Monday

Free Economy. Really?

Free has been the buzz word around the Internet and digital media for a while. Anderson suggests the future of business is free online “because of sheer economic gravity.” He breaks down the priceless economy into six categories. “Freemium”: Users of the basic content gets it free and if you want to upgrade there is a cost. Cross-subsidies: A product is free as long as you buy something else. Zero marginal cost: things that can be distributed at no cost to anyone. Labor Exchange: Free to use because it creates value somewhere else. Advertising: Free content because the advertisers will pay. Lastly, Gift economy: Free to everyone because people are sharing their information at no cost.

Gladwell who questions Anderson’s free economy suggests that the digital age has is too fluid to pinpoint the economy as free; He states that the digital age has “so transformed the ways in which things are made and sold that there are no iron laws.” Gladwell points out that free may not be the best business model for the companies themselves. He uses Youtube as an example of this. Anderson on the other hand points out examples of why free would work; for example in advertising and free labor. They may come to a common ground in the fact that the digital age is changing our traditional economy, although the how may be up in the air.

Both Anderson and Gladwell make valid points which have equal weight of importance. What we can take from them is the digital age is changing our economy. We have to examine why this matters? Isn’t it apart of natural progression that we shift the way we do business? We have always been a culture of constant change and the internet is no exception to this. I agree with Gladwell that we are not in an iron law but Anderson has a point that businesses has recognized that free does work. The challenge we face is not that we are changing but what we are going to do with this change. Whether the economy is transitioning to free or not we need to decide what we are going to do about it.

Olivia Myles

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