Book Review- Free
“Free – The Future of a Radical Price.” is written by Chris Anderson, the author of “The Long Tail” and the editor in chief of “Wired.” This book shows how “Free” can be applied as a new business model and people can make profits from it. The whole concept comes from Stewart Brand’s idea, “Information wants to be free.” Anderson believes that Free is the future. The first reason is that the cost is approaching zero with the development of technology. He adopts Moore’s Law to show that bandwidth, storage and processing power cost lower and lower. Moreover, the marginal cost for digital content is also low enough. Scarcity of resources is replaced by abundance. People pay because of its scarcity. Now abundance gives us a chance to enjoy free. Second, he examines Free from a psychological view, which makes a conclusion that there are only two prices in a market: Free and non-Free. Then Anderson uses “waste is good” to emphasize benefits of Free. All his statements lead to a core spirit of this book: Free is the future of business. People can make profits from Free.
I think Anderson’s statement is convincing. He explains the model of Free from different perspectives, including historical, psychological, and economical. I enjoy reading the psychological analysis about Free. Amazon’s free shipping is a good example of using consumers’ psychology about free. I’m also impressed by Zappos’ case. People order several pairs of shoes and return those are not suitable by free. The guilty of waste stimulates consumers to keep some shoes and return the rest of them. “We take stuff because it’s there, not necessarily because we want it.” (P67) Google is also a great example in the book. The more Google free services people use, the longer people stay online. Revenues from Google ads increase due to the traffic.
Besides, the book shows people how to utilize Free to make profits. No matter the Free model will come true in the future or not, people still learn a new business strategy. Gladwell (2009) thinks Anderson addresses a “bloodbath” as a “salvation.” However, I don’t feel it’s inappropriate to think positively about Free model. Why people can’t try making profits from Free since most of online information is free already?
I like the idea of “abundance.” The transition from scarcity to abundance makes Free possible. Though abundance makes monopoly less and valueless, it also stimulates more creation. For example, when I was writing this book review, I also read others’ reviews online for free. Those reviews make people think and agitate different points of view. Abundance generates abundance.
Anderson discusses free music in the book. He thinks free music is positive for music business. Here I have one more example to support it. Pirate music in China and Taiwan is a serious problem. People search online for free and illegal music files to download. Google launched music search engine in China and developed a new business model. It provides authorized free music files from labels and sells ads in search results. (Musil, 2008) Therefore, music itself is free and revenue will come from displaying ads. Anderson also shows how prosperous the ringtone market is in China, which also brings money to artists and labels.
I also like the last chapter. Anderson lists several misunderstandings about Free and argues one by one. He gathered previous feedback from his blog and wrote his reaction in the book. My questions are as same as others and are answered in the book. I find out that most questions come from the insecurity of Free. Anderson did a good job for erasing those concerns.
However, there are some parts in this book aren’t convincing enough fro me. First, Anderson talks about Free from the past more than about the future. He shows the context about Free model and presents the development of free as a natural. Therefore, I feel less surprise about Free when following with his analysis. He collects what we know already and draws a conclusion that Free is our price of the future. Most of his statements are happening now. Seth Godin (2009) says in his blog post, “It’s happening. The world will change around it.” I expected to see more outstanding explanations and Anderson’s concept can’t be categorized as a prediction totally.
Secondly, one of the reasons for Free model is that the costs of bandwidth and storage are approaching zero. Are there other costs besides those technological costs? When producing one album, we still need producers, musicians. The cost of production couldn’t be estimated even if we’re giving the music away by free. Cost includes more than Anderson’s discussion in the book.
Thirdly, how will Anderson explain about YouTube? Free content on the website draws huge traffic. Why YouTube haven’t made profits yet? Putting ads on user-generated content seems questionable since YouTube doesn’t create those videos. Other social media faces a similar question. I’m curious about Anderson’s answer about the business model of social media.
To summarize all, Free model is happening already. People access to free information everyday. Anderson is good at clarifying misconceptions about Free. He also shows how people can make profits from Free with pretty charts and examples that we’re familiar with. The Free model is arguable because those who own productions and make money from them now are not ready to let go their privileges. The Free model is happening but also facing different challenges ahead. Anderson himself is an example for this. If Free is the future of business, Anderson will make profits more from giving the book free, instead of charging from the book. Maybe he should give away the book by free?
References:
Anderson, C. (2009). Free: The future of a radical price. New York: Hyperion.
Godin, S. (2009). Malcolm is wrong. Seth Godin’s blog. Retrieved on October 25, 2009 from http://sethgodin.typepad.com/seths_blog/2009/06/malcolm-is-wrong.html
Gladwell, M. (2009). Priced to Sell. Is Free the Future? New York Times. Retrieved on October 25, 2009 from http://www.newyorker.com/arts/critics/books/2009/07/06/090706crbo_books_gladwell?currentPage=all
Musil, S. (2008). Google offers free music search in China. CNET News Retrieved on October 25, 2009 from http://news.cnet.com/8301-1023_3-10008142-93.html
Economics and technology
The class last night was full of economics. I enjoyed the moments we applied those concepts with technology and personal experiences. Here are some thoughts about what we’ve talked last night.
Will people create knowledge if they can’t charge for it?
I think the answer is “Yes.” That’s why Wikipedia and other user-generated content websites can work. Although people might not make profits from their creation on Wikipedia or YouTube, they earn reputation and self-satisfaction, which might be potential profits in the future. Several musicians who got popularities from YouTube or MySpace and signed with labels are examples. Technology also shapes our action of “sharing.” Many web services provide us similar function and encourage people to share something easily. I believe that people can only get used to the action of “sharing” more and more often. When “sharing” is a natural habit, money won’t be a critical motivation for most contributors.
Locked in- pro or con?
Technology should lock customers or not? Many examples show restrictions from technological devices. iTunes converts music files into AAC format, which barely could be accepted by other players, except iPods. After losing an iPod, I found it difficult to get a new and cheaper player in other brands, since all my music files in the PC are AAC format. I dislike this restriction totally. Of course this kind of limitation protects products from losing customers. However, it also increases users’ negative feelings about products when limitations create inconveniences. In Taiwan, people are able to own a mobile number and carry it from one mobile carrier to another. If a customer was not satisfied with the service, he/she could switch to another one. I believe this regulation helps mobile carriers be more aware of their quality of services.
Facebook, Your New Name is “Happy Farm” in Taiwan.
“Don’t steal my plants from my farm.” “Have you watered your farm today?” These daily greetings about farming are getting popular in most offices in Taiwan recently. For many Taiwanese, the hot flash game called “Happy Farm” is their motivation for Facebook usage.
“Happy Farm” features social networking and gaming. Each user owns a virtual farm for cultivation. Users have to check their farms, and water and weed from time to time. Friends on Facebook are able to steal plants and send gifts, which are the most interactive and fun parts of the game. Furthermore, it’s easy to play and kills employee boredom in the office. As a result, the game’s popularity has grown amazingly. Several similar games were also developed to attract users.
Due to people’s addiction to the game, Facebook draws a huge amount of traffic in Taiwan. Total registered members have reached 3.2 million, and that number exceeds the total population of Taiwan’s capital city. According to Checkfacebook.com, Taiwan is also one of the countries that has grown its members rapidly during the past week, second only to China. Companies have started to prohibit employees from using Facebook in the office. There is even a part-time job available to help people take care of their virtual farms while they are working. One survey shows that 31 percent of Taiwanese users use Facebook for recreation, and only 20 percent of users use it for connecting with friends. This phenomenon was probably not anticipated by Facebook.
A flash game has helped Facebook’s overseas market in Taiwan, more than any other marketing strategy. This situation reflects differences between cultures. The trend of flash games might fade away, but how to keep people’s attention will remain a future challenge for Facebook.
References:
My learning goals for Economics of Digital Communication
Review past
After viewing AT&T’s commercial in 1993 during the class. I just realized that how far technology has brought us now. Those visions we had in the 1990s become reality now. I would like to know how all the innovation affect our life. As a technology gadgets consumer, what’s the story behind purchasing behavior? As a graduate student of digital media, how digital communication differs with traditional one economically? What brings us to learn about economics of digital communication?
How can we benefit from this?
Several social media tools are still looking for their way to make profits. I would like to see why this issue is difficult to be solved from the economic prospect. Furthermore, I could like to propose some possible solutions from the knowledge I’ve learned during the class.
Whom should I believe?
A lot of readings are required for this course. Most of them are about opinions. I would like to go through those ideas and see which one is most convincing. Critical thinking is the skill I definitely need to improve. I need to train myself by reading. I could like to learn to understand an idea completely, judge it, decide to like it or not and express my reasons. Moreover, I’ll also observe how those authors prove their statements, what kind of elements or materials they use for arguments. This observation will be beneficial to my research life.
See what’s next
In addition to those concepts we learn during class, are there other theories or statements for the future? Will Chris Anderson’s “Free” work? Could all the information be shared freely, as same as Benkler’s vision? What if those trend are not happening, what will the future be? It may take years to see the results. My learning will keep longer even after the end of this class.
Crowdsourcing: Language translation on Facebook
When a website tries to reach global market, multi-language for the website is the first required element. MySpace established local offices and hired local teams to launch localized services, but Facebook decided to utilize the power of crowdsourcing for language translation. How did it work?
Spanish is the first language besides English that Facebook started translation in 2008. 1,500 Spanish speakers were working on it. The whole website was translated in four weeks. The project is accomplished through an application. Volunteering translators need to apply it on Facebook first. After setting their language, they can go to “go translate” page. All untranslated terms are shown on the page for translators to leave their suggested translation. Then others can decide which version to be adopted by voting on the “go voting” page. Once there are enough translated content on the website, Facebook verifies those pages and launches it. Users are able to choose the language they prefer. Germany and French websites were launched after Spanish version release in January, 2008. Now Facebook provides over 60 languages and reaches over250 million users around the world.
Though crowdsourcing for translation on Facebook seems work well, there are some arguments about it.
(1) The quality matters. After Spanish version was launched, some critics pointed out its grammar errors and confusing terms. Even Facebook provides translation program, quality controlling is still an issue.
(2) When Facebook asked its users to translate it for free, how about professional translators’ market price? Nick Arce states that crowdsourcing can destroy but also help translation industry. Crowdsourcing should be used to review professional’s translations, instead of being substitute for professional translations.
(3) Is it reasonable for Facebook to ask users to work for free? Wikipedia utilizes crowd’s power to translate their content. However, it is a non-profit and provides knowledge to the public. According to John Yunker’s blog post, “Wikipedia has next to no money and it’s a non-profit; crowdsourcing is not just a great strategy but a necessity.” But Facebook’s purpose is extending overseas market. Yunker argues that why Facebook don’t provide funding to speed up core language translations. The quality will also be improved by hiring people. The process of crowdsourcing isn’t free at all. Facebook cost time and budget to develop the application and approve translated content. Providing funding to translators might be more efficient.
Conclusion:
Translation is a complex and time-consuming job. Facebook persuades users to work on it by free. The good thing is that, those users have high royalty about Facebook. They engage with Facebook more through helping with translation. On the other hand, how many other projects could be done by crowdsourcing on Facebook? Can this experience be duplicated? Or users’ passion will be worn down one day?
References:
Arce, N. (2009). Crowd-sourcing: Is it cheap labor or a glimpse of what’s to come? Retrieved on Aug 6, 2009, from http://www.translationandinterpretationblog.com/2009/07/crowd-sourcing-is-it-cheap-labor-or.html
Arrington, M. (2008). Facebook Taps Users To Create Translated Versions Of Site. Spanish, French and German Available Now. Retrieved on Aug 6, 2009, from http://www.techcrunch.com/2008/01/21/facebook-taps-users-to-create-translated-versions-of-site/
Arrington, M. (2008). Facebook Turns 1,500 Users Into Spanish Translation Slaves. Retrieved on Aug 6, 2009, from http://www.techcrunch.com/2008/02/07/facebook-turns-1500-users-into-spanish-translation-slaves/
Hosaka, T. (2008). Facebook asks users to translate for free. Retrieved on Aug 6, 2009, from http://www.msnbc.msn.com/id/24205912
McCarthy, C. (2008). Facebook moves into international translation efforts. Retrieved on Aug 6, 2009, from http://news.cnet.com/8301-13577_3-9856631-36.html
Owyang, J (2008). Video: Facebook’s Spanish Translation Misses the Mark. Retrieved on Aug 6, 2009, from http://www.web-strategist.com/blog/2008/02/12/video-facebooks-spanish-translation-misses-the-mark-420/
Yunker, J. (2008). Is Facebook “translation worthy” or just plain cheap? Retrieved on Aug 6, 2009, from
http://www.globalbydesign.com/blog/2008/01/14/is-facebook-translation-worthy-or-just-plain-cheap/
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