Leveraging Free

"Free" has been a founding concept in the Linux world since before there was Linux — or , if you prefer. In his history of the GNU project, Richard M. Stallman begins, "When I started working at the MIT Artificial Intelligence Lab in 1971, I became part of a software-sharing community that had existed for many years. Sharing of software was not limited to our particular community; it is as old as computers, just as sharing of recipes is as old as cooking."

And the rest of the world is finally, irrevocably, catching up. Chris Anderson, Editor-in-Chief of Wired, is Free! Why $0.00 Is the Future of Business. In Will Money Follow Free, Jay Deragon (co-author of The Emergence of the Relationship Economy) — a book for which I wrote the forward), makes a subtle and important point about how business works:

In the old business models markets were chased and developed based on “relationships”. The old business models served the markets with a mindset of “capture and contain” rather than “attract and give“. In the old business models the predominant influence was from sales and marketing divisions because they had or created the relationships. If the top sales and marketing people left one firm for another the relationships typically followed. The old system tried to contain relationships by putting “non-compete” agreements on people and heavy handed legal agreements with customers and suppliers, people. You can institutionalize processes but the choice about relations has always been and will continue to be free.

Jay also points to Kevin Kelly's Better than Free, in which Kevin says it's helpful to think of free in terms of replication:

The internet is a copy machine. At its most foundational level, it copies every action, every character, every thought we make while we ride upon it. In order to send a message from one corner of the internet to another, the protocols of communication demand that the whole message be copied along the way several times. IT companies make a lot of money selling equipment that facilitates this ceaseless copying. Every bit of data ever produced on any computer is copied somewhere. The digital economy is thus run on a river of copies. Unlike the mass-produced reproductions of the machine age, these copies are not just cheap, they are free....

This super-distribution system has become the foundation of our economy and wealth. The instant reduplication of data, ideas, and media underpins all the major economic sectors in our economy, particularly those involved with exports — that is, those industries where the US has a competitive advantage. Our wealth sits upon a very large device that copies promiscuously and constantly.

Yet the previous round of wealth in this economy was built on selling precious copies, so the free flow of free copies tends to undermine the established order. If reproductions of our best efforts are free, how can we keep going? To put it simply, how does one make money selling free copies?

I have an answer. The simplest way I can put it is thus:

When copies are super abundant, they become worthless.
When copies are super abundant, stuff which can't be copied becomes scarce and valuable.

When copies are free, you need to sell things which can not be copied.

Well, what can't be copied?

There are a number of qualities that can't be copied.

Kevin then outlines eight "generatives" that can't be copied: immediacy, personalization, interpretation, authenticity, embodiment, patronage and findability.

Jonathan Zittrain has a new book about the generative power of both the Internet and PC, titled The Future of the Internet — and How to Stop It.

I'm writing this at Logan airport, just a few minutes before boarding a plane, so I don't have time to add much beyond my expectation that those who bet on generativity will win, and that those who bet against it will lose.

The sweet irony of the success of free software is that little of it was written for profit. Most of it was written simply to solve practical problems. The result is an endless abundance of highly practical and easily copied (or, in RMS's terms, shared) building materials from which anything can be made, quickly and easily.

All of the scarce things Kevin lists can fall under the heading of relationships, which — far more than transaction and money flow — are the binding connective tissue of business.

A year ago I wrote here about Building a Relationship Economy. A year before that I wrote about The Intention Economy.

At ProjectVRM, we're working on both. But we're not alone. Look for public radio to make the most of free. And soon.

Stay tuned. :-)

(Looking to add more to this after I get to Los Angeles... In the meantime, this will have to do.)

______________________

Doc Searls is Senior Editor of Linux Journal

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Hello all, In the end these

Anonymous's picture

Hello all,

In the end these models depend on the upon the labour of
their respective communities, by no means free, it is paid
for in a left handed fashion that folks don't often think
about.

In the US every National Lab, NASA, NCSA and to an extent the
DOD/NSA use open source. Why is this significant.

1. GPL sources must be released under terms of license.

2. Public Domain, Taxpayer Funded development must be released, by law.

That's quite a bit of smarty heads working on code development,
on your dime.

The contributions by independent developers gratis is a given,
yet taken to be quite significant, to the extent that OSS could
not survive without it.

The Point: The Free model is dependant upon other peoples labour, period, privatize profit, socialize cost.

I call it the 90/10/null/100 business plan 90% input by you, 10% input
by me, null for you, 100% opportunity / profit for me.

If one chooses to look they'll see the business plan lurking behind
the "sunshine and lollipops".

Food for Thought, Regards, db

foreword

rob ukak enderle's picture

Hey, I dont want to be "that" guy but c'mon ,,,you "wrote the forward"?
Unless you had this down low thing for Lakers PF Lamar Odom giving new meaning to "you rode the forward", I'd change that.

Now try to get rid of that mental image if you can!!

Love,

rob ukak enderle
Poissonpuant, VT

You can still sell things even if they can be copied

crosbie's picture

Kevin Kelly trips up when he says "When copies are free, you need to sell things which can not be copied."

Kevin certainly understands the Internet and the folly of attempting to protect the price of copies via anachronistic copyright legislation.

Unfortunately, his conclusion is grievously malformed. He should have said "When copies of things are free, you need to sell the things, not the copies". It doesn't matter whether things can be copied, unless you were hoping to profit from a state granted privilege of exclusive sale/manufacture of copies, such as patent or copyright.

For example, it's quite possible to sell GPL software (free as in speech, not beer) despite the fact that it can be freely copied (without charge). The consequence is not that people give up selling software, but that people give up selling copies of it (except added value affixed thereto).

This doesn't invalidate the many things that Kelly suggests can also be sold, but it remains perfectly possible to sell digital art despite the market for digital copies becoming quickly saturated.

The value is in the art, not the copy.

That the instantaneous diffusion of the Internet may devalue copies does not consequently devalue the art so copied. The art and its value remains unaffected.

The notion that the value of art resides in each of its copies is an illusion created entirely by copyright.

"When art may be freely copied at negligible cost, sell the art - not copies"

Thus, sell the blockbuster movie - do not try and sell copies. People still value the movie just as much as ever, but the market for copies is over.

Copyright is over.

2nd paragraph is broken, 2 corrections:

Anonymous's picture

closing quote on first link is an apostrophe, link broken, 2nd link not visible:
href="http://www.thelongtail.com/the_long_tail/2007/05/my_next_book_fr.html'

extra closing parenthesis:
"(co-author of The Emergence of the Relationship Economy) — a book for which I wrote the forward)"

if the code tag worked for HTML this would be more useful:

And the rest of the world is finally, irrevocably, catching up. Chris Anderson, Editor-in-Chief of Wired, is working on a book titled Free, and recently published Free! Why $0.00 Is the Future of Business. In Will Money Follow Free, Jay Deragon (co-author of The Emergence of the Relationship Economy — a book for which I wrote the forward), makes a subtle and important point about how business works:

PS: the "CAPTCHA"s are terrible, 6 times I've been wrong so far, And I have to enter it just to preview my post? Anyway...

An interesting read (as

War-N's picture

An interesting read (as usual). Being a (web) software developer and also a semi-professional musician, I see a large overlap in the way the music business is going. Although it seems a few years behind the whole free software movement, the same struggles and soul searching is being done in the music biz. I recently blogged my take on the "value" of music. I'd be interested to hear from folks in free software how they feel about the music business of late.

War-N
Hungry Lucy Music

The Free/PayChoice biz model

Doc Searls's picture

Good post, War-N. Music is high on my list of businesses that need to start happening. The old business isn't going away, but it won't be the Main Means like it used to be.

Take a look at the model. The idea is to provide a simple, easy and standard (as in common) way for people who appreciate music (or any media, or anything at all) to pay what they want for it — and to open doors, if the artist is interested, to conversation and relationship. The possibilities are wide open.

On the plane today I re-read RMS on GNU, and it got me thinking that maybe we ought to call it FreeChoice. That is, both fan and artist are free to relate any way that's mutually agreeable, including commercially. That is, the fan is free to pay what they like, if they find it valuable. If the means to pay value for value is there, and it's easy, and open on both sides... good stuff might happen.

Let's take what RMS say about software freedom, and swap music for software:

  • You have the freedom to use the program, for any purpose.
  • You have the freedom to modify the music to suit your needs.
    (To make this freedom effective in practice, you must have access
    to musical notation....)
  • You have the freedom to redistribute copies, either gratis
    or for a fee.
  • You have the freedom to distribute modified versions of the music,
    so that the community can benefit from your improvements.

Well, that's what music has been for as long as humans have been making it. And re-making it.

Look again at Kevin Kelly's metaphor, of the Internet as a copy machine, Seems to me that what we called the "music business" was just a copy business that thrived in a time when making copies scarce was lucative. That heyday is over, and the new music busineess is free to emerge. We've got a buncha folks who want to make that happen (among other things). It would be great to get your thinking on it.

Doc Searls is Senior Editor of Linux Journal

Work for free?

db's picture

Hello all,

In the end these models depend on the upon the labour of
their respective communities, by no means free, it is paid
for in a left handed fashion that folks don't often think
about.

In the US every National Lab, NASA, NCSA and to an extent the
DOD/NSA use open source. Why is this significant.

1. GPL sources must be released under terms of license.

2. Public Domain, Taxpayer Funded development must be released, by law.

That's quite a bit of smarty heads working on code development,
on your dime.

The contributions by independent developers gratis is a given,
yet taken to be quite significant, to the extent that OSS could
not survive without it.

The Point: The Free model is dependant upon other peoples labour, period, privatize profit, socialize cost.

I call it the 90/10/null/100 business plan 90% input by you, 10% input
by me, null for you, 100% opportunity / profit for me.

If one chooses to look they'll see the business plan lurking behind
the "sunshine and lollipops".

Food for Thought, Regards, db

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