Continuing my thoughts from my previous post The Marginal Cost of Creativity & Free…
One of the more interesting concepts that a creative can easily lose track of while reading “Free: The Future of a Radical Price” is before going through the decision process of how to employ “Free” tactics, one should assess if they’re aiming to take part in a market of abundance or scarcity. This is quickly glossed over in Chris as he’s all too eager to speak to the market of abundance because this is how he sees the majority of products online. Art on the other hand excels in a market of scarcity, particularly fine art. If Monet had painted the same impressionistic painting 1000 times, the value of some of his most famous paintings would be quite less than the tens of millions of dollars they fetch at auction today. While the creation of digital photography is considerably quicker than creating a painting an artist can still control the number of reproductions or manage which markets that photo is displayed & sold with in. When one displays a low resolution version of an image, painting, etc. it doesn’t preclude that you’ve opted to take part in a market of abundance, although there are many online who argue otherwise when issues of copyright infringement arise.
Here is where I find so many people on the Internet become confused. Chris is all to eager to perpetuate the widely held belief that “Information Wants to be Free”. While this may be true for many types of information, its not true of all.
As a creative are you in the market of information or art?
Abundance vs. Scarcity
This is where the paradox lies for artists. Marketing tactics, particularly social media marketing, can excel in an “Information Wants to be Free” model, but our end product, art, is one that excels in a market of scarcity. Good marketing can be a double edged sword expanding exposure to ones work while being consumed by many believing that “Information Wants to be Free”.
If you’re not marketing product, but your creative brand or services then the concept of “Information Wants to be Free”will work well for you. Broadcasted media such as videos, podcasts, slideshows, etc. excel in this environment. Such media is created to be seen and spread and not always purchased. In this vein of marketing Chris Anderson is on target increasing the number of eyes that see your work may increase the likelihood you get more jobs or sell more product.
Expanded exposure and the perception of information wanting to be free has the potential, as many creatives have seen, to generate issues in relation to copyright infringement. Much of Chris Anderson’s argument for free tends to rely on a philosophy of copyleft. Copyleft designations fuels the spread, use and remixing of online content. Creative Commons, whose laxest licenses embrace a copyleft stance, works only as well as those that use it, but it certainly works well once you get past a rigid attachment to your work. (see Creative Commons, Only As Good As Those That Use I)
Here lies another key decision, built on the last, as you determine whether to take part in a market of abundance or scarcity. How attached are you to controlling the rights of your work? If you’re not too attached to them or your willing to let some control go in the hope of increasing exposure you’ll find value with little cost. On the other hand if you’re aiming to tightly control the rights of your work then you’re likely to gain little value from free and endure up front cost in enforcing ones rights if/when it is infringed. Unfortunately infringement is all to common online where so many now believe all information is or wants to be free. That being said… in the end as a Copyright or Trademark holder there may be value in the long run enforcing ones rights, but how much value is subjectively determined by the courts if it gets that far.
Equal?
Earlier I noted the observation that Chris Anderson’s argument for free treated all businesses and industries as equals. Clearly not every business is equal, but in many ways the Internet can put most businesses on equal footing in terms of cost of distribution. The key point of conversation missing in “Free” in relation to this concept is the notion of scale. While the mechanisms of distribution are fundamentally equal, the ability to mass produce, mass broadcast and manage messaging/product are not. Again feeding on the earlier question of “are you aiming to be in a market of abundance or scarcity?”… your ability to make a profit using models outlined in Free are dependent on your ability to pursue a volume business model. Pursuit of greater visibility, site traffic, use of a “free” offerings… all to expose and entice people to actually pay for something you create & sell. Ease of distribution yields less value for smaller operations with limited resources competing in an attention/volume focused business. Larger companies are poised to nearly always have an advantage in this situation with deeper pockets, more employees and trusted brands. Smaller businesses need to factor in scale (resource availability, audience size, potential sales, etc.) and perhaps target niche markets, but with such an approach in combination with Free will you end up distracting yourself? Evaluating which side of the fence you fall on regarding scale and volume would seem to me to be an important factor in determining how “Free” fits into any business plan.
Time vs. Reward vs. Value
Adopting a business model embracing Free requires a good amount of thought and strategy factoring in time, reward and expected value. Is the time and effort to offer something for free going to be enough to be profitable? Are you going to net enough revenue to warrant the time and resource expenditure? Marc Cuban wrote a great article titled “Succeed by Free, Die By Free” and is a must read if you’re considering “Free” as a business tactic. In his article Marc argues that while people are burning time, effort and money figuring out “Free”, companies developing a customer base that provides solid revenue will be there standing at the end of the day. In addition, the undoing of Free will be Free. Competitors, new, old, big or small, will come out of nowhere to challenge a company using Free as a business tactic and only those with enough cash flow will be able to survive. Food for thought as consideration is given to the merits of Free.
Now that I’ve had my say on the topic, I’m curious to hear your take on the concepts of Free as discussed by Chris Anderson. I look forward to reading your comments.
Previously Discussed: The Marginal Cost of Creativity & Free
[tags]Chris Anderson, Free, Review, Free: the Future of a Radical Price[/tags]
Jim: This is a been a great, well written series. Congrats! In reading the whole series, I gotta say that for me, the real hard hitting key came in the last paragraph on the last page under the Time vs. Reward vs. Value equation, and the notion of an established customer base.
I have seen many creatives interpret free to mean that all intellectual property is meant to be free, and thus the only result is that everything should be given away for free, forever, to everyone. Obviously, that’s simply wrong, and thanks for not perpetuating that myth 🙂
1) Could you clarify or expand on “art … excels in a market of scarcity”? Could I equate art to “highly differentiated content”?
2) “your ability to make a profit using models outlined in Free are dependent on your ability to pursue a volume business model.”
Not really. If you consider free as a marketing tactic and a pricing strategy, leveraging the principles of free is largely independent of scale or volume of the revenue-side of the business, and more important to the cost-side. Remember the issue isn’t really scale to the entire market, just scale to one’s addressable market: small and large companies need not play in the same, homogenous market.
The far more important part of evaluating how to use “free” in a business plan is determining *what* you sell, not *how much* of it you sell.
3) One issue with Cuban’s argument: “free” IS one way to develop a customer base, if you use it as a marketing strategy and have other, non-free products to sell. “Free” is not a binomial “yes, I’ll use it v. no, I won’t use it” choice, but merely one tactic among many in one’s business strategy.
4) You’re spot on that the key is to evaluate the time, cost, and expected returns from strategies using “free” before blindly diving in. Too few creatives are thinking about the nuances of free and how trends largely beyond their control are changing their businesses. Fighting the “problem” of free won’t get anyone anywhere.
…of course, it somewhat depends on whether you’re buying or selling !
Seriously, though, the underlying point here is basic economics. If you believe that your product/service should be free, then you’ve misunderstood the notion of value and the willingness of buyers to pay to meet their needs.
This is particularly true if you know that you are in demand and you insist on producing material without charge. There’s a name for that kind of person, but I’m too polite…
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