Chris Anderson, editor of Wired, has a new book, “Free,” coming out in July. It’s not free, it costs money. Malcolm Gladwell, who has written many books that have contributed to one-word business-speak, wrote a review of Anderson’s book in the latest issue of The New Yorker. He didn’t like it. Now, Seth Godin, another author of many books, says Malcolm’s wrong.
It’s a guru slap-down!
With all due respect, they are all wrong to one degree or another. Each also is partially correct. Casting this discussion as an either/or is misleading, the trivialization of the real issue by people who no longer have to worry about making the first step into publishing. For a writer, though, giving away books is not the solution to jump-starting a career as a published author (there is a big difference between being a writer, which anyone can do, and being an author, which anyone can also do), it’s the beginning of building a living, a small business that, in all likelihood, will never be a big business.
The future of business will not be built on a price point, but the value delivered and the cost of delivering it. This isn’t a binary challenge that will be answered by giving away news and entertainment. Gladwell accurately deflates Anderson’s sweeping statements, which were laid out in a Wired feature last year, “Free! Why $0.00 Is the Future of Business.” In his review of the upcoming book from Anderson, Gladwell writes:
His advice is pithy, his tone uncompromising, and his subject matter perfectly timed for a moment when old-line content providers are desperate for answers. That said, it is not entirely clear what distinction is being marked between “paying people to get otherpeople to write” and paying people to write.
The first sentence is clever and could equally be applied to Gladwell’s definitive answers to questions about decision-making in “Blink” and “The Tipping Point.” A simple statement, such as this from Anderson’s Wired article can be very attractive to desperate publishing executives seeking to compete with the rapidly declining cost of publishing, which kicks aside barriers to competition from virtually anyone on the planet:
The new model is based not on cross-subsidies — the shifting of costs from one product to another — but on the fact that the cost of products themselves is falling fast. It’s as if the price of steel had dropped so close to zero that King Gillette could give away both razor and blade, and make his money on something else entirely.
Gillette adds blades to its cheap razor refills to justify high prices, not because it is cheaper to add blades to the Mach III. Low costs are exploited to raise perceived value (now, with 50 blades!) and profit margins. It would be nice to think industry works solely in response to economic formulae out of the goodness of executives’ hearts, but life doesn’t work that way, even when everyone is “pursuing their passion.”
Gladwell’s last sentence, which is in bold above, cuts to the explicit assumption in Anderson’s article, that the cost of products is falling so fast that prices become irrelevant. This is true for media markets only if you believe that people will no longer earn a living from their work, which they apparently will have to give away to get attention. Gladwell is correct that at some point, people need to get paid to produce work on a consistent basis. Doing journalism, for example, is expensive. The people doing it for free will eventually realize the value of their contribution and ask for compensation or simply quit and go back to the work that makes them a living (they may, of course, continue if the effort yields political or social prominence, but they will never trade a living for influence with no path to a good living, and we get crooked press and politicians out of that market configuration).
Yes, as Seth Godin argues, “In a world of free, everyone can play.” We can all play writer, but when does becoming a writer actually become a living? If we’re going to assume that all writing will be made and delivered at no cost to the reader, how will the writers put a roof over their heads, food on the tables and kids through college? Writing has never been a great living, but it was a living if one worked hard at it. “Free” only turns the wheel of commerce so far, then the cost of playing perpetually for little or no compensation drives out the creative forces that power the marketplace.
Godin underlines his “everyone can play” point with the non-sequitor, “When there are thousands of people writing about something, many will be willing to do it for free (like poets) and some of them might even be really good (like some poets). There is no poetry shortage.”
Poetry does not carry a cost of proving accuracy, authenticity of information and delivering consistent coverage of a topic. It’s the perfect example of a product produced by millions that can, if produced by a genius, enjoy a huge windfall of profits for the author. But it is not representative of the creative work of writers, comics, analysts and reporters that actually drives the information economy. The same statement would not work if “poetry” were replaced with “journalist” or “writing” and “poet” with “making steel” and “steel worker,” respectively.
I could certainly start a blog called “BooksAhead.com” in order to sell copies of my upcoming book about the future of books and publishing, but it isn’t cost-less and I recognize I am making an investment with significant risks. Unlike the three of these guys having an argument about how much writers and entertainers will be paid for their work, I do not charge $30,000 for a speech. Nor do I work for a magazine that would like to see me become prominent, as I once did. Now, I run a business, part of which earns money from publishing.
Media marketplaces are immensely nuanced. Information or entertainment can be valuable as a unit of exchange or an incentive to begin a profitable relationship. It can also be a low-cost or subsidized experience. It can pave the way for speaking gigs that pay ridiculously high fees, as well.
Godin’s right that “free” is a great promotional price, it gets attention. Godin’s wrong, though, to think that the first step in customer engagement and service is the end of the business. If the attention is deserved the cost of the attention-getter is probably higher than $0.00. It will certainly cost more than nothing to replicate the feat, so examples of overnight sensations created by, for instance, YouTube performers, is not representative of a real business. Businesses are built on the ability to repeat a process. Processes cost money. The logical outcome of this argument is that all media will be ad-sponsored, which is also Gladwell’s response to Chris Anderson’s “Free” thinking: “Broadcast television—the original practitioner of Free—is struggling. But premium cable, with its stiff monthly charges for specialty content, is doing just fine.”
Advertising isn’t a comprehensive solution, either. Godin makes an important point, the most correct of the broad statements that characterize this argument:
Neatness is for historians. For a long time, all the markets for attention-based goods are going to be messy, which means that there are going to be huge opportunities for people (like you?) able to get that most precisous asset (our attention) for free. At least for a while.
We do live in a time when audiences or communities, whatever you decide to call people engaged with an author or idea, can be reconfigured quickly and cheaply. That undermines previous marketing strategy because it eliminates the opportunity to exploit one’s advantage by earning money from all the attention over a long period of time. In a constantly churning market, “Free” is just a way to destroy your competitor, but it doesn’t make a business sustainable.
I tend to think of this as a historian caught in the midst of great events might, attempting to see ahead to understand the significant causes of potential outcomes. We can see opportunities for revolutionary change, but we cannot be carried away with them, because that usually leads to more upheaval as forces of counter-revolution don’t simply lie down and die. Instead, taking in all the data of the times, weighing it against the realities—economic and cultural—in which our investments are made, we must recognize when we are headed for our own demise if we do not adjust our costs to meet the price that will be paid by the market.
Books went through similar crises of economic and cultural conflicts as they displaced scribal reproduction and sought a sustainable processes in an age when print made ideas “infinitely reproducible.” Book prices collapsed because of over-production of a few titles early in the print era, forcing a flowering of new works to come into their own that made publishing profitable again. Piracy in the 15 Century through 18th Century, for example, resulted in many flawed copies of books, misattributed ideas and conflicts of information for readers, who decided to pay for the confidence they built in publishers and authors. The outcome was an industrial process that has narrowed the entry to mass markets, an economy that is changing now. It was not evil, it simply institutionalized lopsided compensation for a few writers and publishers, the ones who profited making books. A different order is emerging now, but the basic problem of earning a living remains.
Everyone I know wants to make a living. So, I can only assume that is still the dominant challenge of economic life. It won’t go away. In the end, everyone needs to make a living, payment will remain a factor in any media business and every product manufacturing market, as well. Free stuff and free content may be one marketing tool we can use—it certainly is important to know when to go “free”—but it isn’t the only element of a business plan.
That doesn’t mean Gladwell’s right about the high cost of being immutable, either. He is correct in his conclusion that there are no iron laws. The market is in the midst of an intense renegotiation, one that is bizarrely concerned with rewarding big companies instead of individual contributors to information and entertainment. “Free” rationalizes the businesses of companies capable of achieving scale at the expense of the creators of works and products that fuel that profitable scale. I, therefore, side more with Gladwell than Anderson and Godin, though Godin’s the most pragmatic of the three.