The future of Free (aka the value of content)

Incase you missed this, there is a ‘Free’ debate brewing online between Malcolm Gladwell and Chris Anderson (Editor in chief of Wired.com and author of Free).

Now Seth Godin (author of Purple Cow (2003) All Marketers are Liars (2005) and Permission Marketing (1999) shares his thoughts on Malcolm’s online bashing of Chris Anderson’s book.

Links:
• Free – Chris Anderson (abstract)
• Malcolm Gladwell’s response in The New Yorker
• Seth Godin’s response to both

Why is this important?

• Technological advancement and the resultant falling costs of digital technology as creating instant demand among consumers

• Four strands of argument on ‘Free’: a technological claim (digital infrastructure is effectively Free), a psychological claim (consumers love Free), a procedural claim (Free means never having to make a judgment), and a commercial claim (the market created by the technological Free and the psychological Free can make you a lot of money).

• The Digital Marketplace - pricing and commerce, the mental transaction costs that differentiate zero and any other price into two entirely different markets, the psychology of digital piracy and the open-source war between Microsoft and Linux.

• The demise of traditional media and advertising models in this time of free information

• How following the argument of ‘Free’ – Journalism is a dying occupation as amateur/citizen journalists are valued for their timeliness and the platform for information distribution

• New media platforms for information sharing and the global shift towards NOT paying for services/information since it will be available SOMEWHERE for free

• The undeniable truth of new business models of the digital age – Youtube = which has so far failed to make any money for Google.

• Advancement in technology and distribution platforms doesn’t change the fact that the infrastructure, distribution and quality control is still expensive

In Seth Godin’s words:
“In an attention economy (like this one), marketers struggle for attention and if you don't have it, you lose. Free is a relatively cheap way to get attention (both at the start and then through viral techniques).

Second, in a digital economy with lots of players and lower barriers to entry, it's quite natural that the price will be lowered until it meets the incremental cost of making one more unit. If a brand can gain share by charging less, a rational player will.”

He continues:
“Magazines and newspapers were perfect businesses for a moment of time, but they wouldn't have worked in 1784, and they're not going to work very soon in the future either.

People will pay for content if it is so unique they can't get it anywhere else, so fast they benefit from getting it before anyone else, or so related to their tribe that paying for it brings them closer to other people. We'll always be willing to pay for souvenirs of news, as well, things to go on a shelf or badges of honor to share.

People will not pay for yesterday's news, driven to our house, delivered a day late, static, without connection or comments or relevance. Why should we? A good book review on Amazon is more reliable and easier to find than a paid-for professional review that used to run in your local newspaper, isn't it?”