As Kent Anderson mentions in his post Gladwell & Nielson: The Fixed Costs of Fixed Ideas, Malcolm Gladwell’s review of Chris Anderson’s forthcoming book, “Free: The Future of a Radical Price” has sparked some intense debates.
What strikes me about the debate is that, like most debates, it’s occurring at the logical extremes of the scenarios (it’s all or nothing). Yet, when the dust settles on most debates, reality usually falls between the extremes.
Let’s turn the clock back to the late 1990s–Y2K was coming, and the Internet boom was in full swing. The mantra then was that brick and mortar was a thing of the past to be replaced by the dot coms. Late in the “dot com era” some started to see holes in this theory, stating that blending the models would be more likely than one model replacing the other. In fact, some started to think that online-only retailers would be at a disadvantage to brick and mortar retailers that had an online presence and effectively integrated the customer experience.
Then a funny thing happened right around the turn of the century–for lack of a business model (sound familiar), most online only ventures (with notable exceptions like Amazon and eBay) started to crumble.
Now, back to the subject of paid content. It seems logical that several pricing scenarios (free, paid, sponsored, hybrid, not yet discovered, etc.) have a place in the new economy. The problem is that we don’t have the rules, guidelines, or models that predict how consumers may behave given the many variables that impact their decision making.
In essence, our established markets have reverted back to behaving like emerging markets.
What do you do in emerging markets? Make many small bets and keep experimenting until the trends start to become clear.
As more information becomes available about how our customers are behaving, I’m willing to bet “free” will be a significant part of the landscape but will not be the only pricing model in the market. I also doubt that many of the paid models that exist today will survive unscathed.
So, if your business is selling content, I would highly recommend that you don’t put all of your eggs in either the “all free” or “all paid” basket.
Instead, keep an open mind, and keep experimenting.