Free is great, but who’s going to pay for it?
Lots of debate this past week about Free, Chris Anderson’s new book. Anderson claims that no consumer under 30 will pay for content. And why should they? YouTube videos are free. Music can be had for free. Even the venerable NY Times is free.
Yet in a convincing review in the New Yorker, Malcolm Gladwell disputes Anderson’s arguments, pointing out that free hasn’t worked as a business model, at least not for YouTube, one of the examples Anderson uses to prove his point. Emma Duncan, the brilliant Economist editor took a shot as well.
(Knowing that The Long Tail never panned out as predicted, Anderson is a good target).
On the other side of the argument, however, stands Seth Godin. On what might be one of the world’s most popular blogs, Seth gives Malcolm a verbal slap arguing that it’s too late: free is here and media properties like Wired and the New Yorker better start generating digital assets of true value or risk going out of business themselves.
However, two facts strike me of interest. The first is that I didn’t pay for any of the above. And that includes Anderson’s original Wired article that started this whole debate. So as a beneficiary of free, I’ve got no complaints.
The second, however, is that none of these writers/bloggers/critics would ever offer up their services without getting paid. Sure, Seth might bang out his daily blog post and not charge you to read it, but that’s what drives up the asking fee for his next book or speaking engagement. Anderson himself makes a hefty salary writing for Wired and last I checked Amazon was charging for his book.
It strikes me there are two different kinds of free. The free we all want to give away: in blogs, on Slideshare, in webinars. And the free we have to give away: news, music, speculative pitches (in my business). The former we give freely in hopes it will earn us attention, respect, confidence and eventual business. The latter we give reluctantly. But as wiki’s, Twitter and YouTube offer us information, news and entertainment (even though some of it’s crap) from a multitude of sources happy to share without charging, all content becomes devalued. This is, of course, what’s killing newspapers and eventually magazines.
This past Sunday the New York Times, in its lead business story, declared that blogs and Twitter are becoming the primary sources of information distribution for new companies and products, to such a degree that PR professionals don’t even bother with what used to be called mainstream media. They let the digital buzz generate excitement and the mainstream media will then take notice.
Still I’m pretty sure that the editors of Tech Crunch and GigaOM are getting paid, and if they have contributors sending them content for free, such as in the case of Mashable, those contributors are doing so in hopes of themselves earning more money elsewhere, their reputations enhanced by their bylines and visibility.
This, in fact, is one of Anderson’s key arguments. Media needs to find ways to convince contributors to “donate” their content so that the cost of acquiring it shrinks to near nothing. (You can’t give stuff away for free if you have to pay to get it.)
But as more and more traditional media go out of business, won’t the quality of what’s left over be significantly diminished? True, in the case of Iran, Twitter might let us know, but isn’t it the perspective and analysis of the New York Times or the Economist that allows us to understand.
And finally the real question: would we ever get content equal to the writing of Chris Anderson, Malcolm Gladwell, Emma Duncan or even Seth Godin if someone, possibly us, doesn’t pay for it? I have my doubts. What are your thoughts? Is free here to stay? And if it is, will there be more Malcolms and Emmas? Or fewer?
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21 Responses to “Free is great, but who’s going to pay for it?”
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Free is here to stay regardless of whether we like it or not. Entire music, tv, and movie catalogs are all “freely”/illegally available online so why pay for them?
Moral arguments don’t really work here. Most people under 30 don’t care about large corporations making money…and figure they are getting ripped off enough.
We’re stuck in spec work mode whether we like it or not, so we should get fantastic at describing “What we are going to do and what the results could be” vs. “The How”.
How do you circumvent this avalanche of free on the business world? Use it to your advantage. Spread and seed viral content in the form of information and ideas. Also leverage communities to gain insight into their collective thought power. Find new business models like Trent Reznor’s most recent album (pay what you want for a download…he ended up making a killing).
People will pay for your services once you reach a certain level. The key is getting to that level without becoming broke first
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Stuart Foster´s last blog ..Salacious Saturday
Stuart:
Agree that free is here to stay (for media companies anyway); that is not even up for debate. My question was, can media actually get people of the quality of Gladwell or Duncan to contribute for free as do the blogs? Will people of that caliber give away content or find a way to give it away that enables them to make money in other ways? Musicians sell branded merchandise and tickets to shows. Godin sells books and gets big numbers for appearances. Anderson is “selling” his Free. The media companies may have to give stuff away that they don’t want to give away, but as for individuals, they only offer up for free what will be an investment in a future income stream.
Check out Anderson’s reply to Gladwell,
http://www.longtail.com/the_long_tail/2009/06/dear-malcolm-why-so-threatened.html
Anderson argues that you can get people to write for free because they get a kick out of being published and read by many readers. That’s a great way to put together anthologies of terrible poetry and local newspapers that struggle to support a basic editorial team.
It’s not, in my estimation, a good way of nurturing talent and producing high quality work.
Thankfully, There will always be people who turn up their nose at the idea of getting something for free. We can count on them to continue to pay for quality, service, and the privilege to identify with something of great value. No matter how many companies go belly up trying to give their product away to attract eyeballs (Didn’t we discuss this right before the dot com bust?) I think we’ll continue to see businesses that charge a fair price for a great product/service and succeed.
Seth Simonds´s last blog ..5 Reasons Twitter Direct Messages Are Useless
Seth:
Succinct and cogent as always. Agree that the primary contributors of free content will be the lesser talents that have no paying audience. I for one will gladly pay to read Gladwell, Duncan and others who are that good.
Godin and Gladwell have to give something away for free. They need to maintain that bit of street cred and the viral nature to their content.
This way they can leverage these “free things” into far more lucrative speaking and book deals.
Stuart Foster´s last blog ..The Agency as A Community
Eventually “free” online content will take its place beside library books and rabbit-ear antennas and be the option left to the poor or the thrifty. The middle class will have disposable income available to pay for better, faster content, and media providers will deliver it at whatever price the market will bear.
“Free” is simply the advertising-supported mass media model shifted online, and isn’t viable because it’s dependent on commodified and/or hobbyist content that no one would ever pay for. It’s as flawed a concept as Long Tail was, and Gladwell decimated it in his review.
Guy LeCharles Gonzalez´s last blog ..Free is wrong for writers; Freemium might not be
Guy:
Tend to agree on the quality argument and Gladwell’s piece is an example of writing we just won’t ever get from hobbyists.
Two thoughts:
1) “Free” is the ultimate deflationary spiral. Deflationary spiral = The Great Depression.
2) If this is now a “knowledge economy”, then my most valuable asset is my knowledge and creativity. You expect people to give away their most valuable asset for free?
My views on this were colored by an Atlantic piece in the current issue, which talks about how The Economist is having a banner year while the news-centric weeklies wither.
Net: If it’s digital, free is the new default. Exceptions will meet 3 conditions:
1. A total price – $ + hassle – less than the total value,
2. A seller with the courage to charge that price,
3. A buyer with the willingness to pay it.
Michael Troiano (@miketrap)´s last blog ..Sustainable Social Marketing
Thanks for another great post.
I think the key issue of the free debate is the level of competition. If it is difficult for others to do than you can charge a premium.
That difficulty can arise from new technologies or ideas that haven’t disseminated widely yet, like professional quality animated movies.
It can also come from a celebrity monopoly. People will pay for a connection to famous people in the form of books, posters and other memorabilia.
It also is connected to production costs like you mentioned. Cars are not going to be free any time soon.
Online, there is increasing competition with zero marginal costs of production and distribution. That means that most of what is selling now, will be given away in the future just to try to gain attention. All of those $30 dollar ebooks will start to be free and sites will charge for membership programs, conferences, etc.
I believe all information will trend to free in the near future. People will start to pay for real connections and contact with real people. It is already starting with bands making money from concerts and merchandise, but giving away the songs.
Magazines will be free, but they will make their money from conferences, consulting and ads.
John Bardos´s last blog ..Travel, Lifestyle Design and Personal Development Links
There is a model that Lonely Planet is trying out where it acts as an aggregator, but shares revenue with its contributors.
Essentially, travel writers with blogs can push their RSS feeds through the Lonely Planet blogging platform, and LP will share the Google AdSense revenue generated on those pages where the bloggers’ articles appear on the Lonely Planet site.
If this works, it’s a harbinger for a model in which independent content is appropriated through some form of contract, and though the readers get it for free, there’s a revenue sharing model going on behind the scenes.
Lonely Planet uses it position in the travel category to attract large audiences, as well as independent bloggers who have content that those audiences want.
It’s a win:win:win scenario–at least for the moment–because LP pays its contributors in trade; the contributors get more validation and credibility appearing beneath the Lonely Planet moniker; and the readers get an abundance of content.
I think that answers your question in the affirmative: content creators will give it away if they can make money in other ways. There needs to be a shift away from the traditional media models, first.
Lonely Planet: Working with Bloggers: http://is.gd/1pYJw
Eric:
Good luck with it. What it’s really doing is asking all writers and journalists to become entrepreneurs. Business Week’s John A. Byrnes pushes for a little bit of entrepreneurialism with his writers, asking that they build relationships with readers. Don’t know if he’s weighed in on “free” yet. Will watch your idea play out. Though I tend to agree with Seth Simonds as to who will and won’t play along.
I take Seth’s points, but I’m not sure Lonely Planet will go belly up with this strategy. It’s only going to help them sell more guidebooks.
And to your point: with all of the channels now available to us as consumers because of the explosion of the digital medium, it encourages us all to be more entrepreneurial, no?
I’m no Chris Anderson disciple, but I think that he’s on to something. I just don’t think that the model has fully emerged yet, and so trial and error (and entrepreneurial ventures) are encouraged.
There will likely be very few who emerge as the leaders, but some are likely to be upstarts who will take the place of the current establishment.
It will be fun to watch.
I just found out the that entire version of Chris Anderson’s book Free, is available for free on scibd.com. How’s that for putting your money where your mouth is?
http://www.scribd.com/doc/17135767/FREE-full-book-by-Chris-Anderson
John Bardos´s last blog ..Travel, Lifestyle Design and Personal Development Links
John:
Thanks. Had heard via Anderson that this would happen. Based on his theory this is a strategy to sell more hard books. He’s hoping the buzz will generate more attention and make the book more desirable. Otherwise there would be no real book. Just the digital version, right?
Information always wants to be free.
@Brandon. Yeah, I do expect people to give away their knowledge for free. Not all of it of course, but its already happening. Take this blog and this discussion for example. No one is going to start charging for this.
Information is only as valuable as what it leads you to. The application of that information is where the money needs to be made. Of course, alternate delivery models of information (like Anderson’s hard copy is not free, but its on Scribd) is a good area to explore where people find value.
A very good and difficult question, but trying to harness information and make us pay for it, I don’t think is sustainable.
Good encapsulation Edward. Interesting to note, however, that what you recieved for free was the conversation around free. And haven’t we always given those away? With the web, however, we are privy to a lot great conversations.
There’s no doubt that the web and the “free” content is disrupting the business models of traditional media. But it’s silly to think that free is what the future is going to be. We’re at the very beginning of web communications and at the stage were it is all very chaotic – and there are no rules set in stone.
It’s great that Facebook, Twitter and YouTube provide their services for free – but so far they are unprofitable. Will they start charging fees at some point? Maybe. Can the New York Timess and other newspapers continue to give away all their content? Who knows? All of this is fluid and moving so quickly.
In 2-3 years, we might all be paying for content for each post and article read. Or we might not. At least it is going to be fascinating to watch.
George F. Snell III´s last blog ..How the Pitch Has Changed
George:
Great reminder exactly how new all of this is. East to forget when we’re all so used to it. From all the comments one thing is clear: there is no consensus. So I guess we’ll have to see how it all plays out.
I am not sure that we aren’t paying for this. Frankly if you look at media spend per person, include TV licenses, cable fees, laptops, broadband,mobile phone bills, etc, each of us is spending a great deal more on media than we have historically. Gone are the days of a 25 cent newspaper that would keep a family informed. Now we have a phone or 2 per person + computers + TV… each of which cost more than a newspaper.
I think we may find that media providers start to create content, the same way we have with the cable channels. Think HBO (HBO which used to be a pipe found itself producing made for TV movies and then the hit TV shows, Sex and the City anyone?) and Sky and….
Lucy:
Good point. Thought it’s not always the content creator who’s getting the money. Unlike HBO which collects a huge percentage of your cable bill via Comcast or whoever, the NY Times is not getting paid by the same company’s Internet services. So you may be paying for broadband, but the broadband supplier, while paying HBO is not paying the news services. Will that become a new model? Probably not. For sure there will have to be some means of generating revenue for the likes of the Times, or it will be impossible to continue to provide the same level of quality. But I’m not sure if it will be the HBO model. Don’t forgot, HBO, in the early days, was the reason for getting cable. You’d have broadband with or without the NY Times. Yes?