The rise of “freeconomics”
Friday, July 3rd, 2009
I went to the UK launch of Chris Anderson‘s new book ‘FREE‘ last night which unsurprisingly was a very busy event since he is a bit of a digital media pop star. With being a celebrity come the critics that have to proof that your ideas are in fact rubbish and that try to find examples where “The Long Tail” does not work and where “FREE” destroyed jobs.
I’m not one of those guys. However I had to think of something when Chris was talking about some of his ideas last night. They gave out free copies of the book (an abridged version, not the full one) so I can even quote him now. He is writing:
“What the Internet does is combine all three, compounding the price declines with a triple play of technology: processors, bandwidth, and storage. As a result, the net annual deflation rate of the online World is nearly 50 percent, which is to say that whatever it costs YouTube to stream a video today will cost half as much in a year.”
Although I agree that the above applies to any technology costs this does not work for any licensing expenses. The licensing fees for content is already the biggest expense for many services that stream or otherwise deliver content to consumers. Although there is certain evidence that the cost of content is going down (the PRS has recently lowered they per stream royalty for music streaming services) I don’t believe that this trend will keep on going at a rate of 50% per year.
Nevertheless, Chris Anderson’s book ‘FREE’ looks like another must read for anyone who is interested in how technology changes moder day economics.
