I Want to Break Free...

I'm not sure that the late Freddy Mercury was thinking about web 2.0 when he sang those words. The song came on the radio as I finished reading Wired's Chris Anderson's new book "FREE" and Malcolm Gladwell's review.

We are now so used to the idea of things being free that when leading media commentators make claims that "information wants to be free", that to challenge the idea becomes heresy.

Chris's book is well argued and detailed and I'd encourage anyone interested in the future of IT to read it. That's not to say that I agree with most of it. There is little doubt that the digital revolution is having major impacts on the economics of production and distribution, but I have concerns.

As new markets emerge, market entry or creation strategies have long embraced the notions of free samples or free trials. For instance, Sky built the digital satellite market in the UK with what is known as "offset economics". Set top boxes were free in exchange for service contracts. This is part of a long term trend we have seen to replace capital purchases with services. Having established the market, set top boxes are subsidised but not free. The upgrade to HD for instance is a balance between a purchase cost and a service contract. It's an established and good business practice.

What has happened in the web 2.0 world is the proliferation of services free to the user such as Facebook. Some services have developed a "freemium" model with a free entry level and chargeable upgrades.

What is argued by the "digital utopians" as I see them is that this is not a market entry strategy but a long term trend "caused by Moore's Law".

It is worth applying "reductio ad absurdum" to some of the claims to see where this ends, if at all.

If "all information once digitised inevitably becomes free" then it leads us to some interesting conclusions. A digital share certificate costs nothing to copy. So we can all become Google billionaires. All we need to do is copy enough share certificates. We can go a step further, money is just information. For those of us using online banking, we have a solution to the Bank of Mom and Dad challenge. All we need to do is to encourage our children to copy not take our money from our banks.

Bingo, we have destroyed the City of London and global capitalism in the name of Web 2.0!

So I don't believe that all information will be free. What will change is that charging "excessive prices" will be harder to sustain and that the value of patents, copyright and so on will be strained as has happened in music and now in video. The Open Source Movement, notably Linux, has played this role in software markets.

There are some reasoned arguments I have found on the web that "Digital free" tends to monopolise. Other coherent arguments can be found around security, privacy and terms of trade. I'm not convinced that left unresolved these issues will be socially or economically good. My own suspicion is that scaling "free" may increase the possibility of systemic risks.

The challenge is to understand, for me, what is the optimal use of the possibilities of the free and freemium models in an overall mix in pursuing our economic and social goals?

In particular, the availability of many free artefacts may be a great help to the developing world and to the digitally excluded and marginalised communities in the developed world.

I am not interested in taking sides in this argument. I can see many advantages of "free" but I don't go all the way with the "freeconomics" gurus.

We are in a period with lots of experiments on new business models based on new technological developments. Which will be sustainable and scaleable is, for me, too early to call.

As an industry and a profession we have an interest in getting this right and avoiding a rerun of the .com/.bomb era. I'd like to avoid Web 2.0 becoming ENC 2.0 (Emperor's New Clothes).

As a philosopher might claim "Man is born free and everywhere in bits".

So, how far can we go?

About the author
Chris is a technology and policy futurologist. Chris has been in the IT industry since 1980. His roles have spanned Honeywell, ICL, HP, Microsoft and Capgemini. He is a Fellow of the BCS and a Fellow of the RSA.

See all posts by Chris Yapp
June 2018

Search this blog