Malcolm Gladwell Challenges the Idea of "Free"

An anonymous reader brings us another bump on the bumpy road of Chris Anderson's new book, Free: The Future of a Radical Price, which we discussed a week ago. Now the Times (UK) is reporting on a dustup between Anderson and Malcolm Gladwell, author of The Tipping Point, Blink, and Outliers. Recently Gladwell reviewed, or rather deconstructed, Anderson's book in the New Yorker. Anderson has responded with a blog post that addresses some, but by no means all, of Gladwell's criticisms, and The Times is inclined to award the match to Gladwell on points. Although their reviewer didn't notice that Gladwell, in setting up the idea of "Free" as a straw man, omitted a critical half of Stewart Brand's seminal quote.

Comments

The biggest point, in my opinion

[phantomfive]

The biggest point, in my opinion, that Gladwell makes, is that you still need to find a way to make money. Both sides use the example of youtube, which gives away everything for free. However, they have infrastructure costs of somewhere around $300 million a year, which they haven't been able to cover with advertising. Will they be able to find a way to cover their costs, or not? I don't know the answer to that, maybe eventually.

I think Anderson is kind of stumbling upon a point an MBA told me once, that given enough time, all new technology becomes a commodity. There are a dozen word processors you can choose from, a dozen different types computers, a dozen types of memory to choose from, hundreds of flash game sites (which are free, but 20 years ago people paid real money for games just like those). So for the most part, things will get sold for a little more than the cost to create them (the MBA then went on to tell me a number of different techniques to 'lock in' customers to your product: trapping users with file format was one, there were many other more devious methods, and Microsoft uses many of them. I don't underestimate quality MBAs anymore).

What Anderson is saying is that more and more, marketers will use freeness to suck users in. This is actually common knowledge among marketers, they've been playing with 'free' for years, and they are really excited about it, and talk about it amongst themselves, and to anyone else who will listen. Basically Anderson is right.

What Gladwell is saying is that you still need a way to cover your costs. Basically he is right as well.

They are both right, and what's more, if you asked an MBA about this, they might wonder why you are arguing about such basic ideas. And if you ask nicely, they'll tell you tons more about things you never even thought of.