Following also is my latest MediaPost column…
There’s No Such Thing As Free!
April 4th, 2008 by Max Kalehoff
Free is the next big thing, according to Chris Anderson, editor of Wired and author of “The Long Tail.” In a recent Wired cover story, a preview to his impending book, called “FREE,” Anderson says that the Web represents an extension of the media business model to numerous industries. “There are dozens of ways that media companies make money around free content, from selling information about consumers to brand licensing, â€˜value-added’ subscriptions, and direct ecommerce.”
Ironically, Anderson sort of acknowledged his own sensational headliner concept of “free-is-the-future-of-business.” He did so by referencing economic “externalities” – a concept that money is not the only scarcity. While costs of technologies or information may be moving toward free, the scarcities of reputation and attention are very real. These new scarcities result amidst an abundance of so-called or nearly free information, products or services. Contrary to the free headline, Anderson suggested: “Free shifts the economy from a focus on only that which can be quantified in dollars and cents to a more realistic accounting of all the things we truly value today.”
Exactly. And Forrester CEO George Colony deconstructed the problem with free in a recent response on his blog. Colony countered with four limits of advertising, but they’re really limits of the entire media model that premises Andersen’s free argument.
1. First, there’s the value of time. Free means sacrificing your time so you can battle your way, with a machete, out of thick forests of mental traps and distractions.
2. Then there’s cognitive pollution. Free and the ensuing entrapments – often advertising – seldom bring serious learning, teaching or valuable advice. Overexposure to ad impressions or other extraneous activity dulls and distracts the mind. That’s not a preferable mental state in an information economy.
3. Consider objectivity. Eventual indirect monetization, which free ultimately can’t escape, taints impartiality. That also clouds accountability.
4. Form usually follows ads, not function. I would expand that to say that product execution usually follows money first, then function. The master agenda of free is to manufacture something that can eventually be sold through indirect media-monetization tactics, not necessarily perform to the highest level of core product functionality for a direct price.
I’m not trying to fight free, nor am I denying that eroding technology and information costs are disrupting economics and pricing as we know them. And despite earlier comments about the consequences of overexposure to advertising, I’m a huge believer in effective and respectful advertising. However, so-called free comes with a price.
Which explains Colony’s conclusions: First, many will accept the sacrifices inherent with free content or product – Andersen’s argument. However, if free really proliferates, it’s likely there will be a dividing countermovement of people who want things not free. Instead, they’ll want things when they want it, and with no compromise attached.
Second, if the Web grows in importance and becomes even more the backbone of critical information and services, the baggage associated with free will not always be welcomed. Colony points to Wall Street trading systems, and first-responder communications systems. These services need to do what they need best, with no ads, no indirect monetization schemes or other compromise – only the best product with a straightforward price and high accountability.
No doubt, information abundance and hyper competition will drive down costs. Festered by our short attention-spans, consumer tendencies and low monetary friction, the lure of free will grow. But let’s be clear: free from direct dollar cost is misleading. When you account for all the things that truly matter, there’s just no such thing as free. Any proliferation of free will drive consciousness of that fact.
Finally, will Anderson’s upcoming book, “FREE,” be just that – free?