Free is the New Black
Jim Kirk - "We don't."
-from Star Trek IV: The Voyage Home
Imagine that. A world with no money. It's closer than you think. Or is it?
Over a hundred years ago, a bottle cap salesman in Niagra Falls was given a life-changing peice of advice by his boss - invent something that people use and throw away. Several years later, while shaving, King Gillette came up with an idea. What if instead of a hard to maintain straight razor, he could make thin, cheap razors out of bands of metal. They get dull, throw them out. The first year of production wasn't exactly banner - in 1903 Gillette sold 168 blades and 51 razors.
Then he had a banner idea - sell them to the Army dirt cheap. Soldiers would get accustomed to them and want them when they came home. Then he came up with a better idea. Give people free razors. Then, they would have to buy his blades.
Thus, the idea of cross-subsidizing was born. Give away something that should be expensive for free, and people (Lemmings that they are) will pay big money for something that should be cheap. We've all done it. We get our free cell phone so we can pay for our big wireless plan. We make our expensive coffee in our free coffee maker at the office. We download a free CD that makes us want to pay ninety bucks for a concert ticket.
And so we have a paradigm for the new century - in the words of the Red Hot Chili Peppers, "Give it away now." Why. Because things keep getting cheaper. Don't believe me? You're looking at an example right now. Carver Mead is a pioneering computer scientist, who coined the phrase "Moore's Law." A corallary, he said, was that the cost of a transister will half every 18 months. And he was right. Computing power is so cheap these days, that we literally "waste" the vast majority of our once-precious computing cycles. Check you're CPU monitoring utility. Unless your are running some distributed-computing program like Boinc, chances are your "System Idle" number is around 98%. I actually run Boinc on my desktop, so my cycles are at 100% all the time, but Boinc uses 98-99% of the cycles. We waste cycles all the time with animated cursers, floating icons, transparent windows and other eye-candy.
Imagine the nuclear community was right, and electricty became so cheap in was practically free. No one would worry about "greening" their homes. Everything would run on electricity! Electric heat. Electric water heaters. Electric cars. Dependence on fossil fuels would drop to nil, and the world would be greener. Global warming? What's that?
Arts and entertainment are the next big free thing. After all, the aliens running Hulu are very happy to give you your TV online, all the time, for free. Network websites all put their shows online soon after they air. I watched "House" on Hulu the other day. I had the choice of one long commercial at the front, or several small commericals during. (I chose the former and got a snack.) I have never watched an episode of Kings on the TV. (And I have a DVR) But I've seen them all.
Online music. Where do I get started? In this great article from The Working Musician, blogger David Hahn actually argues for file-sharing. He makes several good arguments, but this one nails it: "But consider this - 'professional musician' wasn’t a career created by the phonograph. The musician industry has been around as long as humans have, but recorded music is, relatively, a very new invention. Mozart never sold a record. Beethoven never released an album. Yet they made careers as musicians."
More and more, we see artist following this changing paradigm with their new original music - "Give fans the recording, and they will pay to come see me perform it live." Which, really is the goal for a working musician, anyway. To play in front of people, not just a microphone. Back in the day, selling recordings was the only way a blues player from Alabama was going to get a guy in London to hear his music. Now, we can hear anyone's music, anytime. And physical recordings cost lots of money. There are printing costs, duplicating costs, distribution costs... As we get close the completion of Gospel Light Worship's album, we understand that we are going to need to make physical copies of the record, as much of our (hopeful) audience has not yet fully embraced cyber-delivered music.
Is the idea of "intellectual property" going by the wayside? Maybe not, but the whole model is about to change. In the future, the value of information will rise the more you give it away. Take Twitter. It's been around for a while, has millions of users, is growing by leaps and bounds. But, Twitter has no viable revenue model. It makes no money, it charges users nothing. Is is sustainable? Not in the current economic model. Someone has to pay for all that bandwidth and all those servers. But sites like Twitter, the Internet Archive, Google and more show that free can be good. Free works.
Some models exist that expand the three-party economics of the media (content providers "give away" content, and advertisers foot the bill). Some models say "We'll give you X, but you pay for Xplus. (Or in most cases, Xpro.) There are folks who actually send money to open-source software developers. Altruism isn't dead, it just hasn't been given much of a chance lately. And economies of scale take on epic proportions in a wired world. "Digg"ing something takes you a second to click. But to someone, those click statistics are worth big bucks. You get content for free, they get their data.
Milton Friedman said that there's no such thing as a free lunch. But there is, if someone else is picking up the tab, and anyway, the bologna is cheaper every day.