Monday, March 10, 2008

Toward a $0 Cost Future?

By now, you've no doubt heard of Chris Anderson, Wired's Editor, and his recent article, Free! Why $0.00 Is the Future of Business. If you haven't, you should read it - it's an interesting compendium of how technology is changing the value of things. However, as was the case with 'The Long Tail', it's a bit light on analysis and a bit heavy on broad proclamations that don't stand up to further critique. However, all told, reading the article in a commercial open source context can be rather revealing.

I'll summarize some of the article's tasty bits: what Chris calls "cross-product subsidies" are becoming more and more prevalent as technology allows companies greater flexibility than ever to create free complements to what they actually sell. This creation of more and more free complements means there are more and more free things to consume, and this will continue. Thus, everything will be free! Or not... This is a nice, elegant idea, but the article tends to deviate from this elegant description into a hodgepodge of pseudo-economics and other seemingly random bits of information that may or may not prove the author's point.

But before I get into that, a word about how the media is treating this article. You would think, based on the fawning reports in the mainstream press, that Anderson had somehow written some groundbreaking thesis on economics. He hasn't. And in fact, he's far from the first to describe this in the popular media. As I was reminded by a friend earlier today, Joel Spolsky of Joel on Software fame wrote a brilliant, concise article on the same subject way back in 2002, a whole 6 years ago. Considering that the half-life of news in the Internet era is measured in days, if not hours, I suppose our hardworking media members can be forgiven for not realizing they were scooped by about a century in Internet years. Once upon a time, it was the job of the media to suss out fact from fiction and empirical facts from parlor tricks. To, you know, critically analyze something.

As someone who also likes to dabble in economics and technology, Anderson's vision of the free(r) future is tantalizing. However, the primary failing of his article is the lack of any explanation of *why* this is happening. He starts with the premise that technology gets cheaper, particularly Internet-driven technology, and then tells us that this cheaper technology gives companies greater flexibility to give away products and services. But there's something missing here - a big something, fundamental to the whole article. Why does "anything that touches digital networks" quickly feel "the effect of falling costs?" He never bothers to explain. Perhaps he doesn't think it's interesting.

As I mentioned, the basic points are stated well, and I find them interesting. The bit about disruption of markets due to the increasing number of free things is right on the money. But again, this point has been made several times when describing the function of the internet. It's also a point used to often describe how companies can make money off of Open Source software - give away something to drive other lines of revenue. But mostly, my issue with the article is that it pretends to be something its not - it could have stated the point in less than two pages, but it trudges on through a narcoleptic seven pages in a misguided attempt to appear to have found cutting-edge answers to a perplexing problem. Oh well, at least with all the media coverage, maybe we won't have to deal so much with annoying questions about how people are going to get paid for producing free things. I won't hold my breath.

I probably would have never written this without all the media coverage given to the article, but I found all the hubbub incomprehensible. It appears Anderson has an upcoming book about free stuff. I'm sure it will be an interesting read. I, too, am working on a book on this subject. Except, in my case, I'm going to publish it as a work-in-progress wiki book and collect money via adwords (thank you, Google!). *That's* how you do it.

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