi c com- muter zones and public transport networks by hand and with self-service racks. This required Metro to develop its own distribution network, but enabled the company to quickly achieve broad circulation. Third, it cut editorial costs to produce a paper just good enough to entertain younger commuters during their short rides to and from work. Competitors using the same model soon followed, but Metro kept them at bay with a couple of smart moves. For example, it controlled many of the news racks at train and bus stations, forcing rivals to resort to costly hand distribution in important areas. Advertising: A Multi-Sided Platform Model Metro distribution agreements with public transport networks write & produce a daily paper distribution ad space in high circulation free paper free city-wide commuter paper acquisition retention advertisers commuters brand distribution net- work & logistics ad sales force public transport, train stations, bus stops content, design & print of a daily paper distribution free newspaper fees for ad space in paper VP CR CH CS KP KA KR R$ C$ Assures high circulation through free offer and by focusing on distributing in high-traffi c commuter zones and public transport networks Minimizes costs by cutting editorial team to produce a daily paper just “good enough” for a commute read bmgen_final.indd 92 6/15/10 5:36 PM