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Free as in beer

In the New Yorker, Malcolm Gladwell runs a sanity test on Chris Anderson’s book Free: The Future of a Radical Price.

There are four strands of argument here: 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 only problem is that in the middle of laying out what he sees as the new business model of the digital age Anderson is forced to admit that one of his main case studies, YouTube, “has so far failed to make any money for Google.”

Why is that? Because of the very principles of Free that Anderson so energetically celebrates. When you let people upload and download as many videos as they want, lots of them will take you up on the offer. That’s the magic of Free psychology: an estimated seventy-five billion videos will be served up by YouTube this year. Although the magic of Free technology means that the cost of serving up each video is “close enough to free to round down,” “close enough to free” multiplied by seventy-five billion is still a very large number. A recent report by Credit Suisse estimates that YouTube’s bandwidth costs in 2009 will be three hundred and sixty million dollars. In the case of YouTube, the effects of technological Free and psychological Free work against each other.

Note that Gladwell’s review is available free online, and Anderson’s book costs $17.19 via Amazon.

Comments

  1. It’s worth noting that most of Gladwell’s critique of Anderson’s book relies on criticisms that Gladwell’s own work is almost uniquely vulnerable to — spinning “trends” from anecdotes, relying on non-evidence evidence to make points, supplying little more than authorial intuition that premises are correct, etc. Anil Dash had a fun post on this recently.

  2. Oh foo, you beat me to the punchline, Jon. I have been working on a rebuttal piece about the tension between new online media and old school print media, focusing on the misunderstanding of “free”. Old school thinks everything’s being given away, as in free beer, and they’ll have not a drop left to drink, while new media realizes is free as in free puppy. There’s a negotiated responsibility or liability which comes with content given freely.

    By the way, you can get Anderson’s book FREE online at Scrib’d — for free. If you want a print copy, that’s your responsibility/liability.

  3. These discussions always get me thinking about Stewart Brand’s “information wants to be free.”

    What he really said was this: “On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.”

    He later said that the tension just won’t go away. And it hasn’t.

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