SXSW: Wired Editor Chris Anderson's Free Will Be Free
Photo: Jim Merithew/Wired.com
AUSTIN, Texas -- Chris Anderson's upcoming book Free will be free. Sort of.
In a keynote Q&A with former Mac marketer and venture capitalist Guy Kawasaki on the final day of the SXSW Interactive conference here, Wired magazine's editor-in-chief said that you'll be able to read his new book on the economics of giving things away without paying a dime. But, he said, publisher Hyperion asked him to not reveal the specific details of how that will work.
Kawasaki read audience questions from Twitter. One said: "I was hoping that this would be like the Oprah show and we get a free copy of Free under our seats."
Anderson replied: "On July 6, you will all have a free copy of Free under your ... mouse button."
The "freeconomics" theory Anderson laid out in "Free! Why $0.00 Is the Future of Business," his 2008 cover article in Wired, posits that in the internet era, giving goods away has moved from marketing gimmick to fundamental strategy that's changing the way the world does business. (Wired magazine is Wired.com's sister publication.)
"I will give you a hypothetical scenario by which a book could be free," he said Tuesday during the SXSWi panel. Describing sponsored paperbacks with company logos printed on the front that are distributed at conferences, or audio books distributed as MP3 downloads, Anderson pointed out that the marginal cost for some forms of distribution approaches zero -- therefore, he said, the cost to the consumer should be zero.
With printed books, the cost is not zero. Anderson says that he would bank on some percentage of readers deciding to upgrade to the traditional printed book version.
"Paper still matters," he said. "If you believe that the physical book is the superior form, then you have to believe that people who love the sample will buy the physical book."
Converting users of a free version of a product to a paid version, says Anderson, is the key to making money on a free product. The sweet spot, he believes, is 5 percent.
Massively multiplayer online games for kids like Maple Story, Club Penguin and NeoPets have already started to "experiment with every possible way to charge," Anderson said. "If you can convert 5 percent of users to paid, you can cover your costs. Anything above that, and it becomes extremely popular."
Asian videogames like Maple Story are especially relevant, said Anderson, because "China is the future of free." An entire chapter in the book is devoted to China, and how the country's lack of intellectual property protection changes the way its music industry operates, for example.
"Pirates will pirate a CD, which creates celebrity, which you can use to create cash," Anderson said. Chinese pop stars make money not off music sales, he said, but from making personal appearances, starring in advertisements, etc.
One of the biggest advantages of "free" as a marketing tool, said Anderson, is the fact that the word has a double meaning in English.
"It's a bug in English," he said. "Free as in freedom, and free as in price." Whereas in other languages, the two words are distinct -- libre vs. gratis -- in English we "take all the good connotations of 'free' and use them to sell something."
Photo: Jim Merithew/Wired.com
Photo: Jim Merithew/Wired.com
Photo: Jim Merithew/Wired.com
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It's called moles, you dumb fuck.
So these guys are having a conversation on stage and everyone in the audience is too busy looking at laptop screens. What a world!
Stephen Wolfram's book A New Kind of Science, is available free online at: http://www.wolframscience.com/nksonline/toc.html
or you can buy the "classic" hardcover for $44.95.
I think one thing that will come out of this move to free books will be a shift in the proportion of books sold as softcovers towards more sales on hardcover books.
Okay, so that shit is moles, you tell me. Why does he have that shit all over his face?
Just finished a "free" based marketing plan for my project and really appreciate being validated. Not that this is something new, but like "green" it is something we need to more than believe in, we have to do it.
Got young children? AnimalExerciseFun.org.
Get it, it's free . . .
neat. looking forward to reading the book. i have had a very good time keeping up with sxsw online. my appreciation for the event and your coverage - http://web-poet.com/2009/03/18/sxsw/
"we take all the good connotations of 'free' and use them to sell something."
Geez I'm so glad to live in an America full of dorks like this.
I believe that the deal was if you follow him on Twitter you get a free book. It was spoken in public, therefore it must be so.
Someone should ask Mr. Anderson about his years at The Economist, where there were multiple accusations of plaigarism by Mr. Anderson, copying the work of other writers -- for "free". Has he ever come clean on his Economist years?
Arrrrggh!! Chris Anderson is a pop-pirate! Sharing is key to this business model.
"Chinese pop stars make money not off music sales, he said, but from making personal appearances, starring in advertisements, etc."
Honestly, most US pop stars do the same thing. And most of them don't make shit off their music either. We're only a few steps away from taking on that same general economic model in the US, albeit with some tweaks left to be done before we could really pull it off.
Again, I say, Arrrgggh! Chris Anderson is a Pop-Pirate!
Nothing is Free...
there's always a price to be paid somewhere...
Ads create a void in the victim, which is filled by buying a product - ultimately money changes hands. Branding redirects commerce to a competing product. Yes, I am free to choose. But, what if I don't need either? Am I free to be undistracted?
I remember going to an IQ test site and found my score to have dropped significantly. The difference? The flashy advertising.
Ads are not the solution; they are part of a more deep-seated problem: from birth, we are trained to *want* way more than we *need*.
"Bloggers and Twitter users turned out in force..." Force? Are you sure that they aren't just playing solitare or watching re-runs of "The Hills."
Tired:Bloggers
Wired:Blobs
Tired:Tweets
Wired:Twitts
There are good ads and bad ads. Somehow, we all have to live. Some live off the efforts of others, providing nothing in return. Trade is a mechanism whereby we contribute and earn. So you can sell something or provide a service for someone else where they pay you. Ads are one service.
The problem comes when the ads are distracting or overpowering. At NewsBlaze, we try not to make the ads distracting, no popups, no flashing graphics, mostly text ads. I've asked a lot of people if they find the ads distracting. Most said no. If there is another model, I'd consider trying it.
Hi,
I agree with freeconomics. I have been offering my two mystery/thrillers free for about a year now and the response is overwhelming. I have also lowered the price of the printed versions to be competitive with bestselling paperbacks.
In case you want a free downloadable copy go to http://www.smashwords.com/profile/view/aspolicastro
What is all of that shit on Guy's face?