George Parker: There’s No Such Thing as a Free Lunch!

Seems like Chris Anderson may have another best selling book on his hands with “Free: The future of a Radical Price.” Except he’s going to give the digital version away for free, which means it won’t be exactly a best seller, more like a best give away. Wonder where that will go on the New York Times best seller list? Anyway, the editor of Wired, which used to be a good mag, ‘til it sold its soulgeor for a potage of booze, car and entertainment advertising, has come up with this brilliant theory that the way to succeed in business is to give everything away, then make money convincing fucktards to buy virtual martinis and teddy bears. Does anyone out there remember when we were destined to become a “service economy,” the one were no one actually made anything any more? Well, in truth, people still made stuff, but they weren’t Americans, ‘cos we actually had the fucking nerve to expect a living wage.

Anyway, moving on, Anderson’s amazingly simplistic argument, is that hardware and bandwidth costs have been reduced to close to zero, so that in fact, that they can be rounded down to fuck all. Meaning, I guess that all those giant server farms out in the middle of the desert run on fresh air. Interestingly enough, another best selling member of the digerati, Malcolm Gladwell, (The Tipping Point) has written a review of Anderson’s book in the New Yorker, saying basically that he’s full of shit. With no apparent sense of irony, this piece is free on the New Yorker website, most of which content is usually subscription only.

Gladwell points out that Apple will soon be making more money from iTunes and its AppStore than it does from iPhones and iPods. More than 300,000 people have downloaded The Wall Street Journal’s iPhone app, expending the Wizened of Oz’s paid model to mobile content. You can argue that as with iTunes and the music industry, it’s turned a traditional industry model on its head. But, the key is, it hasn’t made things free, just changed who’s making money.

Coming back to my giant server farms in the middle of BumFuck Arizona, Anderson uses YouTube as one of the main supports for his “Free” argument, claiming that ever increasing channel and bandwidth capacity makes distribution virtually free. Gladwell counters by saying this is bullshit, reminding us of the recent Credit Suisse estimate that YouTube will spend $369 million on hosting costs this year alone as it serves up an estimated 75 billion free videos. Credit Suisse then goes on to say that YouTube is on track to lose all of $500 million this year. Even Google can’t take that kind of continuing punishment.

All I can say is if that’s the business model of the future, you can keep it. The whole thing reminds me of the story of the farmer who trained his donkey to eat less and less food every day. He finally got it to the point were it didn’t eat anything… And the bloody thing went and died on him!

George Parker is a guest columnist for psfk.com. He is the perpetrator of adscam.typepad.com, which is without doubt, one of the most foul and annoying, piss & vinegar ad blogs on the planet. He is the author of MadScam and his new book, The Ubiquitous Persuaders, which is currently setting the ether ablaze (and which you can order now on Amazon). He will continue to relentlessly promote the crap out of it until you are forced to stab yourself in the eyes with knitting needles.