Chris Anderson is the editor of Wired, one of my favourite magazines. He has written two great books based on HBR articles. The first was “The Long Tail” – an awesome concept (Google it). Now, he has offered us another view of how the Internet is changing the world. It’s “Free”. A deputy editor at The Economist (my favourite magazine of all) has written a review. You can read it here, or below. Buy the book at Amazon.co.uk or Amazon.com or Kalahari – South Africa.
Chris Anderson is a guru of the information age. Under his editorship, Wired, the voice of the digital world, has won zillions of prizes. His speeches on the economics of the internet command vast sums. He’s a brilliant journalist; I know that, having worked with him before he was a big shot. But it is as an author that Anderson has gained most fame. He writes, broadly, about how digital technology has made the world a better place. His first book, The Long Tail, was hugely influential. In the bricks-and-mortar world, it said, in which the costs of marketing and distribution are high, companies make money by selling vast quantities of a few blockbuster items. In the digital world, in which the costs of marketing and distribution are low, companies can make money by selling small numbers of lots of different items.
This idea appealed to everybody. Business people liked it because it seemed to explain to them what to do about the baffling business of the internet. Creative people liked it because it implied that they had a better chance of making money from their slim volumes and weird music that hardly anybody wanted to buy. Cultured people liked it because it implied that book, music and film buffs would be able to enjoy not just the latest blockbuster, but also the German philosophy, 18th-century folk songs and expressionist movies that make up the long tail of the distribution curve. It’s a great idea and an optimistic one. Unfortunately, data have recently emerged that seem to undermine it. An analysis last year in the Harvard Business Review of online music and movie retailing suggests that it is just as dominated by blockbusters as is offline retailing.
Free is another examination of how digital technology is changing life and business, this time through the spread of what the book’s subtitle describes as “a radical price” – zero. Businesses based on offering free stuff aren’t new – broadcast television and radio, for instance, entertain viewers and listeners for free in return for their attention – but there’s certainly more free stuff around than there used to be.
Free stuff is spreading because of one fundamental difference between the bricks-and-mortar world (which Anderson calls the world of atoms) and the digital world (which Anderson calls the world of bits). In the world of atoms, each item is expensive to produce and distribute; in the world of bits, it costs close to nothing. This has all sorts of consequences. Pricing models become infinitely variable. Copying costs almost nothing, so piracy mushrooms. People can create stories, songs and movies and distribute them to other people, gratis. The collapsing costs of production and distribution are both benefiting consumers and killing companies. Wikipedia, for instance, offers the world, the universe and everything in detail to anybody with an internet connection, while destroying the encyclopaedia business. File-sharing has brought costless pleasure to millions while threatening the existence of record companies. Piracy has introduced millions of Chinese to the joys of Hollywood films while making it virtually impossible to sell music, software or recorded music in the country.
Newspapers have two sources of revenue – advertisers and readers – and the internet is taking away both. Advertising works better online than in print: try finding a room for less than £100 a week in a non-smoking, girls-only flat on the Victoria Line on Craigslist, then try the same through print. For readers, news is newsier online and not just because big companies like Google provide it free. People, increasingly, tell each other what’s going on: Twitter and Flickr have been the best sources of information and pictures on the Iranian unrest. The migration of advertising on to the internet and the proliferation of free information may be killing the newspaper; many local papers in both Britain and America have shut down. Some of the spread of free stuff was predicted. When the world started to go digital 15 years ago, clever people in the music and film businesses were frightened because they knew how much easier it would make copying. But some of it is entirely unexpected. Wikipedia and open-source software, for instance, are the products of something that has floored economists – that people enjoy doing, and will do for free, all sorts of things that other people regard as work.
In this way, and in most ways, the spread of free stuff makes the world a better place. The demise of newspapers is a sad thing, but as the Iranian unrest shows, digital technology is a far better way of spreading information about governments’ misdeeds than print is. Technological advance always kills old businesses, as the Luddites knew, but consumers benefit, new companies get created and mankind moves on. Yet there are dangers implicit in new ways of doing things and this book illustrates them.
Free observes an interesting phenomenon, but doesn’t take the reader far beyond the notion that there’s a lot of free stuff about. It pulls together information about current trends and is dotted with abstruse bits of learning – divergent views of competition among 18th-century French mathematicians, for instance – which seem to be there more to lend the book intellectual heft than to strengthen its arguments. But it doesn’t have the weight of a fully worked-through idea. It ends not with a discussion of where this trend is leading but with “50 business models built on free”, presumably addressed to the businessmen who may be attending Anderson’s speeches on the subject.
The book’s weakness may lie in its origins. Like The Long Tail, it started life as a Wired article which Anderson blogged about and people commented on. No doubt there are advantages to having readers contribute to research, but it may be that the old-fashioned method, which requires a lonely author to think hard about an idea, works better in the end. And has Anderson been using free stuff a little too freely? The Virginia Quarterly Review has found similarities, including an erroneous date, between passages in the book and in Wikipedia and other online sources. Anderson attributes these “screw-ups” to his failure to find a good way of citing web sources. He is right that free stuff has made the world a better place, but it has its pitfalls.
Source: Guardian newspaper reviews