FREE as in speech AND FREE as in beer!
FREE!!! Ok, now that I have your attention: Consume, consume, consume, return to my page, hire me for jobs, recommend me to friends and do all this before I make you pay ;).
This or something alike is the gist of what I took from reading Chris Anderson’s book Free (which you can download in an audio version for FREE).
But since this statement alone would be an oversimplification, I’m also sharing some of my notes on the book here, for FREE (as in speech AND beer)! First, so I can have an easily available copy of my notes and second, so someone else might find it helpful.
Here’s what I took from reading this (by the way mindblowing) book plus some of my own thoughts on how I can apply it.
Oh and for all those confused by the title: in the book he explains how people confuse two different kinds of free. Free as in the price and free as in the possibility to be distributed without border / restraint. One is monetary, the other conceptional.
1. Ways to make money online
– Some people have more time than money. They will usually use their time in order to make money. Others will have more money than time. These people will pay money to have more time. The former will be able to do certain things for themselves online. The latter will be happy to pay money for service that save them time.
– in digital form, the marginal costs of distributing goods are near to zero and the dramatically declining costs of digital storage, bandwidth and processing power will drive these costs even closer to zero in virtually no time. It might soon become too cheap to meater (and thus matter). Taking something that is naturally offline into the online world and charging for it, can make a profitable business with low risk. If people buy, it will make money. If people don’t buy, the risk you have is relatively low, because the cost of distribution is negligible.
– Provide free for most people so some people feel inclined to pay for something of higher quality / class or a guarantee on a product.
– instead of charging for a base product, give it away for free but establish a market of products within this free environment. People will then understand why they might need or be better off with these products. Virtual goods will be payed with real money.
idea: make a “beat JoguStine” game, then charge people for funnier / better tools or weapons or higher levels? (casual game)
– link online and offline products. Provide the online for free. Offline products come with a key or numeric code and will unlock further online material. Also possible: create a product as a carrier of something free (ie. iPod + free music)
– people will pay: to save time, to lower risk, for things they love, for status, if you make them once you hooked them.
2. general observations:
– the festival and concert industry is vastly growing. What implications does this have for music journalism? More work due to more events? Or more amateurs covering the events?
– people NEVER paid for content in the news business. They only paid for distribution while the content was payed for by cross-subsidies from advertisers. These advertisers paid content because it brought them closer to customers.
– advertisement can not only be a nuisance. If it is relevant to customers, it can be additional value.
note: Public media hinders itself from providing this sort of content by laws prohibiting that it runs ads.
– there is a general devaluation of content. People are less likely to pay for content, because it is provided for free online (note: wait, doesn’t that contradict the idea of people not paying for content? Or does that only apply to news?)
3. possibly relevant for thesis
– pragmatism for innovation is not only shown by newcomers but also by big players (chapter 9, min. 41)
– Ch. 13: The disposition of a dandelion is waste: it wastes its seeds to reach any possible reproduction possibility instead of tending to a single seed in a good place that will never extend though.
– offline, scarcity rules. Online, we need to think in abundance (what’s that mean for IJ?)
– there might be a future for journalists in getting other ppl to write more successfully about their community for non-monetary rewards.
– coda: the model for online companies was to have an idea, raise money for the idea, grow reach, continue the process until being bought by a larger company. Now, it needs to have a stream of income from the beginning. Anderson says this was the model until Sept 2008 – WHY Sept. 2008? Economic recession?