Ian Singleton

Free and the penny gap

Posted in Uncategorized by iansingleton on December 14, 2009

If you haven’t already done so, read Free (part one) which is a bit further down the list.

Why does Google default to free? Because it’s the biggest way to reach the biggest possible audience and achieve mass adoption

That’s fine for Google, but for a niche player,  “making money around Free when you don’t have millions of users (and sometimes when you do) is a matter of creative thinking and constant experimentation.”

The internet business model pioneered by e.g. Google had four steps:

  1. Have great idea
  2. Raise funds to bring it to market, ideally for free to reach largest possible audience
  3. If it proves popular, raise more funds to scale it up
  4. Repeat until you get bought by a bigger company

now 2 to 4 are no longer available, web startups have to do the unthinkable – come up with a business model that brings in money while they’re still young.

The principle of a niche premium offering on top of the free material is called freemium, a phrase Anderson attributes to NYC VC Fred Wilson – paid version of free service. Wilson denies coining the phrase.

    VC Josh Kopelmann First Round Capital – the penny gap – the biggest gap in any venture is that between a service that is free and one that costs a penny. Free forsakes direct revenues but grants possiblity of mass sampling. A free product can go viral, paid can’t. Zero is one market, anything else is another.

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    Free and traditional structures

    Posted in Uncategorized by iansingleton on December 14, 2009

    There’s a quote by Stewart Brand which Anderson claims this is the most important sentence of internet economy – it establishes economic link between technology and ideas.

    “on the one hand information wants to be expensive, because it’s so valuable. The right informatin in the right place just changes your life. Oon the other hand, information wants to be free, because the cost of gettingit out is getting lower and lower all the time, So have these two fighting against each other.”

    In the short term, the result of Free is destruction of traditional structures – the six reasons for the end of paid content

    1. Supply & Demand – supply has mushroomed but demand has not. Millions of Facebook pages all created with no expectation of pay
    2. Loss of physical form – as content moved from atoms to bits, it became intangible even abstract
    3. Ease of Access – easier to download content than it is to find it and buy it in stores
    4. Shift to ad-supported content – habits set on Web carry over into daily life. If content is free online, why shouldn’t it be free elsewhere?
    5. Computer industry wants content to be free – Apple makes money selling iPods, not music files.
    6. Generation Free – under30s have digital economics hard-wired in.

      Thought For The Day

      Posted in Uncategorized by iansingleton on December 14, 2009

      For a while now I’ve been reading a weekly newsletter written from www.informitv.com.

      In today’s posting, the editor William Cooper writes that the worlds of broadcast and broadband, of television and the internet, are slowly converging – well I think we know that.

      But it’s the next bit that I wanted to quote verbatim because I think it’s spot on.

      “And people are beginning to view their flat-panel high-definition displays as screens rather than televisions.”

      Free (part one)

      Posted in Uncategorized by iansingleton on December 14, 2009


      FREE

      Back in the summer, Chris Anderson visited Bristol to talk about his new book, Free. I bought a pre-publication copy and what follows is my summary of the book. I posted this elsewhere to start with but wanted to bring it over here because this book is one of the most important bits of thinking about digital content that there is.

      This is not a review – for that, go here. For Malcolm Gladwell’s slating of Free, go here

      My opinion is that this is an important book because of its subject but does only half its job. It belies its journalistic origins and its argument runs out of coherence. The last forty of the 240 pages feel disjointed. This is what it says..

      C21st Free different from C20th Free.

      Latter about giving away products as short-term promotional gimmicks – Jell-O recipe books, Gillette razors – to encourage sales of underlying product – jelly, razor blades.

      C21st Free – consequence of two laws – Moore’s law in processing, storage & bandwidth; 1883 French mathematician Joseph Bertrand came up with Bertrand’s Competition Law – In a competitive market, price falls to the marginal cost. Online where information is a commodity and goods and services can be easily copied, this law plays out to ultimate extent.

      Moore’s Law coined for processing. Also applies to storage & bandwidth. And it’s processing which develops the slowest. Gordon Moore didn’t coin the law. It was the work of Caltech professor Carver Mead.

        POSTED BY IAN SINGLETON AT 23:29 1 COMMENTS
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        Pondering

        Posted in Uncategorized by iansingleton on December 11, 2009

        The more I think about the previous post, the more I realise that it’s this that is the big difference between the media world in which I started work and the media world of today.
        Once upon a time, what locked the “media professional” into the relationship was his or her ownership of the means of distribution.

        Once you take that away – and the figure that gets bandied around is there are a billion videos on Youtube – then it gets harder and harder for the “media professional” to justify their presence in the content creation process.

        For The Love Of It…

        Posted in Uncategorized by iansingleton on December 11, 2009

        A former colleague and good friend of mine has been working with a cookery expert on a series of cooking lessons to be distributed via email. Their purpose is to increase traffic to the cookery expert’s website and increase the profile of her cookery school. Here’s what the expert wrote in an email to the producer today.

        “I want to produce similar stuff… Not sure it’s necessary to get you up here to do it and edit it when there is clearly no cash return…. Can i do some of it myself is the question.

        We also need to get you back here for some sessions anyway as I owe you a thankyou for the work you have done…”

        Now this raises all sorts of issues for my producer. These would be of great interest philosopically – were it not for the fact that this was how the producer thought he was going to make a living…

        Begin At The Beginning

        Posted in Uncategorized by iansingleton on December 11, 2009

        I’ve been a media professional for my entire career, since I first left Oxford in 1986. And for much of that time, I’ve been ahead of the adoption curve.

        • I created video for the web for the first time in 1999. On behalf of a travel company client, I made a journey from South Africa-Namibia-Botswana-Zambia-Zimbabwe-South Africa, creating what would be described now as virals – short summaries of the destinations, the travel and accomodation and the reactions of the clients.
        • I conceived and founded www.icanplayit.com. It’s a broadband content company which came into existence before Youtube was founded.
        • And I’ve blogged elsewhere about training to run the 2008 Florence marathon and my ongoing project to dispense with stuff.

        And this is the first time that I’ve blogged about work.