Lots of coverage about Chris Anderson's new book Free, which have triggered a few thoughts. Should be noted that I haven't read it yet, and won't be doing so unless someone gives me a copy. (That's not a point of principal, more that I thought The Long Tail was an overly strung-out magazine article).
'Free' makes it difficult for people to associate a value to things…
The basics of a lot of modern life is the value that a price puts onto things. Why does an Audi cost more than a VW which costs more than a Skoda? Primarily because people are willing to pay the difference.
If you put a price tag of zero onto a commodity, then many people can struggle to see what it is worth to them. I guess that this is a possible challenge for the freemium model that is emerging today… I quite like Spotify, but not enough to pay a tenner a month. If I had had to have paid a fiver to get access then I might be liking it a lot more than I do today.
The value of low latency…
Something I haven't seen coverage of in Free is the varying value that the same piece of information can have depending on when it is received.
I used to work for Reuters, and much of their business is still based around delivering lots of information very quickly indeed. The prices of stocks, shares, currencies and commodities is fairly easy to get a hold of, but companies are willing to pay big premiums for reducing delay by milliseconds.
In the consumer world, there are similar examples… It could be argued that Murdoch made his inroads into the UK TV market through punters' willingness to pay for live football, and TV soaps still regularly create 'must see' moments that defy the current fashion for delivering TV on demand at a time that suits the viewer.
Free makes sense if it is someone else's content…
An interesting comment picked up in a Wired UK article about how Murdoch is now trying to introduce charging for content. All these companies trying to develop what are effectively new channels would say that stuff should be given away for free, wouldn't they?
Commitment to providing a service…
If I sign up to the free part of a freemium service, it feels like a very one-way contract. What sort of commitment does the supplier make to me as a consumer? The answer, generally, is nowt until I start paying…
This supplier-biased contract, however, can filter through heavily into even the “premium” services. A criticism of the Google model for applications (Google Apps, etc) is whilst the technology is strong, the supporting services (customer service, account management, support) are not particularly well conceived at present. For the individual, this might not be an issue. For corporates, it will be.
mmitII 