Chris Anderson is the Editor and Chief of Wired Magazine. Anderson has written two books that examine the impact of the Internet on traditional business models. Anderson has his B.S. in physics. Prior to coming to Wired, Anderson served as the U.S. Business Editor for the Economist. Prior to that he wrote for two prestigious science journals, Nature and Science.
In Free, Anderson notes that unlike products and services in the physical world that inflate in cost over time, digital content and services actually deflate in cost and eventually approach zero over time.
The abundance of bandwidth and memory has made the cost of storing and distributing content extremely low. This has encouraged amateurs, as well as professionals, to become content creators. This, in turn, has led to an abundance of content, most of which is free.
Anderson observes that although the music and publishing industries have attempted to combat the free distribution of content through technological and legal barriers, Abundance creates a gravitational pull on prices that eventually approaches zero.
Anderson contends that this is not necessarily a bad thing. He provides examples of several successful business models that incorporate the free distribution of digital content and services.
The key to making money while providing content and services for free is to attach paid programs and services to them. For instance, Second Life provides virtual tourism for free. However, if you want to own property or premium content, you must pay a fee. Valuable Open Source software is free, but many businesses, such as IBM, make a sizable profit by offering development and support for a fee. Google, the largest provider of free content and services, makes money by attaching advertising to its searches that is directly targeted to the particular person conducting the search.
Anderson notes that the monetary market is only one aspect of the overall economy. In fact, other economies exist as well that are based on other measures of value. These include the "Attention" and "Reputation" Economies. We have all been told at some time in our lives that there is nothing more valuable than our "Reputation" and the large amount of money that we pay celebrities gives some indication of how much we value "Attention." Reputation and attention are two of the most important currencies on the web.
For each of the business models that Anderson presents, he provides an analysis of a company that uses it. Each analysis breaks down the cost of providing the content and exactly how the company generates revenue to pay for the service without attaching a fee.
As more and more education moves online, what are the implications of the "Free" digital economy? We see states dumping textbooks in favor of online resources and universities posting lectures and curriculum online for free. What opportunities and threats do these trends present? How can Educational Service Providers embrace this new trend without losing the revenue necessary to sustain quality services?
For more information click on the title of this post.
Google Keep reminders will be saved to Tasks
2 years ago