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Is There a Fear of Free?

Indiewire By Eugene Hernandez | Indiewire July 8, 2009 at 6:10AM

There is a rather dramatic modern tension being explored in Chris Anderson's "Free: The Future of a Radical Price." It's a conflict being fueled by a cultural shift, a generational divide or the current struggle to find new economic models that work in a time of considerable technological shifts and a persistent financial crisis.
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There is a rather dramatic modern tension being explored in Chris Anderson's "Free: The Future of a Radical Price." It's a conflict being fueled by a cultural shift, a generational divide or the current struggle to find new economic models that work in a time of considerable technological shifts and a persistent financial crisis.

Last week, I asked, "Are we fighting to preserve a business or an artform?" This week, I clarified for myself, "How do we preserve an artform while struggling to rescue a business?" Chris Anderson might argue that some of the answers can be found in his books.

Anderson, the editor-in-chief of Wired, is the man behind "The Long Tail," the best-selling book from 2006 that fueled countless debates about "the new economics of culture and commerce." Nearly three years ago he explored, "Why the future of business is selling less of more." That is, as I wrote in September of '06, how a number of businesses that make their money selling culture (music, movies, books) make an increasing amount of revenue not from the high-profile hits, but from increasingly popular niche content. Bigger libraries of say indie films, aimed at reaching narrow audiences, can be more valuable than blockbusters over time.

That proverbial long tail of content remains a divisive concept because some have argued that it isn't a long term solution to developing a sustainable business model for content and creators, given that it's driven by nickel-and-dime revenues. Conversely, as new (free and paid) platforms emerge for films, alternative approaches to distribution are taking root among makers and marketers of indie, specialty and international films.

Published yesterday in both paid print and free digital versions, Anderson's new book, "Free" (which indieWIRE previewed), aims to explore that core contrast, that is, how people today, "are making lots of money charging nothing." It's an alluring conflict.

"Paradoxes drive the things we care about," he quotes author and entrepreneur Stewart Brand as saying, elaborating on the idea that, "information wants to be free."

Chris Anderson's new book, "Free."

Anderson starts his examination with the famed Monty Python troupe and their decision to foil online pirates by creating a sanctioned YouTube channel, uploading high-quality classic Python comedy sketches and reaping financial rewards in the form of a sizable jump in DVD sales.

A primary precept in Anderson's book is that the Google Generation, folks in their 20s and younger, won't pay for bytes, but will pay for atoms. In one example, he notes, they'll opt for watching user generated "Star Wars" films for free on YouTube rather than sitting in front of a big screen TV to catch a George Lucas classic.

In just the past year, sites have emerged to cater to consumers who want to snack on, or wholly consume, quality content online, much of it from Anderson's aforementioned long tail. Websites such as Hulu for TV shows, The Auteurs for international cinema or SnagFilms for documentaries (which owns indieWIRE) are delivering high-res entertainment to computer screens (as are Babelgum and Dailymotion, among others), for free, while iTunes, Netflix, and Amazon are selling rentals and downloads for a price. The move even led leading indie film seller John Sloss to launch Cinetic Rights Management to try to exploit indie films in both free and paid digital platforms.

Anderson's new book doesn't devote too much space to free models for films, but his ideas and examples are certainly applicable in this evolving marketplace for movies.

"Businesses can profit more by giving away things than selling them," the author said yesterday, at an event at Google's DC headquarters aimed at promoting the new book. "The notion that everything online is free goes against the idea we had in our heads for hundreds of years. In the past we thought 'buy one get one free' was in fact free, but all this time we have been suckered."

"Free" is no longer just a marketing concept, used to upsell or bait and switch buyers. Free must be trusted, Anderson argues. "The new form of free is not a gimmick," he writes in the new book, citing numerous examples of modern businesses that have adopted free approaches, from a Harajuku (Tokyo) boutique that gives away products (they make money by charging customers a membership fee and sellers pay to place their merchandise on the shelves) to Google, which has built a business around offering countless products, services and tools primarily at no cost. They sells ads around their services or monetize information and data that they mine and often use that insight to develop be products.

Back in the film world, while a financial gravy train hasn't arrived for indie filmmakers exploring Anderson's so-called "freeconomics," early adopters seem to be realizing that it's short-sighted to ignore hybrid approaches that incorporate an element of free. Folks must reject the 20th century suspicion of "free" Anderson argues, because free does not necessarily signify a lack of quality.

"Sooner or later, most producers in the digital realm will find themselves competing with Free," Anderson writes.

The revenues from digital distribution are not amazing, explained "Super Size Me" filmmaker Morgan Spurlock in a recent conversation with indieWIRE, but that's not a reason to avoid online outlets that giveaway content. Filmmakers should "plant a flag in the digital world," Spurlock recently advised, "You should not be afraid of going there." Filmmakers should bring their production costs down -- lower their risk -- and then experiment with all delivery systems to find the right mix, he advised.

Using free outlets to build awareness, or even just gain access to an audience or the industry, is one viable strategy, Chris Anderson said yesterday.

"Film's a great example," Anderson told indieWIRE. "Film is built around theatrical distribution which distorts the medium," he said, pointing to YouTube as a democratizing starting point for filmmakers to get their foot in the door, specifically those creating shorter form content to tease longer work or showcase their talent. Use the Internet to get recognized he advised, "The Internet's a great start."

Again, though, as with "The Long Tail," Anderson's ideas are stirring debate. In a widely referenced critique in last week's New Yorker Magazine, star writer Malcolm Gladwell ("The Tipping Point," "Blink"), took Anderson to task, essentially adopting a William Goldman-esque, "nobody knows anything" stance.

"The only iron law here is the one too obvious to write a book about," Gladwell wrote, "Which is that the digital age has so transformed the ways in which things are made and sold that there are no iron laws."

Ross Koenig in Washington D.C. contributed to this article for indieWIRE

Eugene Hernandez is the Editor-in-Chief & Co-Founder of indieWIRE and can be reached on his blog, through Facebook or via Twitter: @eug.