Chris Anderson on the future of “Free”

Posted by amyrolph on
Friday, July 17th, 2009 at 3:07 pm

There’s no such thing as a free lunch. Somehow, someway, you’re paying for that sandwich. Just maybe not in the way you’d think.

That’s according to Chris Anderson’s latest book, “Free: The Future of a Radical Price” (Hyperion; $26.99). The book, along with its road map to “free” economics in the digital age, is generating a lot of buzz (and a little controversy) in media circles.

Anderson is enamored with free. That’s why he’s distributing his book at no charge via Google Books, Scribd, iTunes and Kindle. That’s why he wrote it using Google Docs and a Firefox Web browser. “Everything else I do on this computer is free, from my email to my Twitter feeds,” he writes in the book’s prologue. “Even the wireless access is free, thanks to the coffee shop I’m sitting in.”

Anderson, editor of Wired magazine and author of “The Long Tail,” takes a valiant stab at explaining some of the 21st century’s more puzzling contradictions. For instance: How do Google and Linux make money giving stuff away?

The answer isn’t so tough, Anderson writes. Why do you think you get the cell phone free when you sign up for a two-year service contract? In other words, Google, Linux and a myriad of other “free” companies aren’t selling email or operating systems. They’re selling ads, technical support, premium services, customer demographic information — sometimes even something as trivial as T-shirts.

Free is the right price, Anderson writes. And it’s made possible by the rapidly shrinking cost of certain technologies, such as digital storage and transmission capacity. He argues that free is the natural state of an information economy. And strategies for profitability in information-based industries have to recognize and revolve around that key principle.

“You can make money from free,” Anderson writes. “People will pay to save time. People will pay to lower risk. People will pay for things they love. People will pay for status. People will pay if you make them (once they’re hooked)… Free opens doors, reaching new consumers. It doesn’t mean you can’t charge some of them.”

Free seems to be working for Anderson. Despite no-cost online distribution, his book is expected to debut on the New York Times’ nonfiction bestseller list. That could be because Anderson resisted the urge to delve too deep into the swamp of Internet economics, and instead came up with a book that’s a quick read, well phrased and full of strikingly insightful yet accessible insights into the inner-workings of a counter-intuitive business model.

That seems to be enough for most readers. But not everyone is applauding just yet.

The reaction from Anderson’s media-industry peers is more muted. In fact, their response has been the literary equivalent to raising an eyebrow and saying, “Why’d it take you 250 pages to tell us that?” For some, the collective yawn didn’t stem from rudeness, or even from boredom. It’s just that some see “Free” like a fistful of spaghetti stuck to the kitchen wall. It’s overdone. It was overdone a while ago. And every cook in the kitchen knows it.

News Corp. Executive Vice President Jeremy Philips took a few swipes at the book in a Wall Street Journal opinion piece earlier this month, saying “the overall substance of ‘Free’ is considerably less contentious than one might expect.”

Philips added: “In keeping with the ‘big new idea’ genre, Mr. Anderson strains to sound provocative, at times, but flirts instead with absurdity. He says, for instance, that ‘if it’s digital, sooner or later it’s going to be free.’ But his views are more nuanced than such sound bites suggest.”�

Anderson’s harshest critic turned out to be journalist Malcolm Gladwell, who took on “Free” in a knock-down-drag-out New Yorker article earlier this month.

“His advice is pithy, his tone uncompromising, and his subject matter perfectly timed for a moment when old-line content providers are desperate for answers,” Gladwell wrote. He then opines that Anderson is elevating the motives of large corporations like Amazon to the level of philosophical principle, and wonders if he means “the New York Times should be staffed by volunteers, like Meals on Wheels.”

Some might dismiss those criticisms as the frustrated grumblings of someone who made a good living from an increasingly obsolete business model, but reality doesn’t allow cut-and-dried generalizations. Gladwell’s assertion that “there are no iron laws” in the digital age makes sense, especially when coupled with evidence that paid content is thriving in some online industries.

Still, Anderson makes a strong case for free as an economic model, and while his book does dabble in “philosophical principle,” it’s rooted in a common-sense assumption that makes thumbing your nose a little harder: Free isn’t really free at all.

Anderson talked Wednesday with MCDM student Ross Reynolds on KUOW’s The Conversation. Listen here.