The Internet: Free or Fee?

The internet: the final free frontier.  Or so many people think.  There is a general perception that the internet is the great Land of the Free.  Everything can be found online, for free, if you look hard enough.  Well, that may be true enough if you intend to ignore laws and place yourself in perilous legal waters.  You can indeed find just about anything that can be digitized online for free.

But, the internet is far from free.  There are no free lunches.  It costs just to use the internet.  Everyone pays for access.  If you have your own account with a service provider, you pay.  If you hop on a neighbor’s open WiFi network, he pays.  If you use the public library or other municipal source, everyone that pays taxes pays.  If you get on at Starbucks or Panera, their customers get to pick up the tab through marginally higher prices (or their shareholders through decreased profits).  Plus, every place you visit online is paid-for.  Hosting isn’t free.  Someone paid to have those digits sent to you.

So, the internet is most certainly not free.  So why does this perception persist?  Because the cost of the internet divided by the sheer quantity of no-additional-cost information available in the form of digits is almost infinitely minuscule.  It is like putting a quarter into a slot machine and hitting a jackpot…every month.  It isn’t free to play, but it might as well be free.

The division of labor on the internet has opened the door wide for specialized information providers.  Just about anyone can tell a story.  People like reading about stories on topics they love.  This aspect of human nature opened the door for the blogging revolution.  Beginning with Matt Drudge breaking the Monica Lewinsky story, the barriers keeping the “little guy” out of the world of “significance” have fallen like the walls of Jericho.

Those barriers were what allowed the monopolist media moguls to maintain control over which sound bytes were heard by the rapt public.  No longer.  The “Old Media” is dying.  The monolithic, top-heavy structure of “mainstream” media is inflexible and cannot cater to individuals.  Without control over information, their profitability has plummeted.

When it comes to general information, or “news,” it is available for free on the specialized blogs.  Why wade through pages of finger-blackening soy ink that you don’t care about in order to find the one story you want?  Just go straight to your trusted blog that has proven itself to be quicker, more accurate, and easier to read when it comes to news in whatever field requires your interest.

And that is just what people are doing. In his book, Free: The Future of a Radical Price The Internet: Free or Fee?, Chris Anderson argues that the business model of “free” is possible because we can then sell premium products.  By giving part of our expertise away, we can develop trust, hold back some critical information, and then sell more complete or deluxe versions to those people we have proven our merit to.  This business model works, particularly online, and is why freebies are one of the necessary components of a business website.

But, it will rarely work in fields where decentralization has proven superior to centralization, either in retrieval or delivery (or both).  For example, bloggers have proven themselves quicker and more comprehensive than the oldspapers when taken collectively.  YouTube and Google Video, along with the ubiquitous nature of cell phone cameras, have brought accountability to abusers of power (in some cases).  Rare is the television network who would air such footage.

Wikipedia’s decentralized editors have proven a collective force.  Encyclopedia companies are bankrupt or soon will be.  Netflix’s decentralized delivery system (you pick up your videos in your mailbox instead of at Blockbuster) has put the writing on the wall for most rental shops.

So, what is the point of all of this?

Enter Rupert Murdoch.

He is an old school media tycoon.  He most certainly isn’t new school.  And, when it comes to the internet being free or fee, he just doesn’t get it.  Being a fan of the internet, I’m glad he doesn’t get it.  I think decentralization and freedom of information is a good thing.  I like his approach because his approach will make his monolithic media empire even less relevant, thus opening the door for wider dissemination of more information – at least information that has nothing to do with Britney Spears or Paris Hilton’s latest scandals.

So, what’s the deal?  He wants to make people pay him for his slant.  And, he has recently announced that he is going to limit the search engines’ access to his content.  I, for one, say, “hoooray!”

And, to Rupert: let me know how that works for you.

If his was not a centralized media empire, he might be able to sell a premium product.  Since he now lives in the digital age, he might not be selling much of anything before too long…

You can read more and differing opinions on the Free vs. Fee conundrum here and here.

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