Some Things I Learned from Chris Anderson’s FREE: THE FUTURE OF A RADICAL PRICE

The latest from Chris Anderson, of The Long Tail fame. And like The Long Tail, it’s pretty upbeat about the trend it takes on: the increasing prevalence of free as a price. But, unlike The Long Tail, I’m left feeling unconvinced.

This could have a lot to do with having read Malcolm Gladwell’s critical assessment before picking up the book.

Anderson spreads himself really thin in a short book (short at least for the topic). And the bare parts show in many cases. For example, musicians facing the loss of CDs as a revenue stream, can only hope to be compensated by incessant touring or becoming Madonna-famous and sign a 360-deal. Journalists, where media institutions are undermined by opinionated crackpots freely blogging in bathrobes, can only hope to excel with their craft so as not to be compensated for practicing it, but by becoming a teacher and teaching it… and be compensated by teaching the crackpots how to write. How you get crackpots out of their bathrobes to register for a journalism class is beyond Anderson’s willy-nilly scope.

But because it is a short read, it’s still worthwhile to pick up. Anderson writes well enough, and he’s in touch with many of the examples of “free” pricing strategies and their effects that this book still still qualifies as a good start. Here are a few things I learned:

• We are drawn to free because of our fear of loss. Drawing from Dan Ariely’s awesome behavioral economics book, Predictably Irrational, he references Ariely’s study with the chocolates and insights on why people seem to overvalue that which is freely offered. He spends on day selling 2 kinds of chocolates: cheapy Hershey Kisses for 1 cent and fine Lindt chocolate for 15 cents (way below market cost). People are kind of split and go for both. The next day, gives away the Hershey’s and sells the Lindt for 14 cents. Even though there is rationally no difference between the comparable values (14 cents), people pretty go for the free Hershey’s… not considering the value they get for the Lindt at 14 cents. I tend to think it’s just that people don’t want to bother trying to find the 14 pennies. But Ariely feels it’s that people fear loss. In our minds, by not paying, we risk nothing, so nothing will be lost.
• Each new abundance creates a new scarcity. When you have free video games or music, you end up with scarce free time and attention. The excessive corn production has given us a lot of cheap crappy food, but not a lot of affordable and diverse produce or healthy people.
• Information wants to be free and expensive. That famous annoyingly ridiculous cliche that information “wants” to be free is only a part taken from a paradox observed by Stewart Brand (counterculture dude behind the Whole Earth Catalog … which established the theory which created the WWW). He was discussing the ways in which information exists in this free-expensive paradox, it wants to spread meme-like, but it also creates/produces value. Anderson interviews him and asks why he gives information agency in the quote. Stew anthropomorphizes information because “it’s more poetic that way.” I can’t for the next programmer dude to tell me what information wants to do.

Anderson also references Lewis Hyde’s The Gift, which I’ll say again that this book will blow your mind and should be read immediately.