Freedom, nothing left to lose, blah

In a posting to his blog this Wednesday, Nick talks about "free" (as in, to the end user) content & ad supported information. I started to write a comment, but it quickly grew and so I'm transplanting it here where there's much more space.

In order to connect to consumers and remain viable in the marketplace, companies are forced to literally give their products & services away.

Well, as a Free Software nerd, all I can say here is, duh. It's been going on for a while. But it's not being given away gratis -- in the case of FS, it's often released in the hope that the community surrounding the piece of software will add value to it, which won't have to come at any cost to the original author beyond that of stewarding the code. Another benefit is that the code is added to a growing ecosystem of other Free Software which drastically lowers the cost of acquiring software.

As far as other "information" goods, like whatever constitutes the nebulous term "content," it seems as though similar market forces apply. The thing about these goods is that they exist with a near-zero cost of reproduction. More importantly, they are absolutely worthless without market penetration. I'll even go so far as to say that their value function is proportional to level of the aforementioned market size. As more and more coporations are "forced to literally give there products & services away" the more they all gain. Literally. According to US code anyhow:

the new definition of “financial gain” would clarify that the term “includes receipt of anything of value, including the receipt of other copyrighted works.” -- US Copyright Office

Well, that's assuming that they're giving the content away. That presumption is a bit off. It's a bit more accurate to say that the content creators are allowing their product to be viewed gratis, or something close thereto. They still wield their copyright granted monopoly on their content with an iron fist. In the general case. With the exception of community-based content aggregators like Wikipedia, where any entity can take the information and reuse it within the terms of its fairly liberal license, you're heading for lawyers if you reuse most of the gratis content you find out on the web. It may be "free" but it hasn't been liberated.

From a pure market perspective one could argue that the reason so many things are being given away (consumer to consumer) is because people are tired of the crap they've been offered by companies for years.

I'm not sure that I would divide things into "companies" and "consumers," especially in this space. The way I choose to characterize the players is as "content producers." The first issue that I have with the term consumer in the information space is that there is no consumption happening. Consumption has real property implications -- something has been taken and used and is no longer there, like fuel, or something has been acquired and can only be possessed by a single entity. In the information space, due to no-cost copying, neither of those situations occurs. Instead it's a question of whether or not exposure to the content has occurred.

The second and, in my opinion, more important objection that I have with the term is that the "consumers" are in actuality producers. They make content. They add value to the overall system. The web of course makes the barriers to entry incredibly low, the producers have a desire for this content, and so they make it. All quite normal. Corporate content producers have a desire for this content as well. If they have content, they can attract page views and through them ad revenue. If not ad revenue, they can monetize this content by other means - publishing the information in more "traditional" media, such as books and magazines. They can even use the content as an advertisement for the corporations products.

In the computing space, IBM is a great example of this. Their developerWorks site hosts articles on just about everything software development related. And every time a programmer sees those pages, and more importantly every time his boss sees those pages, they see the usual IBM navigation links across the top - Services, Solutions, Products. They're not intrusive, annoying ads, blinking at you and begging you to buy something. They're the reason that the article is published. IBM is reminding you that the next time you need something crazy like new computers, or some way to better integrate your European network with your North American network, they're there. They can help you with that. It's what's called targeted advertisement, and I'm willing to bet that it works wonders.

As an art director friend of mine said earlier today, "I just wish I knew the information online was unbiased and trustworthy."

Information isn't ever unbiased. The transmitter of the information adds bias just by transmitting it. The receiver adds bias by the act of receiving. If I transmit information, there's meta-information coming through based on the medium of transport. Saying something on the telephone is drastically different then saying the exact same thing on the web or even in print. Reading something on the web is likewise very different than hearing on the telephone.

The reason is simple. If I say something over the telephone, it's (supposed to be) private. The information given is specifically molded for that private venue. When I say the same thing on the web, it is a public statement, intended for all comers, and the information has to be regarded as such. How much of the surrounding information has been omitted for the sake of politeness? How much has been left out to impersonalize the message? If in a private communication, how is the transmitter relying on personal relationship to influence the receiver's um, receipt? The examples continue ad nauseum.

This said, how do we approach the idea of trustworthiness? What does it mean to be trustworthy. How reliable is this information? The only good way to reliability is the old chain of trust. It's the only way we have to verify reliability. Because I trust PBS to have reasonable standards of content, I implicitly trust Charlie Rose. That's easy enough. It takes a leap of faith, though. At some point, you have to go out on a limb and try trusting something. I'm pretty sure that there are studies on growth and erosion of trust by reputable psychologists, and it'd be an interesting thing to look at. The long and short is that each person has their own network of trust, and that's how they make trust decisions in meatspace, so why should that change in the online world? It doesn't make sense to generalize about "information online," because the information all lives at various distances from your trust network.

Businesses can't be "free" -- they have a bottom line, investors to please, too much to lose.

Businesses all over the world sell "free." It happens in realspace and in virtual space. Bottled water is essentially "free" tap water. Bottled. Sold at a ridiculously high markup. There's a lot of money in selling free things. The trick is, you don't actually sell the free thing, you sell something on top of the free thing. Redhat and Novell can tell you a little something about that. Novell was supposed to be dead by now. As far as anybody can tell, their pre-Linux business was mostly living off of supporting ancient NetWare installations and lawsuit money from Microsoft. Now? They sell free and are doing quite well at it. Sun has open-sourced Solaris and they're doing Java, too. Hell, even the new Niagra processors are available under a liberal license. That's a whole lot of free that they're selling. And it wouldn't be at all interesting, except that they're not going out of business doing so. They were getting killed just a few years ago after the dot-bomb. All of a sudden, nobody had huge chunks of change to throw toward expensive Sun hardware and expensive Sun licenses, so the web people got all Linux-y. Now? Even Sun does Linux. Why? Because it's better to be there than not, and because they can. It's free. So why not sell it too? Lots of people want it.