July 3rd, 2009 - 7 Comments
Free has it's place, keep it there.
Chris Anderson wrote an interesting article about Free being the future of business for Wired Magazine in 2008, and made a lot of interesting points.
He has now published a book called Free (The Future of a Radical Price: The Economics of Abundance and Why Zero Pricing Is Changing the Face of Business). The book is not free, it’s about €18.99 as pointed out in Malcolm Gladwell’s review of the book.
Gladwell is another thought provoking writer and it is worth reading Anderson’s original article, then read the review and then for laughs read a third thought provoking author’s view on it from Seth Godin.
For the record? All three authors have interesting points to make but (admittedly without having read the book) I like Gladwell’s analysis best.
Books of this type like to put forward black and white theories on how things are, how things will be or how things should be done. Gladwell too may be guilty of this in his own books, but he speaks the truth here:
The only iron law here is the one too obvious to write a book about, which is that the digital age has so transformed the ways in which things are made and sold that there are no iron laws.
There will always be a place for free. But on the internet some tend to assume free is a right, but we should be mindful of being bullied into being free without a solid plan in place to actually generate revenue.
That said, I look forward to reading the book as a thought provoker.
This entry was posted
on Friday, July 3rd, 2009 at 1:31 am and is filed under Marketing.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
7 Responses to “Free has it's place, keep it there.”
Hey Aodan, no I haven’t read that – I’m a poor enough reader to be honest. I rarely read these days, it’s terrible.
I will check it out though.
Yeah, there’s a lot to be said for free, but there are areas where it just doesn’t make sense too.
For example it annoys me to hear people say that musicians should embrace free and make money from touring, and yet who doesn’t give out about the price of gig tickets?
The time energy and effort that goes into making a (good) album is incredible – why should we accept that music should be free just because at the moment we can’t control piracy?
And yes, I know I sound horribly capitalist in saying music shouldn’t be free – but don’t get me wrong, free music would be great but it would then be likely to be always one guy and his guitar who has some other job to actually support him.
Another example would be the whole newspaper debate – I realise the issues plaguing the newspaper industry are highly complex, but I do feel that some newspapers took down the infamous paywall for no good reason other than that the internet frenzy was around free information at the time – but they had no plan in place to generate revenue.
I remember reading that the New York Times (I think it was) was on target with their revenue targets but decided to remove the paywall in favour of potentially higher income from online advertising on free content – but online advertising by it’s nature means that to be successful means driving your traffic away from your site…
It made no sense to me at the time, and now as Gladwell points out the Wall Street Journal is doing very well with it’s paywall.
Phew – I didn’t mean to write such a long comment… probably should have just written another blog post! 
July 3rd, 2009 at 1:12 pm by Frank Prendergast
Hi Frank,
It’s a fascinating topic.
I’m not sure that whether something should or shouldn’t be the case is the core point though; whether we want it or not, or whether it suits us or not (as musicians, artists, writers), the ‘free’ economy will exist in different forms.
As far as I can see, any product or service that has a digitised element is vulnerable to the forces of the free economy. Our main concern should be “how can we position what we do for maximum effect in this economy?”. This may not be an easy question to answer.
A lot of the work I do has established ‘norms’ regarding pricing, with many in the business saying that the market will perceive the value of the service by the level of the pricing. The logical extension of that argument is that a free service has no value.
Funnily enough, I see a link on Twitter today to a free audio version of Anderson’s book. Maybe this is an example of how a free distribution of the audio may drive further sales of the paper version?
Aodan
I think by and large we are in agreement, the question for me being whether we should accept free where the market demands it, even for example where that market has been founded on an unsustainable model.
Gladwell mentions of Anderson’s book that he says:
[Musicians]should stop complaining, and capitalize on the added exposure that piracy provides by making money through touring, merchandise sales, and ‘yes, the sale of some of [their] music to people who still want CDs or prefer to buy their music online.’
I agree with you 100% that the main concern should be how we can position what we do for maximum effect in this economy, but I don’t think that free should be embraced in a fatalistic manner wherever it crops up.
There are interesting cases popping up in the music industry where bands or musicians are leveraging on their loyal fan base to sell their music – the infamous Radiohead experiment, and the direct-to-fan sale of the David Byrne/Brian Eno album.
In both cases Free was used – in Radiohead’s case, you could pay from 0 to whatever it was and in the case of Byrne/Eno the first song was free and then a week later you could buy the album.
However both cases involved buying the album, recognising that the loyalty of their fans would ensure an income, albeit using the free economy as a marketing tool.
While an element of the music market expects music for free, the musicians mentioned above have realised their true fans value, and will pay for, the music.
It should be noted that these artists have existing large fan bases to work from but yes, these artists have positioned themselves for maximum effect as you say.
And perhaps this is Anderson advocates, until I read the book I can’t say for sure – but it sounds like Anderson thinks that the music industry should accept piracy and move on. That, I can’t agree with.
July 7th, 2009 at 1:09 pm by Frank Prendergast
[...] Many people have engaged with this concept in the blogosphere. Frank Prendergast and I explored what the idea means for us. [...]
July 31st, 2009 at 8:39 pm by Is ‘free’ a viable business model? | Smarter Egg
I just finished reading FREE last night. A good read, I like Anderson’s style. Of most value is the section at the back where he pulls apart various objections to free. When you’ve read the pages preceding, you will be nodding your head in brainwashed adoration!
Notable comments imho from Anderson was his take on the current economic climate and how build it, raise money, build massive banks of users, and then sell at a premium days are over. Today Free must be matched with Paid. We must invent not just products that people love but ones that they will pay for. Therein lies the challenge! 
I must get my hands on it soon, it sounds from your description like there might more depth to the book than some of his critics give him credit for.
August 20th, 2009 at 2:19 pm by Frank Prendergast
Hi Frank,
I think you’ve extracted a sharp insight there from Gladwell regarding the lack of iron laws. In an evolving economy, all we have are trends and progressions (and unexpected events); certainty tends to be elusive.
Have you read ‘What Would Google Do?’ by Jeff Jarvis? He kicks around the ‘free as a business model’ concept and we have used this book to great effect in our learning groups. More and more people are looking for ways to integrate some level of ‘free’ service into their business.
Aodan
July 3rd, 2009 at 9:37 am by Aodan Enright