Tuesday, October 13, 2009

Free books at $26.99

Chris Anderson: "Zero is one market and any other price is another".

'Free' is not a completely new marketplace. As Anderson writes in the book of the same title and before in the Wire article Free! Why $0.00 Is the Future of Business, there are examples of businessmen that decided to give away one of their products in order to gain something: either audience or create in the consumer the need of a complementary product.

In fact this is what he has done with the book. For a limited time, anyone could read a pdf version for free in Scribd, and even now anyone can obtain the unabridged audio version, read by Anderson himself, without paying for it. But if anyone prefer to have the hardcover book version at home, then he or she will need to pay $26.99.

The book talks about a reality in the digital world: storage and delivery costs are getting cheaper and cheaper each year and tend to zero cost. And talks also about 'free' as a marketing trend that is becoming one of the few successful nowadays: give something for free and you'll have the attention that would cost enormous amounts of money otherwise. And Anderson does so with an entertaining style, mixing storytelling and statistics.

But in all its brightness, it would be dangerous to see his points as perfect, absolut or definitive. It wouldn't be fair to look at this work as a philosopher's stone that can solve all the business model problems. Mainly because Anderson tries to show how it works something that is still growing and mutating.

Healthy controversy

For that reason is good to find voices as Malcom Gladwell's that make objections and ask questions that, if answered, can help the 'free' hypothesis to become stronger. A good example is Anderson's response to Gladwell in the post Dear Malcom: Why so threatened?

I don't really see a tremendous difference between what Anderson says and Gladwell's points. Basically what the latter says is that most web free services that are successful engaging people still doesn't make enough money to pay their costs. And that considering 'free' an iron law is wrong, because what really happens is that the digital age has changed everything and now we have to figure out how to make a living from our intelectual work. And 'free' is just one more option among the many that can show up in a near future.

And I find too adventurous to state, as Seth Godin does, that a publishing company as Conde Nast will sure disappear quite soon. I agree that they'll have to change, but may stay in business even longer than Youtube, Hulu or MySpace. Godin himself says that "only really valuable information will get paid", and Conde Nast produces great information. Their challenge is to guess how to monetize it, and Mark Cuban believes that the Music industry has already found a path: you can give content for free but always keeping control on the distribution.

Internet and 'free'

For me, the concept of 'free' in the internet is somewhat wicked. First because is not real free: you are paying for the connection. Then, because giving content without expecting money in return was a great marketing idea when the commercial internet started up, but it haven't fully proved to work from an economic point of view.

If advertising revenue keeps low and no-one comes with new business models, a lot of webpages will have to close at some moment. Even some with millions of users. Because millions of users represent millions of profit options but what they are, for sure, is millions of spendings. Will MySpace or Hulu resist if they don't have benefits in three more years? If they do is for strategy reasons related with companies that have their assets in the offline world.

And also internet 'free' is wicked because you tend to think that you have some kind of right to get everything without paying. And maybe won't use a web service that is $1 more than free, even if is terribly useful. But at the same time you but will pay $5 for a latte and a muffin in any coffee shop just because you need to make time waiting for someone. Culture and environment makes a big difference when stating what are you willing to pay for.

And that's the reason why the paper version of Anderson's book needed to have a price. Because all books have. At least until now.


PD: 2 cents on storytelling in a 'free market': if both the creation and distribution costs are almost free and I can compete with the best possible price (zero), I'll find myself in the same start conditions than anyone else. This can be stressful, but also hopeful: all I have to think about is to deliver the best possible product, focusing in the user's attention because of my topic and trying to engage them at the very beginning of my pieces.

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