How Free Music Is Quickly Becoming Free Everything

How can you make money on the web when people want everything for free? In a word: externalities.

Swaying CrowdLike most people who enjoy music and are technologically savvy, I have a lot of tracks on my hard drive.

And by that I mean somewhere in the range of 32 gigs. iTunes tells me that I could hit ‘play’ and leave town for 17.3 days, and it would still wouldn’t have played all the available tracks.

That’s a bit ridiculous. Especially considering with a few clicks more, I have access to a seeming unlimited amount of free internet radio stations. I have way more music that I know what to do with.

What a difference from 10 years ago. Remember when your library was constrained by your wallet and the physical limits of the cd rack in your bedroom?

In essence, music has become free (and I don’t mean because your pirated it). It’s abundantly available for very little or no cost. And in most cases, it’s the distributors, not the producers that care. And it’s rapidly becoming the same for TV shows,

Just ask Matt Stone from South Park:

We’re always in favor of people downloading. Always. It’s how a lot of people see the show. And it’s never hurt us. We’ve done nothing but been successful with the show. How could you ever get mad about somebody who wants to see your stuff?

Likewise, a friend of mine would like nothing more than to see his travel show shared around the world to as many new eyeballs as possible. But he sympathizes with the network that pays the bill – pirated tv shows means no ads. No ad money means no show.

So what was the real problem? Web users that demand free stuff or content providers clinging to a quickly aging business model? We wondered how to sides could be reconciled.

Turns out, free is, in fact, the future.

Chris Anderson, editor of Wired magazine and author of The Long Trail (great book), lays it out in an article from earlier this year Free! Why $0.00 Is the Future of Business”

Over the past decade, however, a different sort of free has emerged. The new model is based not on cross-subsidies — the shifting of costs from one product to another — but on the fact that the cost of products themselves is falling fast.

[…] The word is externalities, a concept that holds that money is not the only scarcity in the world. Chief among the others are your time and respect, two factors that we’ve always known about but have only recently been able to measure properly. The “attention economy” and “reputation economy” are too fuzzy to merit an academic department, but there’s something real at the heart of both.

There is, presumably, a limited supply of reputation and attention in the world at any point in time. These are the new scarcities — and the world of free exists mostly to acquire these valuable assets for the sake of a business model to be identified later. Free shifts the economy from a focus on only that which can be quantified in dollars and cents to a more realistic accounting of all the things we truly value today.

That last line has a nice ring to it. And may perhaps be the most society-altering concept of all.


  1. South Park just sort of had an episode about this. At the end, Kyle says

    “We thought we could make money on the Internet. But while the Internet is new and exciting for creative people, it hasn’t matured as a distribution mechanism to the extent that one should trade real and immediate opportunities for income for the promise of future online revenue. It will be a few years before digital distribution of media on the Internet can be monetized to an extent that necessitates content producers to forgo their fair value in more traditional media.”

    …how true…

  2. Ha, that’s quite a mouthful for Kyle. Gotta love the South Park guys.

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