Freeconomics

What a delightful word to describe the increasing need to talk about the economics of free stuff. As strange as that idea sounds, it is the subject of a recent article in Wired magazine called “Free! Why $0.00 is the Future of Business.” Besides coining the word “freeconomics” (as far as I know), author Chris Anderson describes the forces that drive prices in the digital world down toward nothing. He identifies two important trends that tend to make the Web “the land of the free.”

First, there is the phenomenon of “cross-subsidies,” where a product or service is given away for nothing in order to create an income stream somewhere else. Anderson uses the example of King Gillette, who gave away his safety razors in order to get men hooked on using them and to make money selling the disposable blades. As Anderson points out, the Internet provides greater freedom for businesses to make money from one set of customers while giving things away to another. Advertising supported Web business are only one of many examples.

The other trend Anderson identifies is “simply that anything that touches digital networks quickly feels the effect of falling costs.” He provides a nice discussion of why the cost of Internet communication is approaching or has reached the point where it is close enough to free so that we can “round down to zero.”

Anderson’s article ends with a “taxonomy of free” that describes five business models built around a base price of zero.

What has this to do with scholarly communications? We are already seeing the pressure towards free for all kinds of intellectual property on the Web. Music, of course, was the first IP commodity to head to zero, and it did so before distributors could catch on and move to a zero-based business model. Now the music companies are scrambling to find ways to add value to music in order to move customers back from the lure of $0.00. That is a very difficulty task, needless to say.

As the same pressures are exerted on digital scholarship, those who make that scholarship available, whether traditional publishers, libraries or individual scholars, need to plan ahead for how they will at least recover basic costs as the price of access falls. If we sit on our hands and deny that this is happening, we may well witness “the end times for tradition journal publishing,” as was recently predicted in Inside Higher Ed.

The issue is going to be how to add value to what could be obtained for free, in order to recover costs. To guide us, here is one more article about “freeconomics” — In “Better than Free, Edge columnist Kevin Kelly suggests eight “generatives” that can move a product past free to a point where consumers will pay something, not for the product necessarily, but for the value that comes with it. Kelly’s discussion of these “generatives” — immediacy, personalization, interpretation, authenticity, accessibility, embodiment, patronage and findability — should be required reading for those who advocate, consider or foresee that move toward free access to scholarship. Even if we fear it, we are likely to have to deal with it. The ability to add value along the lines that Kelly suggests may keep us and the scholarly apparatus we have grown familiar with over the years afloat in the age of freeconomics.