Why Do People Hate “Free” So Much?

Watching Chris Anderson on Colbert last night gives me an excuse to write this little blog entry about Chris Anderson’s Free: The Future of A Radical Price. Certainly it has stirred up debate, as such notions should. But a number of Anderson’s critics seem positively affronted that anyone could make an argument in favor of “free” as a business model. They react as if Anderson were a cross between an evil genius out to destroy the capitalist system, a charlatan peddling snake oil to the gullible, and an ignorant posseur worthy only of contempt. Mind you, that’s always life in the blogosphere to some degree, but is it really that crazy?

Happily, Tim Lee over at Technology Liberation Front has already written a cogent defense of Anderson’s actual argument. “Free” doesn’t mean everything free everywhere all the time, but it does mean that folks need to rethink traditional business models in light of changing technology and user expectations. Using free to either collect something of value to someone else (such as personal information or an audience) and/or taking the opportunity to “up sell” a premium service (or, as Anderson explained to Colbert, “Fremium”) has worked for many people and businesses.

Indeed, let me go one further on the crazy meter for you. Back at the beginning of the century, someone came up with an even crazier business model than “free.” Looking at new technology, this ignorant young pup adopted the business model of “pay other people to take my stuff.” Now what dumb ass thinks that you could make a living investing lots of money in creating a product, then actually paying people to take it from you. What a moron, right?

The fellow in question was William Paley, who built the CBS network on the model of paying affiliates to take programming. Paley deduced that he could charge advertisers more than enough money to cover the cost of program production and affiliate fees if he could offer advertisers a big enough audience. Meanwhile, a few hours north in New York City, a number of electronics companies (RCA, Westinghouse, and General Electric) were developing a model around cheap content to sell advertising and radios.

So all I am saying, is give free a chance.

Stay tuned . . .

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4 Comments

  1. Dan says:

    I’m all for free(unpaid) as a consumer, and especially for free(unfettered) as a citizen, but as a musician I still think there is much potential in a service model with collective licensing to create a market for information with a market price point above zero.

    That is, when you up-sell the fremium, the proceeds should spread well back into the creative supply chain, not just the last step in the market.

    This is a model with real precedent (radio/TV licensing, cable TV, etc. — even the fiasco of the webcasting compulsory license is a fiasco of implementation details, not of policy concept), and while it is not perfect (what market is), it suggests that we could build a working market for information goods on the idea of usage rights, rather than duplication and distribution rights.

    Any thoughts on that?

  2. John says:

    For any geeky TOTSF readers who don’t read all of wetmachine: you may want to check out my review of Christopher Kelty’s “The Cultural Significance of Free Software: http://www.wetmachine.com/i

    I’m still trying to figure out how to make money by giving my books away for free download. I only make money by selling printed copies, and that ain’t happening very much. I do think, that, like rock bands, writers who want to sell books may have to go on the road –it’s easier to sell books in person than it is on the net. UNLESS, of course, you get some kind of enormously powerful endorsement like a glowing review on slashdot, such as I’ve been lucky to get in the past.

    When Cheap Complex Devices came out, I sold PDFs for $5.

    Then I decided give it away for free, taking the gamble that in so doing I would generate enough publicity to sell even more copies of the printed book.

    I don’t know how to do the accounting on that proposition. I did sell about 100 copies of the PDF before I decided to give it away. And five hundred bucks is five hundred bucks. So there’s a net opportunity cost. I do think that I’ve sold more printed copies than I would have had I not decided to give the PDF away for free, but that’s an untestable proposition.

    I do know that I have not made the PDF of my most recent book ”The Pains” available for free. You can read it for free, and you can see watermarked copies of the illustrations. But what makes the book cool, in my opinion, is not just the words, but the words + pictures + design; that is, the printed book. And that’s not available for free.

  3. Dan says:

    AIUI, what CA is talking about is multiple value streams, where the free ones basically promote the paid ones.

    So yes, free electronic might support paid paper version. But maybe what you need is to get speaking engagements and do a press tour to promote your self as a brand, to get interest in your writings.

    Then eventually you can charge for appearances. And maybe, premium signed copies of the paper book. And maybe, endorsements (you endorse some product for money).

    And for folks who can’t make this “star” model work, well, some might claim that they just don’t have what it takes for significant (if not “popular”) appeal.

    I’m not sure I accept that entirely, myself, though I’m definitely in favor of trying to build a market model that respects the realities and potentials of the new technology.

    I’d like to see a market retained for “content” in its own right, though, not just as a loss-leader for something else.

    I think collective licensing for use (as opposed to acquisition) is a realistic and plausible candidate for such a market paradigm, but such a model faces many obstacles at the outset.

  4. Brett Glass says:

    People do not arbitrarily “hate” free. They justifiably expect to be compensated when they create something that other people find to be of value.

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