Freeconomics: What about MY cost for YOUR free?

Am somewhat amazed by the backlash against Chris Anderson’s new Wired piece, “Free! Why $0.00 Is the Future of Business“. Charges that he wrote a “communist manifesto” were probably the harshest ones, but many people I’ve been talking with, both in person and virtually, share somewhat of that same opinion: “something is wrong if you have to give away your value” and “we can’t all make money by grabbing mass numbers of eyeballs in order to deliver advertising to them.”

They’re missing his point and he missed one I think he shouldn’t have.

Anderson’s “it’s the falling costs, stupid” premise can be summed up in this paragraph taken, ironically, from his article in the Economist magazine:

The dominant business model on the internet today is making money by giving things away. Much of that is merely the traditional media model of using free content to build audiences and selling access to them to advertisers. But an increasing amount of it falls into the free-sample model: because it is so cheap to offer digital services online, it doesnt matter if 99% of your customers are using the free version of your services so long as 1% are paying for the premium version. After all, 1% of a big number can also be a big number.

 Free is a major shift and a huge trend, especially with any sort of online service. If you thoroughly read Anderson’s article in Wired you may or may not buy into the argument he makes, and may even accept his premise that free is driven primarily by the fall in producer costs as the costs associated with delivering them continue to drop online.

But wait just a minute.

The entire Freeconomics premise of the “trend of free” doesn’t even touch on one, considerable cost: the cost burden borne by users who choose the free. This “trend of increasing user costs” is what I believe is the increasing costs of our time, energy and effort investments. This increase is caused by an ever greater amount of free stuff and, especially, as all of these free offerings require an ever increasing investment by us in both effort and attention.

How many video sites can you join and participate in? How much attention can you pay to one, two or more social networks? Can you invest in more than one or two scrapbook or slide creation sites? How about project management? Then they all send you emails with their new feature-of-the-week, you discover a better version of what they offer elsewhere, and so on.

Yes, I realize that we can do a lot more in today’s free, hosted, Web 2.0 or “read/write web” world and I wouldn’t trade the accelerating human and machine global connections for anything. But I couldn’t let slide Anderson’s obviously missed point about we participants out here and what we have to spend to participate in the free.

Most online offerings are premised on a participation culture doing what they do best: participating with free value in order for the producer to gain a critical mass of users and a small percentage of those who step-up to premium services. But the problem comes when these offerings expect participants to be happily climbing their learning curve on YANFT (Yet Another New Free Thing) just because it’s free, filling out profiles, inviting in their friends, building and sharing their creations or aggregated content, voting on some article submission and then — after investing all of that initial energy and effort — maintaining and paying attention to all of these offerings.

Oh….and could we participants please click on some ads while using the free thing?

All of this participation comes at a cost not factored into Anderson’s article. It should’ve been since it’s real and is at the core of why we’re seeing “participation fatigue” (evidenced by posts like this Facebook Fatigue? one driven by recent revelations that major social networks are slowing).

Ultimately this fatigue — and general ignoring of costs borne by users to participate — will be at the core of more Web 2.0 offerings entering the deadpool and company “let’s harness the collective intelligence” initiatives failing.

After all, how many sites can you participate in and either get work done or have a non-virtual social life?

3 Comments

  1. PXLated on February 27, 2008 at 3:54 pm

    Couldn’t agree more…the cost of “participation” can be high. In my case, it’s been too high and I’m rapidly backing off.



  2. Alain Thys on February 27, 2008 at 10:09 pm

    Hi Steve, nice way of indicating that there is no thing like a really free lunch and that your attention has a value too.

    Only point is that – while I can’t speak for Ilya – I wouldn’t necessarily consider the communist comparison as an “attack”, yet more of an “observation”.

    I haven’t yet – shame on me – read the article, but objectively speaking there simply are a number of parallels between what Marx has been writing about and how social media are evolving.

    Also, as Chris lived in Guangzhou for a while he has a pretty nuanced view of communism, so will see the humour of it.



  3. Michael Long on February 27, 2008 at 11:17 pm

    You’re correct in that one can only participate in so many fan sites, read, hear, and see so much “free” content, and so on. Factor in Sturgeon’s Law, where 90% of everything is junk, and you have the beginnings of a serious problem.

    Oddly enough, what we often forget is that this is just one of the things we PAY producers and publishers and editors to do for us. Filter out the junk. Even so, a lot gets through, but if you’ve ever read the slush pile at a major publishing house, you’d begin to realize just how valuable a service that becomes.

    Some people have time to wade through all of the trash, others pay for convenience.



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