Last week I attended the UK launch of Chris Anderson's new book Free. Anderson is the former editor of Wired magazine and author of The Long Tail.
The event, hosted by MediaWeek, featured free drinks (or was that payment-in-kind for some publicity?) and featured panelists Stefano Hatfield, editor of thelondonpaper; Paul Brown, the UK MD of Spotify; and the inimitable Rory Sutherland, Vice-Chairman of Ogilvy Group UK.
No such thing as a free lunch?
According to Anderson "free" used to be a "huckster's phrase" with offers such as "buy one get one free" and "free with purchase". Perhaps referring to advertisers as hucksters in a room full of people that work in the industry was not the best choice of words, but no one seemed to object. He gave examples of offerings based on "free" such as Jell-O giving away free recipe books to stimulate demand of a product no one had then heard of; King Gillette selling razors to banks who then gave away the razors with their "save and shave" program (customers then had to buy the blades); and mobile phone providers giving away the handsets for free in order to sell minutes.
He mentioned that advertising-based business models are also built on free -- a third party is subsidizing your free radio or TV programs. The internet has started with this "old media" model. "With a new media, you always adopt the old business model," Anderson explained.
Freemium - 21st Century Free
The new media model is freemium, where a company gives away 99% of its product/service/information for free and charges a premium for just 1%. This model is already in use by companies such as Spotify. Anderson's theory of the "radical new price" is based in part on the fact that "the cost of everything online falls by 50% every 18 months", a theory that is eloquently debated by Malcolm Gladwell in The New Yorker. (Anderson's response is here.)
At what cost free?
I would love to see a panel debate with those two, or a roundtable about the future of intellectual capital, creativity and investigative journalism. I briefly asked Sutherland after the event whether he thought the trend towards free resulted in creativity being devalued. After all, Ogilvy makes its money from creative ideas. He referred to former J Walter Thompson chair and Guardian columnist Jeremy Bullmore (who I find myself agreeing with more and more), who says that you should never write for free. But Sutherland added that writing for three hours per week is pleasurable, and people will do it for free, but any more than that and it becomes a job. And people want to get paid.
So are all of those people writing for free for three hours per week for online publications such as The Huffington Post who (unless there is more recent news) doesn't pay bloggers taking away jobs from people who are journalists by trade? This to me is where the debate gets interesting, but Anderson seemed to shrug off the notion that there would be a serious impact to journalism, giving an example of an exposé by a local blog about vegan restaurants selling products that were not, in fact, vegan. I doubt those same bloggers would volunteer to go to Iraq to determine whether the purported weapons of mass destruction were, in fact, weapons of mass destruction. Thank goodness we have the likes of Sean Penn for that. Hatfield did mention that we'd always have Reuters and the AP to cover those stories; however, isn't this consolidating information, power and influence on the some on the most important global issues - the issues that would most benefit from the opinions and investigations of trained journalists? But I digress. This is an issue for the intellectuals of our time to debate. At least, I hope they will.
More on "Free"
I will post comments from the panelists tomorrow.
Thanks go to David Quigg for the Gladwell links.