You gotta give for what you take

Wired has published 6,000 words of editor and Long Tail author Chris Anderson’s new book Free on its site. Anderson, who has been busy promoting the economics of Free around the internet, also gives an interesting interview to EconTalk host Russ Roberts over at the Library of Economics and Liberty, who challenges Anderson on several things.

The Long Tail is a semi-genius approach to the new socioeconomic order of internet culture. Free seems to be a little less considered. There are definitely things that seem “free” like Wikipedia, or blogger for that matter. They are “free” for users. But there are costs in their creation (servers, maintenance, etc.) and someone has to pay for them. Twitter is a good example of how this can go wrong.

What’s more, Anderson seems to acknowledge operational costs (though he doesn’t think they count in the Friedman “free lunch” shibboleth) but hasn’t addressed that I’ve seen the bothersome problem of media creation. Sure, we could all watch YouTube videos shot in someone’s house and film be damned, but until recently, the trend has been more and more expensive films and fewer to choose from. Will the daunting realities of Free make mumblecore the dominant style of American cinema?

One thing that’s suggested by Anderson and Roberts is that the provider could be very important in the process. Just as people now pay Comcast or Time Warner $30-$50 per month as a utility cost to get online, if the provider is the one charging another $10-30 for media access, chances are, people will pay. For example, cellular technology has only gotten more expensive in the last 5 years, which doesn’t make that much sense except people sense value and want the service. I am not sure if that additional revenue will offset the lost revenue of DVDs but there is ultimately a bigger market for a utility-based service than an optional DVD or theatre-ticket buy. How to divvy the spoils will be the next question.


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