Freeconomics and Futurismic

In lieu of anything more substantial for the time being*, anyone wanting to know where I’m coming from with my plans for Futurismic would do well to read Chris Anderson‘s piece at Wired about the economics of free:

“From the consumer’s perspective, though, there is a huge difference between cheap and free. Give a product away and it can go viral. Charge a single cent for it and you’re in an entirely different business, one of clawing and scratching for every customer. The psychology of “free” is powerful indeed, as any marketer will tell you.

This difference between cheap and free is what venture capitalist Josh Kopelman calls the “penny gap.” People think demand is elastic and that volume falls in a straight line as price rises, but the truth is that zero is one market and any other price is another. In many cases, that’s the difference between a great market and none at all.

The huge psychological gap between “almost zero” and “zero” is why micropayments failed. It’s why Google doesn’t show up on your credit card. It’s why modern Web companies don’t charge their users anything. And it’s why Yahoo gives away disk drive space. The question of infinite storage was not if but when. The winners made their stuff free first.”

Actually, I think everyone should read that article whether they’re interested in Futurismic or not. But it explains why Futurismic will never have a pay-wall, for a start.

And it’s probably too much to hope for, but I hope lots of musicians who up till now have been chasing after a record label to sign them up and make them famous will take note of this bit:

“On a busy corner in São Paulo, Brazil, street vendors pitch the latest “tecnobrega” CDs, including one by a hot band called Banda Calypso. Like CDs from most street vendors, these did not come from a record label. But neither are they illicit. They came directly from the band. Calypso distributes masters of its CDs and CD liner art to street vendor networks in towns it plans to tour, with full agreement that the vendors will copy the CDs, sell them, and keep all the money. That’s OK, because selling discs isn’t Calypso’s main source of income. The band is really in the performance business — and business is good. Traveling from town to town this way, preceded by a wave of supercheap CDs, Calypso has filled its shows and paid for a private jet.

The vendors generate literal street cred in each town Calypso visits, and its omnipresence in the urban soundscape means that it gets huge crowds to its rave/dj/concert events. Free music is just publicity for a far more lucrative tour business. Nobody thinks of this as piracy.”

OK, back to the grindstone – this week is one of those crunch points where everything peaks at once. Which makes it all the more frustrating that I appear to have picked up some kind of minor illness from PicoCon**. Selah.


[ * Busy. Sorry. Unavoidable. Your patience is appreciated. ]

[** It’s OK, Farah, I forgive you – I couldn’t think of anyone I’d rather catch an illness from. 😉 ]

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