On the Debate About Free
Belatedly, I finished reading Chris Anderson’s somewhat controversial Free and his friendly volley with Malcolm Gladwell. Actually, it was Gladwell’s review that prompted me to buy the book (even though one can download it for free—but I don’t like reading on screen and I like supporting my local bookseller, Kepler’s). Free is well written and engaging, and offers many new ways to look at economics and business. While I can’t say I am sold on all of Anderson’s bold assertions, I did come away with two concepts that I can put into practice. The first is the idea of the reputation or attention economy—Anderson even uses this concept to value Facebook at $1.8 billion. So our “friends,” “followers,” “connections” etc. are reputation currency we are acquiring, unit by unit, that we can trade in one day to help us land that prized appointment, assignment, partnership or contract, based on which we will be duly rewarded by units that are anything but free. And this idea of reputation currency applies equally to our personal as well as our product brands. Here’s another tangible example. Recently, a highly respected consultant to the clinical diagnostics industry, The Dark Report, started a new service http://www.darkdaily.com/ where companies can post white papers on their site, for a fee, to reach senior executives who have been loyal subscribers to The Dark Report and its now famed Executive War College. Downloads by the executives are, of course, free.
My second take-away is that, whether or not we completely understand and/or buy into this new “free” economy, Anderson is right about “free” being an inevitable force of gravity, at least for now. So, for those of us who are not economists and who cannot or do not want to get to the bottom of why things like YouTube or Google searches should or should not be free, we can take Anderson’s advice. We can take advantage of what’s free and build businesses around this “free” economy as it stands today. Why not post educational videos on YouTube? Why not use social media to engage customers and, even more important, get to know them by listening to them? Why not use the dazzling array of free services and tools to bootstrap a new business venture? After all, most of us would rather be at the receiving end of “free.”
For the latest updates, see Using ‘Free’ to Turn a Profit and the debate about the value of content in Sacrifices made in hunt for new model.
Lena is articulating the new dynamic in marketing on the Internet. “Free” is an expectation of Generation Y, also called Millennials. Born between 1981 and about 1995, these individuals have had access to personal computers at an early age. They were avid users of the World Wide Web when it emerged in the mid-199s and were first to have email accounts.
This generation gets its news directly off the Internet, in real time. Thus, why the need to read a newspaper or a printed periodical? For them, it is old news by the time it reaches their hands. Napster demonstrated the power of “free” and caused recording industry revenues to free fall. Wikipedia.com is a new paradigm for both information and knowledge.
As controlled circulation industry magazines lose their power to reach the youngest executives and professionals, it will be web sites that meet the expectations and needs of the upcoming generations that prosper. Credibility certainly plays a role. But I suspect “free” on the web will be a troubling reality for all companies attempting to develop communication, marketing, and sales channels with this audience.
As a matter of disclosure, I am the individual who conceptualized the http://www.darkdaily.com approach to providing useful information to a targeted industry. Like most of you, we are learning as we go and hopeful that our model may prove effective at creating an information channel to desired prospects, using a revenue model that allows it to be self-sustaining.