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June 29, 2009

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Michaelc

The big problem I see with the idea of community based journalism is that the level of expertize in both specific subjects and in reporting methodology is likely to decline because of the lack of specialization. In the same way that a mechanic who works on cars every day has an advantage in expertize over the weekend tinkerer. This might not be a problem in that people in finance will tend to write about finance and people in entertainment will write about that.

Chris

Equating contributors of geekdad to the challenges facing journalism as it relates to a healthy democracy is somewhat silly. Are the writers for this blog the same folks covering the wars overseas, scandals in local politics and uncovering the Bernie Madodfs of the world? No. It's bread that amateur writers are finding avenues and being discovered, but this is largely a completely different career angle and with respect to journalists who seek out the truth for the public at large, if they are lost, our democracy as a whole weakens.

Carl

I find it funny that for the last 100 years or more we have been happy to pay a nominal fee for a daily paper, why didn't the news firms put a very small fee for online content, and only distributed content to sites that also charged. It seems everyone was too busy trying to be the free guy, and not looked at the elephant in the room...who's going to pay?

Tom

I'm no Malcolm Gladwell, but the GeekDad example doesn't really answer any questions, it just evades them. Some questions to ask:

a) Are niche websites or blogs equivalent to an investigative news outlet with career journalists and reporters in foreign countries? Could a niche site like GeekDad (or maybe InvestigativeDad?) have broken Abu Gharib or MyLai or the Pentagon Papers?

b) So if the model is free+paid, why isn't YouTube making money (or how will they)?

c) Why does it have to free (or free+paid) or bust? Why can't it be paid, and free, and free+paid, and everything else?

d) How is something digital "free" when in has to be stored somewhere in a data center - and that takes cooling costs and electric costs and contributes carbon back in the atmosphere?

e) Is "Free" being given away via Kindle or anywhere?

Those haven't been answered persuasively.

Alex Tolley

Gladwell is just reiterating the case for capitalism, even as it's underpinnings - the organizing of scare resources is being undermined. Information abundance is what is driving it's price to zero. That is not a bad thing, it is good. What it means is simply that people who made a living from information scarcity and it's control can no longer do so.

Gladwell wants to then pick holes in the idea of whether it is possible to have everything else for "free" using a straw man argument. But physical stuff being free might be possible...someday. The point is what is the implication for the structure of society when that happens? Maybe your replicator takes care of most of your needs for the cost of power. But what about things you need help with, e.g. actually constructing a dwelling - how will that be achieved? We don't know. But that doesn't mean that this cannot happen, just that how we organize society will have to change.

When everyone can live like kings, non-material things will define status. It's going to be an interesting world.

rob

I share a tiny corner of your optimism, Alexandra.
But you're wrong to say:
"if instead of selling that album through a big corporation she had a record deal with, she'd given it away. She'd be out no money "
unless she can record and master an album for nothing. It CAN be done in a bedroom with a few cheapish tools, these days- but to do it well still requires levels of skill, time and technical nous that are very rare to find in any one person- let alone one who is also a writer, singer, muscian, marketer and tee-shirt designer...

Staring at Strangers

What's happening these days with free content is exactly what happened when television became a mass-medium in the 1950's. Everyone predicted that it would be the death of radio, but surprise!, radio is still with us today in 2009.
There have been several other new technologies introduced that the experts predicted would supplant older technologies, but they haven't. And I ask you, why the heck is faxing still around?
Downloading movies on the Internet haven't replaced DVD's, but they might . . . or might not.
And to me, free content is part of a new technology, because without the new technology of the Internet, etc., it couldn't exist. Face it, without all of this new technology, we'd be back to handing out flyers on our local street corner.

As Chris Anderson says, he is not predicting that all paid journalism will fade away.
However, I do believe that Malcolm Gladwell raises an interesting point about YouTube. This free service is losing about $500 million a year, and its owner Google is still scratching its head (does Google have a head?) over how to make money with this thing. Part of it's plan now is to buy content for the YouTube site, so it's clear that free is not always the answer (nor is Mr. Anderson saying that it is).
There is news content that I will almost always appreciate reading from paid journalists rather than "volunteers." While the missives smuggled out of Iran by ordinary citizens are certainly dramatic and to some extent informative, a professional paid journalist will take the time and have the resources to develop the whole picture, check sources, and write a thorough report, not just a report that focuses on what just happens to be that particular journalist's personal experience with the subject matter.
So a Geek Dad probably can write just as good an article (or perhaps even better) as a professional journalist about the experience of being a Geek Dad, but might be a bit overwhelmed by putting together a comprehensive report on the current situation in Honduras.

Ian Betteridge

pwb says, of Chris' point: "It's that stuff that's digitally reproducible at near-zero cost will trend towards Free."

Yes, but "trend towards" doesn't equal free. In fact, it will *never* be free, because neither distribution not content creation are zero-cost activities. Slice any cost you like up between as many different people as you want, and it will never become zero. It's the "too cheap to meter" fallacy all over again, as Gladwell points out.

You can see this from YouTube, where content costs Google bucket-loads of money to distribute - and YouTube is trapped in a free model which makes it impossible for them to make money at the moment.

On the revenue side, as long as the bandwidth/server capacity demands increase at a percentage rate that's higher than revenue increases, YouTube can never make a profit. YouTube could sell 50% more ad inventory this year - but if its server/bandwidth costs increase at 50% or more, it will continue to lose money. In effect, YouTube's ad sales team have to run to stand still, which is difficult in a recession. And, of course, in a recession "free" becomes more powerfully attractive to customers - which means it's likely that Google's server costs will go up rather than down.

Of course, YouTube could adopt a model which limited the growth of its bandwidth/server usage according, recognising that these are scarce resources. The method we usually use to allocate scarce resources is called "pricing"...

Steffen Konrath

I doubt if the problem of the newspapers is really loss of "monopoly of consumer attention". Indeed some German newspapers have a growing subsriber base.

BUT: ad revenues are decreasing. That's a completely different issue. It's not about attention of consumers but attention of advertisers. Companies like Facebook are much more on the radar screen of advertisers (Marc Andreessen: "Facebook revenues will pass $500 million in 2009", Businessinsider.com).

Newspapers business models need to take that into account. - Steffen Konrath, journalist

Mark Lefens

Anderson is smart enough to know where the pain is in the news delivery business. And he's smart enough to exploit it for his personal gain, even if it's only personal fame (or the $29.95/copy he wants for the appendices to his book). What he lacks is an understanding of the value folk even less intelligent than him place on trustworthy information and the supply chain required to deliver it. Finally, he seems to have missed the fact that as the amount of information proliferates, editing, not aggregating, will be the currency of the realm. And currency is what a hustler like Anderson is ultimately looking for.

Jeff Singer

Typically, the reason people do things for free is because they're in a "startup" situation and the money isn't coming in yet. When you started GeekDad, you were likely a startup and needed the free writers because you didn't have the revenue to pay them. But, now that (according to you) GeekDad is "making good money" it's criminal that the people providing the content aren't now reaping the rewards for the very thing that is making GeekDad "good money." Who's pocket is the money going into if not the content providers? Especially since it's the content that is creating the revenue... I'm pretty sure people aren't going to the site to look at a blank page.

So, I guess we're looking forward to a future where the few make their living off the labor of others. I'm not stupid, I know that's how its pretty much always been to some extent... but now you're just trying to rationalize not paying the creators at all.

Gareth Lymer

Chris

Thank you for bringing the ‘FREE’ strategy to the fore.

On 17th March 2008, I read your Wired article re Free and after reading it I felt intrigued by the potential applications. As a first step, I decided to experiment by starting a website sharing my experience in the children's indoor play market where I had worked for 10 years.

One thing has led to another and not only have we shared (for Free) content that previously required a relationship with a supplier, we have become a platform for the sharing of information between stakeholders and enabled transparency and comparison regarding supply.

The experiment continues to provide interesting results and we are finding that the more open information becomes, the greater the possibilities to improve markets by creating new value for all concerned.

In terms of future planning, I would suggest that most organisations will need a strategy with regard to Free to complement their Premium offering or a variation thereof and a way to monitor and manage their on-line reputations; it is unlikely that the first strategy will be correct or sustainable once new competitors form.

In our experience, the value of developing such a strategy is that it enables (forces) you to be open to more than one possibility of what the future may look like in any particular industry and be better prepared if someone else should enter you market and offer for Free something for which you charge.

Although I agree that information 'wants to be free' (and often is whether it wants to be or not), people will still be willing to pay to experience a high level of personalisation, timeliness or some other element that they determine is of value, these would seem to be examples of the Premium element you outline.

Thanks again.

Gareth

@shareandcompare

McSimilian

At least part of the problem could be seen in the absence of a payment solution. Digital money if you will. They tried this number of times with webmiles and alike, but actually miles in any form lack some qualities of money.
But until now you cannot make people pay amounts so little and easy that they do not even think about asking a friend to send them her copy of the digital good for free instead. But isn't this what we need?
There is no solution for effectively asking for a digital dime, and in the end receiving something like at least 9ct of it, because there is no solution for paying a digital dime easily and securely. But in the world depict, lots of people would use it to make digital business with it.
Think about an official digital dime. This a genuine public task (like the provision of cash, which itself is costly too):
1. The paymentsolutionproviders’ share places a lower threshold to the amount you can ask for the sale of any given digital good and keep some the money.
2. The trust issue of money (webmiles, Lindendollar)
3. The infrastructure behind it is complex (if you think it through)
Approaching this as a genuine public ie. governmental task, would lead to a world, where the journalist still can earn money (but in a more entrepreneurial role) but the institution newspaper would still die (more slowly) due to the 20thcenturiness of its cost structure.

Allan Hoving

What will settle this still-hypothetical argument is the adoption of a simple yet flexible system for collecting payment (I propose one at PayCheckr.com). Then it will be up to audiences to decide whether they want amateurs for free or pros at a fair price.

JR M

Well, the problem is that everyone who has a beef with what Chris was saying doesn't seem to get his idea.

Yes, you give things away (when they don't cost you anything, or next to nothing), so that you can sell other things for a profit. - It's nothing short of turning your services into marketing material for your other services.

Marketing material use to be brochures and fliers, etc, but why not have it be great works that could stand on their own, capitalized for profit on other related works. Makes perfect sense.

From the business point of view, it's really about Marketing in the New Media Marketplace, and from the consumer point of view, it's about getting more for less, everyone wins!

Now, if I could just get plane tickets as marketing tools from the airlines, then I'd be set!

Dunk Sb shoes

it's very difficult to discuss this with the one of the hypesters, since their job consists of coming up with ways of selling it, not analyzing it. That is, if it were wrong, they'd have to find something else to flog.

dofus power leveling

"Man, Chris. You got owned. I'm glad you didn't address anything Gladwell said in his article and instead just quoted him summarizing your views and threw out another example of a 'free' or 'freemium' business model to be discredited. Because that's the best way to carry on an "intellectual debate between corporate cousins"; avoid the arguments and throw out non-sequitur examples."

I believe he know this kind of threatened

Janet

Ok, I just dropped about $30 to read a book called FREE. 'Cause I wouldn't wait for the library to get it in (in which case my marginal monetary cost would have been 0) or for Amazon to deliver it (which would have cost me something but not $30). So I sure better read it and think of something intelligent to say!

Palpatine

I recently read a enlightening article concerning bloggers and Journalists. The article states that blogs and free journalism HELPS professional journalists instead of hurting them..

Anyways, check it out, it's a great read.

Blogs & the Life of Journalism: Welcome to the Jungle
http://www.geeksaresexy.net/2009/05/12/blogs-the-life-of-journalism-welcome-to-the-jungle/

Dave G

Dear Chris,


I certainly appreciate your ideas and enjoyed the Long Tail- thank you. I will also buy Free, and have no problem with buying,even though I know its available for nothing.

I agree with some that said that your reply to Malcolm Gladwell didnt address all the points he made- but I think you're certainly closer to the truth that he seems to be.

As you said at the RSA, this is early days and people seem to demand instant, across the board, adoption and success. In fact, its another fascinating and rule-breaking development that will eventually become part of the norm. Exactly how, when and for what will be fascinating to watch (and take part in!)

Bill C

I heard Chris speak at Revenue Bootcamp yesterday. Seems to me that the internet is a godsend for those that can write. Most of us can't. I can't imagine what it would be like to have a following where people read what I write, even if it is free. Talk about the pressure to continually write compelling and interesting stuff. Journalists need to shut the .... up and learn to write naked. Meaning that their content is judged on the merits of the content and not the mast head on their business card. I like reading what Chris has to say. I like reading what Malcolm has to say. I like even more when I can sit ring side and hear what they have to say to each other.

Graham Bower

Spoof: How can buses be Free?

http://www.secondomics.com/blog/?p=65

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David Snodgrass

Wow. So many haters. I think many of you need to actually read/listen to the book as Chris does not put it so concrete as Malcolm and everyone else is spouting [btw the book and audio book are both avail for free so you have no excuse]. You're all making yourselves look very Bush/McCainish to those who have actually taken the time to read it or even pieces of it. I'm just wondering why? Can you not Read Baby Read before you make comments?

Daniel

It seems that most of the criticism revolve around whether Free will take over current business models or not.

And the answer probably is that it will, in some cases, and it won't, in others.

Freemium is a successful model in many areas, while it will hardly be applicable or practical in other areas.

Ernest

Chris, if you read Gladwell's review again (and in full) he didn't say he doesn't understand the difference between paying someone to write and paying someone to get someone else to write. He merely pointed out the reasons (or the fact that there're stakeholders e.g. companies like Amazon & Wired who want information to be free) behind the possibility of paying someone to get someone else to write. Whether an amateur writer is good enough has nothing to do with his point, although it does relate to whether people WANT to look for quality in what they read and regard as journalism. At the end of the day there will still be people who want to read journalism that's accountable, and that has to be at least in part based on editorial quality.

The point Gladwell makes, leading off from the passages you selectively quoted him, is information does not itself want to be free, nor is there any economic gravitational pull that makes it want to be free, but there're stakeholders who do. Put this way, the loss of the newspaper industry will be the gain of entities like Amazon or Wired, if they had it their way. You didn't offer any riposte on that in this post.

Gladwell's review is also a comprehensive critique of your many other arguments - e.g. on Youtube, and on products made of ideas are going to get cheap faster - for which you simply have no answers for. Hard not to make us think you're not avoiding the argument then.

You haven't replied to half his comments Chris. Will the real Free please stand up?

Chris Anderson

Ernest,

If you think there is no economic gravitational force that makes digital information tend to be free, you either haven't read the book (have you?) or have missed some basic lessons of marginal cost pricing.

And as for YouTube, I thought it was very telling that not a week after Gladwell's review, Google announced that YouTube was losing less and making more than the critics had guessed; indeed they said it was heading towards profitability in the next year. My response wasn't intended as a point-by-point rebuttal; I just focused on one point where Gladwell seemed particularly parochial and out of touch with the rise of effective amateurism online.

BTW, in the weeks since I wrote this, GeekDad as more than doubled in traffic. Last week it got nearly 2m page views, which is in the same ballpark as the entire New Yorker.

Giorgio Burlini

Dear Chris,

I take the example of The Economist to comment on your and Malcolm's debate around free or paid journalists.

The Economist, which I subscribed few years ago, as experienced a growth in advertising revenue of about 25% during 2008, in the midst of the biggest recession of half a century, and in a shrinking advertising market.

Why? Because people where looking for "professional and impartial" explanation about a phenomenon which was taking the world by storm. While "generic" newspaper where falling like flies, The Economist professional input and reputation (they forecasted troubles in the CDO market firstly in 2005), help them to win more and more paid audience.

I am personally very happy to pay for people to sit there all day and become real expert in their own field. The problem is that too many newspapers have no experts, and just a bunch of people regurgitating someone else badly written and scientifically poorly researched product.

These people I am not prepared to pay, neither as I can see, my fellow readers.

So the argument should not been "free" or "paid" or "freemium", but very good, thoroughly researched content (which requires a full time study) or everything else. I bet that people will always pay for the former and less and less for the latter.


Hanad Ismail Ali

I have two simple points to make.

1 - the value of content is down. To put it in terms that are
appropriate for today's climate, its in a bull market. 20 years ago,
there was only so many daily newspapers you could get -if you lived in
a small town, maybe 8 or 9 daily papers. If you wanted to read
something every day, your choices were VERY limited. Today, your
choices are, literally, endless. There is so much content out there
that the value of having a product(daily copy) that had little
competition just a couple of years ago is next to zero. There is
content everywhere, all the time, from anyone. Newspapers aren't
special any more.

2. The cost of creating a newspaper - paper, shipping, etc. - doesn't
exist on the web. Content is being delivered infinitely more
efficiently online. So if newspapers choose to deliver content the
most expensive way they can, they can't really blame the public for
not playing along.

One of the problems with print was that there was no clear way to know
WHAT people were reading. Did they buy the newspaper for a specific
column? Was is the crosswords? sports? The industry didn't concern
itself with that and for some reason they can't seem to seperate
individual pieces from the whole. The web can tell you exactly what
writers are getting the most traffic. Content providers need to use
that.

Here is hypothetical and I would love if Chris would comment on this:
If I was running the Hanad Post and I had 30 bloggers, I would make
the top 5 bloggers above 100,000 weekly hits, subcriber only.
Everything else would be free. Once every two months, the latest blog
piece of each of the chosen 5 would be free to everyone. This will
attract more readers. Every six months, the bottom 5 would "get cut"
and be replaced with a new crop. Over time, my roster should be full
of highly-read bloggers. And maybe, after a while, I charge for each
blogger - so instead of paying $4.99 a month for 5 bloggers, readers
can get any of the top 10 at $0.99 each. That way they pay only for
the ones they read.

I believe people will be willing to pay once you PROVE to them that
your content is worth it. In the internet age, you can't deliver
content as a bundle any more. Each piece has to be able to stand on its own.

John R. Sedivy

You make a great point. Recently I cam across an article called "Want To Co-Write On CakeJournal?" (http://www.cakejournal.com/archives/want-to-co-write-on-cakejournal) which was basically a call by the blog author for volunteers to provide content for her site. At first glance, I dismissed it, but after further reflection it seemed to make sense to me for the right person.

Ideally someone looking to get their name out there and try their hand at blogging without the overhead of creating and maintaining their own blog. In addition, this blog contains a built in audience and ranking, which the volunteer would not have to build from scratch. Not to mention having the difficulty of working a solo project - but having a partner to keep the volunteer going. To me this example reinforces your point that there are non-monetary forms of payment and money is not the only motivator of quality work.

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Dan Owen

I'd argue that there is a market failure taking place here -- perhaps a necessary step in the process of "creative destruction," but a real failure nonetheless. The failure derives from the fact that freeloading has tangible benefits but intangible costs. Reading the NYT online for free creates a kind of externality that is not yet being priced in the market. That externality is the drying up of the advertising revenue stream that pays reporters' salaries. Freeloaders -- like the paper companies of old who dumped the waste product of the manufacturing process in the rivers adjacent to their mills -- are protected from paying the cost of their behavior.

I think that newspapers have got to play an extremely difficult and costly long-term game of brinksmanship, and they need to start as soon as possible. That means turning off free access immediately and suffer the consequences over the short-term. The market has got to establish the price of original reporting, which means seeking its value to readers. Readers are saying -- like paper companies -- that it's value is zero, but that's not really true. It's simply that the market price at the moment is zero, and the business model is built around that. It's no use saying, "imagine a different business model" as long as input prices aren't likely to change.

Malcolm Gladwell -- whose writing I love -- is an interested party. He'll suffer under the current regime. You, Chris, aren't -- Wired picks up revenue from online advertising under the new system, and ad money from print advertising under the old system. You have nothing to lose from the process of creative destruction. That's why you're free to imagine a different world.

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Internet marketing

In short, Chris is right, Malcolm is wrong.

Affiliate marketing

I doubt that, but hey, everyone is entitled to their own opinion.

Strani jezici

I agree with you, Chris

Tom Hartley

As noted by Mike M. above the new 'distribution' channel of the internet changes the rules of the game. When we acknowledge how easy it is to transmit electronic information we accept the inevitable: copyright and intellectual property laws are limited in their scope; but art will survive.
http://www.orato.com/business-career/chris-andersons-free-sparks-debate

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Slimming Pills

Nobody making money from the old rules wants the rules of the game changed - unless there is some new, clear way that they can make money with the new system. There are still some vestiges of the dot-com bubble, frontier economy of the internet that allow the big winners (google) to speculate on new concepts and skew the marketplace indefinitely by sustaining unprofitable ideas (youtube). I think these things will stabilize in a few years and out-of-work journalists will have more opportunities online.

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Tidbits

The Long Tail by Chris Anderson

Notes and sources for the book

FREE was available in all digital forms--ebook, web book, and audiobook--for free shortly after the hardcover was published on July 7th. The ebook and web book were free for a limited time and limited to certain geographic regions as determined by each national publisher; the unabridged MP3 audiobook (get zip file here) will remain free forever, available in all regions.

Order the hardcover now!