And Here Come The Attacks On 'Free' Economics
from the it-helps-to-actually-understand-first... dept
You had to know this was coming. With Chris Anderson’s latest book, Free, coming out shortly, reviews are starting to pop up misinterpreting much of the book, and making bad assumptions that have nothing to do with the book at all. The key problem? People who are so confused by the title that they think “free” means “no business model at all.” That seems to be the problem with James Ledbetter, who complains that Chris Anderson is a hypocrite for not making Wired Magazine free. Except… he does. It’s free online for everyone to read. You pay for the scarcity — the paper version (and even that is sold at a subsidized loss and made up by advertisers). If you understood the economic arguments in the book (i.e., free works really well for goods with a marginal cost of zero), then you wouldn’t even bring up the issue of Wired charging for the paper magazine. Then there’s an angry critique of Free in the New Statesmen, which starts out with a misguided attack on Anderson’s last book, The Long Tail, using a single study (whose methodology had some issues) as support. In attacking “Free,” the critic uses some guy who generated some computer models that insisted “free” doesn’t work. Yes, computer models. With that, apparently, we can ignore reality. Perhaps the problem was with the computer models?
This isn’t really a surprise, of course. When it was first announced that Chris was writing his book (which, contrary to the reviews above, is absolutely worth reading), I warned that by calling it “Free” people would, like moths to a lightbulb, focus entirely on the “free” part, and not the actual economic arguments behind it. Just as I had noted in the past that people seem to get screwed up by the concept of “zero,” they also get screwed up by the concept of free. It would be an interesting brain scan study to do, but it seems that many people’s brains run into something of a “divide by zero” calculator error when they encounter discussions of “free.” They get stuck at the “free” part and fail to get beyond it to see how you use free as a part of a larger ecosystem and business model to increase the overall market potential.