I’ve been listening to the copy that I downloaded for free from Wired this week. Chris Anderson practices what he preaches, offering the book free to US users on Scribd, in the aforementioned free audio format, and in a paid book form on Amazon. Anderson, the editor in chief of Wired magazine released his last book, The Long Tail: Why the Future of Business is Selling Less of More, in 2006. Eugene Hernandez from Indiewire described The Long Tail for culture as:
“how a number of businesses that make their money selling culture (music, movies, books) make an increasing amount of revenue not from the high-profile hits, but from increasingly popular niche content. Bigger libraries of say indie films, aimed at reaching narrow audiences, can be more valuable than blockbusters over time. “
Anderson begins his examination of free by discussing Monty Python’s battle against online pirates. To combat the low quality pirated versions of their videos found on youtube, the Monty Python troupe opened their own channel with high quality videos, accompanied by a sardonic reproach:
“For 3 years you YouTubers have been ripping us off, taking tens of thousands of our videos and putting them on YouTube. Now the tables are turned. It’s time for us to take matters into our own hands.
We know who you are, we know where you live and we could come after you in ways too horrible to tell. But being the extraordinarily nice chaps we are, we’ve figured a better way to get our own back: We’ve launched our own Monty Python channel on YouTube.
No more of those crap quality videos you’ve been posting. We’re giving you the real thing – HQ videos delivered straight from our vault.
What’s more, we’re taking our most viewed clips and uploading brand new HQ versions. And what’s even more, we’re letting you see absolutely everything for free. So there!
But we want something in return.
None of your driveling, mindless comments. Instead, we want you to click on the links, buy our movies & TV shows and soften our pain and disgust at being ripped off all these years.”
Their DVD sales soared. Anderson uses this as a starting point for his discussion of the use of free content to entice users to purchase paid content, like the Monty Python DVDs.
Anderson distinguishes between the “bits” economy and the “atoms” economy. The bits economy is based on three basic features: storage, processing and bandwidth. The cost of these items are continually declining, making the production of digital content, like that on this blog, virtually free. He balances the negative opportunity costs involved in producing free online content with the positive exposure that producing content creates for its authors.
The book is well written (and read) and is filled with entertaining and enlightening anecdotes. It reminded me of the work of Malcolm Gladwell, who offers a serious reality check in his article on Free for the New Yorker:
“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.””
Oh Youtube. Gladwell continues to comment that they are likely to lose a half a billion dollars this year, not such an appealing argument for the free content. Mark Cuban goes so far as to claim that Youtube destroyed any possibility of monetizing online video by becoming the world’s largest subsidizer of bandwidth.
Attempts at monetizing youtube through advertising have proven difficult. Companies are not interested in associating their product with baby cat videos or happy slapping. Youtube’s democratization of video is often seen as a quantitative phenomenon rather than a qualitative one. Youtube addresses a different market (or non-market) than a company like HBO, which with a healthy paying subscriber base and superior content seems to be its business and content antithesis. Youtube allowed the world to broadcast itself, but in doing so we also discovered how bad most of us are at making films.
All criticism aside, I highly recommend Anderson’s book. It is exciting, well written and argued, and, perhaps best of all, free.
