Malcolm Gladwell Challenges the Idea of "Free" 206
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kdawson
from the crying-out-from-a-world-of-hurt dept.
from the crying-out-from-a-world-of-hurt dept.
An anonymous reader brings us another bump on the bumpy road of Chris Anderson's new book, Free: The Future of a Radical Price, which we discussed a week ago. Now the Times (UK) is reporting on a dustup between Anderson and Malcolm Gladwell, author of The Tipping Point, Blink, and Outliers. Recently Gladwell reviewed, or rather deconstructed, Anderson's book in the New Yorker. Anderson has responded with a blog post that addresses some, but by no means all, of Gladwell's criticisms, and The Times is inclined to award the match to Gladwell on points. Although their reviewer didn't notice that Gladwell, in setting up the idea of "Free" as a straw man, omitted a critical half of Stewart Brand's seminal quote.
Captain Obvious (Score:3, Interesting)
The biggest point, in my opinion (Score:5, Interesting)
I think Anderson is kind of stumbling upon a point an MBA told me once, that given enough time, all new technology becomes a commodity. There are a dozen word processors you can choose from, a dozen different types computers, a dozen types of memory to choose from, hundreds of flash game sites (which are free, but 20 years ago people paid real money for games just like those). So for the most part, things will get sold for a little more than the cost to create them (the MBA then went on to tell me a number of different techniques to 'lock in' customers to your product: trapping users with file format was one, there were many other more devious methods, and Microsoft uses many of them. I don't underestimate quality MBAs anymore).
What Anderson is saying is that more and more, marketers will use freeness to suck users in. This is actually common knowledge among marketers, they've been playing with 'free' for years, and they are really excited about it, and talk about it amongst themselves, and to anyone else who will listen. Basically Anderson is right.
What Gladwell is saying is that you still need a way to cover your costs. Basically he is right as well.
They are both right, and what's more, if you asked an MBA about this, they might wonder why you are arguing about such basic ideas. And if you ask nicely, they'll tell you tons more about things you never even thought of.
Re:The biggest point, in my opinion (Score:3, Interesting)
Will Google as a whole be able to recoup value (financial or strategic) from Youtube?
Re:The biggest point, in my opinion (Score:3, Interesting)
There are more specific questions about how they could gain value from YouTube. Will Google, which reportedly uses a homogeneous infrastructure for all of its apps, learn important and valuable lessons from hosting a popular high-bandwidth site on that infrastructure? Will they gain important mindshare in other markets because of it? Will they learn important rules about search, user interaction, or advertising markets which they can apply to other services they offer?
Re:The biggest point, in my opinion (Score:3, Interesting)
Not true. You are considering only new hardware.
However, not far from my house is a technology recycling warehouse. For some labor or a donation, you can pick up essentially free parts and build a machine of your liking. People use it for all kinds of projects, from PCs to hybrid microcontroller projects.
Most of the new technology replaces something, pushing it into the used stream, then finally the waste stream. However, even outdated technology has uses. It's basically free and sits in a many of the nonprofit offices around me.
Re:The biggest point, in my opinion (Score:3, Interesting)
Now I am sure that my father in law's illness is worth at least a couple of grand to that doctor. Anything which tells google what is on my mind (say I searched youtube for CT scans of lymph nodes, a particular interest to me at the moment) helps them shake down that doctor for advertising money.
Hack vs. the Void (Score:4, Interesting)
Malcolm Gladwell is one of those people, not precisely stupid, but so shallow and lacking in insight that he makes Chris Anderson, who is simply a hack, look brilliant by comparison. Gladwell, lest we forget, specializes in gushing soft journalism pieces on people whom he has designated as "great". He's what I call a Mensa bottom feeder - he produces work for people who like to think about how smart they are, which is not how actually-smart people spend their time.
Gladwell wouldn't know what to do with an actual idea if he had one (I envisage a dog with a great piece of artwork [walrusmagazine.com], sort of chewing on it.) Now, Anderson's piece is competent hackery, which is better than most people could do I don't mean this critically, but something about it intersects with the sort of faux-highbrow pablum that Gladwell thinks he understands. This is very threatning to Gladwell - going back to the dog analogy, it's like he's got some glimpse of a world of ideas and there's a threat to him there that he can't really understand. Gladwell is getting good money to stick his nose up Bill Gates' behind and there's an army of other dogs willing to do that for free. So he lashes out in a rage, and since he can dimly percieve Anderson (but not the more interesting and provocative people whose work Anderson has extended), Anderson becomes his target.
Again, I have nothing against a competent hack. But I do have some real criticism for Anderson - seriously, you admire Gladwell?
Re:Captain Obvious (Score:3, Interesting)
I love how this guy discovers the obvious and then gets people to buy his books.
Well, his talent is that he can talk. His ideas aren't "obvious"; in fact, I sometimes doubt that he is correct. His books don't employ the level of rigor that Freakonomics, for example, uses. But he has interesting ideas and explains them well. That's why his books are best sellers.
Re:The biggest point, in my opinion (Score:3, Interesting)
Re:Extended Summary (Score:2, Interesting)
Forget long term. The real question facing is is whether intellectual property has any value whatsoever. While various arguments may have sufficed in bygone days, in the digital age it's hard to justify how something which has unlimited supply can still have a non zero price. As technology improves and it becomes trivial to copy and distribute movies and even vast databases, this question will only become more pointed.
Personally, I think that we will need to sacrifice the idea of copyright protection for profit in order to protect the idea of copyright protection for moral purposes.
Matthew Yglesias' take: Summary (Score:3, Interesting)
Damn, you beat me to it. To your link [google.com], I'll add the abstract of his post:
Where Anderson goes off the rails is his suggestion that the "give it away" business model is actually a promising business model.
Competition is good for customers because it destroys profits. The way you make real money is by getting into situations where you're insulated from competition. Meanwhile, as market sectors turn to a Free business model, they're just going to become way less lucrative.
Example: YouTube loses money. But since Google as a whole can easily afford to cover YouTube's losses, it's hard to see Google management shutting down a market-leader. As the underlying technology gets cheaper the scale of the losses should get smaller, making it ever-more-realistic to run the business at a loss and thus ever-less-likely that a pay-to-play vendor can move in and charge monopoly rents.
That's the real lesson of Free. The combination of competition, the near-zero marginal cost of production, and the customer draw of zero pricing means that the market-leader in video is bound to lose money. To win the market, you need to make your product Free. But while your marginal cost is near-zero, it's not actually zero, so you're losing money.
Re:Captain Obvious (Score:3, Interesting)