So much for the land of the ‘Free’

DG Creations, HBO, networks, recession, TV, Writing

freecoverLatest blow to Chris Anderson’s argument that Free stuff always prevails — feevee subs are continuing to hold their own in this wretched economy, despite more cost free alternatives than ever. HBO and Showtime execs proudly touted this fact at the TV press tour last week, just days after Anderson’s grumpy interview with Germany’s Spiegel went viral.

Among the bon mots in that interview: “Free is the force of gravity.”

Don’t get it? Let him explain: “If we decide to resist it then somebody else will compete with something that is free. The marketplace follows the underlying economics. You can be free or you can compete with free.”

He then argues that Wall Street Journal “cleverly” uses free content to convert people to paid content — a variation of his argument in the book that HBO uses free content on YouTube to drive subscriptions. Neither tracks. People subscribe to HBO and the Wall Street Journal because they value the quality of the content. Other outlets haven’t been able to succeed with the same argument, but that doesn’t diminish either the WSJ or HBO’s achievement: Sometimes consumers ARE willing to pay, other times they aren’t. In fact, as The Wrap points out, feevee channels are doing well at a time when broadcast nets are struggling.

Sheesh.

Earlier: Glad she asked: ‘Free’ prodder; ‘Free’: A paradox of expediency

Glad she asked! ‘Free’ prodder

Books, digital media, N.Y. Times, Writing

Deborah Solomon, she of the penetrating questions, took Chris Anderson to task for l’affaire Wikipedia in yesterday’s NYT, eliciting a revealing exchange.

First she asked whether he considered plagiarism an extension of his freebie thesis, which batted down thusly:

“I wish I could explain all my actions as being intellectually consistent, but this one is just plain old sloppiness. There are questions about whether one should cite Wikipedia, and I’m one of those who think you should.”

Nice slight of hand: He starts out on a self-deprecating note, then asserts a sense of honor about, of all things, crediting Wikipedia in a supposedly rigorous economic treatise. Luckily, Solomon calls him on it.

“Frankly, if you want to be a public intellectual, you shouldn’t be using Wikipedia to research a book of ideas in the first place,” she observes.

Anderson’s less than satisfactory response: “The level of scholarship and analysis on Wikipedia is improving by the day, and we ignore it at our peril.”

Again, note the self-righteous tone. Anderson clearly has the power of his convictions.

Solomon also touches on the quality issue, which bugged me so, noting that people have proven willing to pay subscription fees for HBO, but Anderson rejects that model as so 15 years ago. “The marketplace wants free,” he parries. “Consumers want free, and if you decide to set up a subscription service, then your competitor will make a free one.”

Did I miss something here? Is HBO really suffering because of the free TV or Web programming? If anything, struggles to replicate earlier programming success — a quality issue — seem to have been the issue. And I won’t even reiterate the iTunes example. Oh wait, I just did.

‘Free’: A paradox of expediency

digital media, Writing

freecoverRaced through Chris Anderson’s “Free” online and while I’m not as critical as Malcolm Gladwell, I do have several issues with the book.

1. Anderson lets the book and mag bizzes off lightly. Is this because he wrote the book before the market REALLY took a dump, dragging both industries down along with the already cratering newspaper biz? Or is something more disingenuous going on here? After all he has a stake in both worlds as editor of Wired and book author. Anderson states that “books are a special case of print, like some glossy magazines, where the physical form is still preferred by most. The book industry is not in collapse, thankfully,” he continues, but this has not stopped “hundreds of authors” from experimenting in free with video interviews and the like.

That’s simply not true. The economic slump has hit the mag and book biz hard. Few glossies have been impervious; Wired has certainly taken its lumps, as outlined by the NYT not too long ago. Anderson himself alludes to disappearing bookstore shelves and newspaper book review sections shortly after this pronouncement.

This isn’t the only selective interpretation.

2. Anderson’s so blinded by his celebration of Free that he gives short shrift to counter phenoms. As convincing as he is describing how content creators and consumers can benefit from giving away their goods, he never really adequately explains why certain consumers willing pay for goods readily available for free elsewhere. King Gillette gave away razors to build demand for razor blades, just like the makers of Jell-O gave away free cookbooks to seed demand for the floundering dessert product. But Apple charges for music that can be found elsewhere for free, and sells millions of portable media devices at a healthy price.

Anderson argues that Apple is a beneficiary of Free because so many play free MP3s on iPod devices, and attributes the popularity of iPods to their storage capacity. “Before the iPod, nobody was asking to carry around an entire music collection in their pocket,” he writes. “But engineers at Apple understood the economics of abundance.” Supply created its own demand, he concludes.

This passage suggests Apple alone saw the market for portable MP3 players, when in fact Apple entered the market well after its competition and succeeded by selling, and marketing the hell out of, a sleek easy to use player. Apple doesn’t try to undersell the competition; it tries to create products consumers have got to have.

HBO follows much the same approach. But Anderson chooses to focus on the pay channel’s use of free clips on YouTube rather than its ability to command a premium. Never mind that free online clips are standard marketing procedure in Hollywood.

3.  Anderson never adequately addresses where quality and aesthetics fit in the Free equation. He does acknowledge Hulu’s popularity, and ability to draw more advertising than YouTube due to consumer appetite for professionally produced content. But mostly he  fixates on the tension between abundance and scarcity. It’s true that the digital revolution has lowered distribution costs tremendously, making it possible for amateurs to compete against the pros. If information really wants to be free, as Anderson argues, companies like Apple and HBO wouldn’t be so successful charging for their content.

Stewart Brand, who originally popularized the phrase, calls this apparent contradiction a paradox, noting that the tension between free and expensive information is what makes it so interesting. What’s more, he tells Anderson, “paradoxes keep themselves going because every time you acknowledge the truth of one side you’re going to get caught from behind by the truth on the other side.”

In other words, good luck pinning this down.

To give Anderson credit, he does a good job explaining the psychology of free and various returns content creators get from free goods. Besides traditional third-party exchanges (advertisers for access to viewers), there is “Freemium,” wherein creators up sell consumers. Bloggers, meanwhile, use “gift economy” to parlay the recognition they get from their free posts into paid assignments and speaking engagements.

Anderson practices what he preaches: He makes money from speaking engagements and has made this book briefly available for free online; he primed the pump with a cover story in his magazine. He also kept his own costs down by relying heavily on Wikipedia, a free but hardly unimpeachable source, then got into hot water when the material was not properly attributed in the book. Unfortunately his penchant for repurposing devalues “Free.” Is a book so readily available elsewhere really worth $26.99? Especially when it already seems dated? So much for its subtitle, “The Future of a Radical Price.”

As Virginia Postrel writes in her cogent NYT review, “the book is less about the future than the present and recent past, which Anderson surveys in a cheerful, can-do voice.”

There is much to be sorted out in the digital transformation of our culture. Too bad Anderson doesn’t see the value of quality control in the new land of the Free.