[image from nicely85, licensed under creative commons]
Back in March, I wrote a piece critiquing Anderson’s model of the “Freeconomy,” calling it a fallacy. My critique was not necessarily of the models he was proposing, but the way he was conflating things that had no cost with things that were “free.” I argued that rather than being “free,” no-cost goods and services (such as YouTube, facebook, etc) in fact were not giving anything away, but rather exchanging services with its users for things such as data, labor, attention, and social capital.
The debate around “free” as ramped up since then, with Malcolm Gladwell’s review of Anderson’s book in the New Yorker, where Gladwell takes Anderson to task through a series of examples of services and information that are emphatically not free:
The biotechnology company Genzyme spent five hundred million dollars developing the drug Myozyme, which is intended for a condition, Pompe disease, that afflicts fewer than ten thousand people worldwide . . . in this case, information does not want to be free. It wants to be really, really expensive.
And there’s plenty of other information out there that has chosen to run in the opposite direction from Free. The Times gives away its content on its Web site. But the Wall Street Journal has found that more than a million subscribers are quite happy to pay for the privilege of reading online. Broadcast television—the original practitioner of Free—is struggling. But premium cable, with its stiff monthly charges for specialty content, is doing just fine. Apple may soon make more money selling iPhone downloads (ideas) than it does from the iPhone itself (stuff). The company could one day give away the iPhone to boost downloads; it could give away the downloads to boost iPhone sales; or it could continue to do what it does now, and charge for both. Who knows? The only iron law here is the one too obvious to write a book about, which is that the digital age has so transformed the ways in which things are made and sold that there are no iron laws. (Gladwell 2009)
Anderson then responded by explaining that “free” also encompasses other forms of non-monetary payment that may in the long run lead to monetary payment:
* Wired.com makes good money selling ads on GeekDad (it’s very popular with advertisers)
* Ken gets a nominal retainer, but has also managed to parlay GeekDad into a book deal and a lifelong dream of being a writer
* The other contributors largely write for free, although if one of their posts becomes insanely popular they’ll get a few bucks. None of them are doing it for the money, but instead for the fun, audience and satisfaction of writing about something they love and getting read by a lot of people.
So that’s the difference between “paying people to write” and “paying people to get other people to write”. Somewhere down the chain, the incentives go from monetary to nonmonetary (attention, reputation, expression, etc). (Anderson 2009)
Many others have since jumped in the fray, including Valleywag’s slightly meta take on the accuracy of some of the numbers cited by Gladwell as well as the perhaps ideological frame of the debate itself. Perhaps more interesting is the piece at continuations that attempts to disaggregate some of the fuzzy economics behind “free.”
I will probably have more in-depth and articulate thoughts in the near future, once I polish off a draft of some of the transnational television research I’m currently mired in. But for now, I’d simply like to suggest that part of the problem and part of why we can’t seem to come to an agreement about the complex economic models being build online is that “free” is simply the wrong way to talk about it.
This is similar to the way “viral” media masked the agency of the users, thus preventing us from thinking clearly beyond whether or not something “goes viral” to how and why and for what social and cultural reasons. “Free” masks the systems of value-exchange that are in place in all of these models. Moreover, as Gladwell points out, it is not a matter of information simply “wanting” to be free:
And then there is his insistence that the relentless downward pressure on prices represents an iron law of the digital economy. Why is it a law? Free is just another price, and prices are set by individual actors, in accordance with the aggregated particulars of marketplace power. “Information wants to be free,” Anderson tells us, “in the same way that life wants to spread and water wants to run downhill.” But information can’t actually want anything, can it? Amazon wants the information in the Dallas paper to be free, because that way Amazon makes more money. Why are the self-interested motives of powerful companies being elevated to a philosophical principle? But we are getting ahead of ourselves. (Gladwell 2009)
These so-called “free” services are entangled with a number of players: content creators, users, platforms, advertisers, etc. All of whom have different investment, different needs, and different desired outcomes. Rather than paying attention only to one criteria of value — monetary cost — by calling it free, and ignoring all the other criteria and social contracts that are in play, we have to start looking at what different systems of value exchange are being enacted every time something is offered for “free.”
In just looking at Youtube, you not only have the exchange between the service and the content, data, and attention provided by the users. You also have an exchange of those things with advertisers. You also have a number of social exchanges between the users themselves, as they build communities and social capital through uploading content, commenting, responding, and sharing. And these are just some of the most immediately visible forms of exhange, each of which follow their own criteria of value and parameters and regulations. And more importantly, the are all interconnected and dependent upon one another. To gloss over it all as “free” ignores the complexity and the deeply entangled nature of both monetary and non-monetary exchanges. The iron law of the digital world isn’t that everything is free, it is that everything is connected, including different forms and systems of exchange.