chris anderson

Free Content as Marketing, Not Business Model

by Tim Berry on October 20, 2009

With all the talk surrounding the landmark book Free by Chris Anderson, I want to recommend Steve King‘s post “Free isn’t a Business Model, But it is a Business Strategy” on his Small Business Labs blog.

I’ve followed the Free controversy myself, and posted about it here on this blog, and here on the Huffington Post, when two of my favorite authors, Malcolm Gladwell and Seth Godin, squared off about it a few months ago. Gladwell essentially hated the idea, and Godin declared it here whether we like it or not.

If I had to choose one short description of the basic idea, it would be this paragraph from Anderson’s 2008 story in Wired:

Once a marketing gimmick, free has emerged as a full-fledged economy. Offering free music proved successful for Radiohead, Trent Reznor of Nine Inch Nails and a swarm of other bands on MySpace that grasped the audience-building merits of zero. The fastest-growing parts of the gaming industry are ad-supported casual games online and free-to-try massively multi-player online games. Virtually everything Google does is free to consumers, from Gmail to Picasa to GOOG-411.

King has a gift for summary. He says in his post:

Free has been used effectively as a business strategy and marketing tactic for pretty much as long as businesses have existed. Given how widespread and successful free is and has been, I don’t see how you challenge the concept.

The only place I see room for criticism is if you think Anderson is suggesting that free is a complete business model. Obviously, if free means no source of revenue then it is destined for failure. But I don’t think this is what Anderson is suggesting.

King goes on to point out several examples. He also points out that it could be tactic, strategy or something else. And it’s not that new an idea, either (Chris Anderson would agree with all three).

Are you looking at using a free offer as part of a business plan? You’ll have good company. I do hope, though, that you define for yourself the specific business objectives (traffic, visibility, whatever) and put in some metrics so you can measure results.

(Image credit: from Wired.com, Free! Why $0.00 Is the Future of Business)

{ 1 comment }

Are You Ready for Free?

by Tim Berry on July 29, 2009

I had a long talk yesterday with a good friend at the back end of a bad business experience. Call it recession-related, banking, credit cards and a website that might be valuable someday–good information, nice interface–but was taking too long.

We had a talk about web apps, trends and the long-term problem of free. My friend is safe, thanks; he’ll be fine while what he’s been working on falls apart through no fault of his own.

But free? Are you ready for free? If you’re looking at a web business or information or expert business, you’ll probably have to deal with this. People on the web–you included–expect free.

Unless you’ve been hiding under a rock, you already know about the dustup between Malcolm Gladwell, Chris Anderson and Seth Godin . . .

Anderson’s book, FREE, came out a few weeks back, arguing in part that the distribution costs of any intellectual property that can be boiled down to digital format, be it a song, a book, a video or a game, have become so low that you should essentially round down to zero and accept that if you don’t make it available for free, someone else will.

So, rather than fight it, just suck it up and give it all away.

That’s from Jonathon Fields’ post last week: Why I Hope the Free Brigade Got It Wrong. He adds:

Because if the Free Brigade are right, if we who create information, performances, music, writings, recordings and any other electronic “commoditized” form of our work are required to give our creations away whenever they appear in digital form, that effectively shuts down one of the most powerful and lucrative ways to scale a small business built around creative or strategic output.

Which brings me back to my conversation with my friend from the besieged website. Somebody has to make payroll.

{ 5 comments }

Hits Are Better … If You Have a Choice

by Tim Berry on July 30, 2008

I’ve seen the Chris Anderson “long tail” idea used in so many different contexts that I had to get the book to figure out what it really meant. And it’s a good book, by the way, good reading.

With “There it is again,” Seth Godin puts it down in just a few paragraphs, along with the delightful other side of the coin that makes it even more obvious:

Chris Anderson of Wired had the insight and guts to discover one of the two most important natural laws of the Net, give it a name, explain it and teach it to the rest of us. The Long Tail is a natural law, the sort of thing that just keeps showing up. Every time I crunch a set of numbers, every time I examine something happening online, I see it again.

(The other one? Metcalfe’s Law, which explains the network effect. It’s sort of like the long tail, but flipped in the mirror. The more people who connect to a network, the more it’s worth–squared. Facebook and fax machines are both network effect businesses.)

A lot of people don’t seem to understand a key implication of the long tail: Given the choice, it’s better to make a hit.

If you have a choice of cutting a top 10 record or making a track of Jamaican polka music for iTunes, go for the hit.

If you have a choice between being on page 30 of the Google results for ‘Bolivian sushi’ or the number one match for ‘buy life insurance’, go for the latter. No brainer.

The problem, of course, is that you don’t have a choice. You can give the hit a shot, but it’s awfully crowded at that end of the curve.”

{ 0 comments }

Looking at the Long Tail

by Tim Berry on July 8, 2008

So put this together: research in the Harvard Business Review examines two specific markets and says the Chris Anderson theory of the Long Tail doesn’t hold up in reality. That’s followed by an excellent analysis by Anita Campbell on Small Business Trends, pointing out that while the long tail might not work for large corporations, it’s still driving small business. And some good comments too.

If you’re interested in small business strategies, or for that matter business strategy in general, check it out at Is it Time to Chuck the Long Tail Theory? | Small Business Trends.

Tim Berry
President
Palo Alto Software, Inc.

{ 0 comments }