Article: “Priced to sell, is Free the future?”
Source: The New Yorker
Article which reviews in extent Chris Anderson’s book “Free: The Future of a Radical Price”.
The radical pressure on prices on all things “made of ideas” is an iron law to mr. Anderson.
Anderson first explains the technological trend which with regard to costs is nearing the zero costs.
The article writer then goes into detail of a M.I.T. experiment conducted by behavioral economist Dan Ariely which concludes that free and cheap are perceived very differently from the customer point of perspective.
Anderson writes that “Free” is magic and business could be created around the object/idea given away, he cautions that “Free” involves moving from a scarcity mind-set to an abundance mind-set.
This is where I don’t agree, for two reasons:
* Free does not reflect the quality and the need, both from the user and business point of view.
* On the Internet something else that is scarse is more important, namely Time.
With regard to the first point, information and ideas might be in abundance, but just because the cost of production is near to zero does not mean it satisfies needs and solves problems. Of course, from the point of view of the producer it does not matter if it is long tail or has an average quality, again due to the costs nearing the zero.
Like the article also suggests, advertisers don’t want to be associated with average information, or content which is available in abundance just to be found on.
Just like money can be made from the things around the object/idea, also the things around the object/idea cost money.
With regard to the second point, paradoxally, as information wants to be free, democratized and available to many, as scarse Time is for the users, and precisely Time is what should be paid for by publishers, advertisers and businesses!
Through the quality content and ideas scarse time should be earned from the target audience. There are enough examples who deploy this kind of business model, from membership models, to upgraded models which give you access to more information.
People want to pay if it satisfies needs and solves problems, something free can still be a waste of time.
Underlying processes and enablers such as technologies and the possibilities to democratize the Internet neares the costs of zero, the information flows that occurs through those processes and enablers are valuable and much can be earned with it.
What’s your opinion of the “Free” model?
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