Wired editor Chris "Long Tail
" Anderson has written a long rant for Wired, introducing his next book: FREE. When I read The Long Tail
(which explores the new markets that get opened by cheaper and cheaper cost of manufacture, distribution and marketing), I thought it was fantastic, right up to the part where Chris started talking about stuff that doesn't cost anything to copy, digital goods like music and ebooks and so on. As I read that chapter, I thought, oh ho, a divide-by-zero error! The market for digital goods isn't a market for goods at all: since the potential customers can choose to get all digital goods for free on the darknet, the digital goods market is actually a digital services
market: what iTunes Store and the rest sell is the service of getting the digital files in a way that's easier, smarter, or faster. The end "product" is the same (actually, the end product is often superior when you download it for free than when you pay for it -- the paid-for versions are often crippled with DRM, something that file-sharers thoughtfully remove for you before uploading).
So Free appears to be an exploration of the Divide-By-Zero problem in the Long Tail, and it's the kind of thing we really, really need:
This difference between cheap and free is what venture capitalist Josh Kopelman calls the "penny gap." People think demand is elastic and that volume falls in a straight line as price rises, but the truth is that zero is one market and any other price is another. In many cases, that's the difference between a great market and none at all.
The huge psychological gap between "almost zero" and "zero" is why micropayments failed. It's why Google doesn't show up on your credit card. It's why modern Web companies don't charge their users anything. And it's why Yahoo gives away disk drive space. The question of infinite storage was not if but when. The winners made their stuff free first.
Traditionalists wring their hands about the "vaporization of value" and "demonetization" of entire industries. The success of craigslist's free listings, for instance, has hurt the newspaper classified ad business. But that lost newspaper revenue is certainly not ending up in the craigslist coffers. In 2006, the site earned an estimated $40 million from the few things it charges for. That's about 12 percent of the $326 million by which classified ad revenue declined that year.
US court records are not copyrighted, but the US court system operates a paywall called “PACER” that is supposed to recoup the costs of serving text files on the internet; charging $0.10/page for access to the public domain, and illegally profiting to the tune of $80,000,000/year.
Semihandmade started out as a Los Angeles cabinetmaker called “Handmade,” but when they got a commission to design aftermarket doors for a cheap and surprisingly robust set of Ikea kitchen cabinets, they realized that they could supply excellent-looking, high-spec kitchens at a tiny price by just manufacturing replacement doors for Ikea’s ubiquitous cabinetry.
The mystery of yesterday’s India-wide censorship orders which blocked the Internet Archive from the world’s largest democracy has been solved: it was the result of complaints by two Bollywood studios, Prakash Jha Productions and Red Chillies Entertainment, who chose to target infringing copies of their movies by securing an injunction at the High Court of […]
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