The price of freedom: Reinventing the online economy (RSA Journal July 2009)

I was delighted to be invited to make a contribution to the RSA Journal's July 2009 edition, the printed version of which was just send out I believe, and the online edition that just went up on their website.

The complete title of my piece is: "The price of freedom - reinventing the online economy: Gerd Leonhard explains why ‘free’ content can still pay in the long term" and I really enjoyed writing this for them.

Following my last presentation at the RSA, in April 2009, on 'The Future of Content and Creativity' I have had many good conversations about this topic. The audio track from this event is here, btw; and the video is embedded again, below. Enjoy. And RT;)

I definitely recommend that you check out the other great features in the Juy 09 RSA journal, as well, there's some great gems in there.

You can read the entire thing on the RSA page, so here is just an excerpt:

"Free information, free music, free content and free media have been the promises of the internet (r)evolution since the humble beginnings of the World Wide Web and the Netscape IPO on 9 August 1995. What started out as the cumbersome sharing of simple text, grainy images and seriously compressed MP3s via online bulletin boards has now spread out to every single segment of the content industry – and even into ‘meatspace’ (real-life) services such as car rentals. Without a doubt, ‘free’ has become the default expectation of the young web-empowered digital natives and now the older generations are jumping in, too.

On top of the already disruptive force of the good old computer-based Web1.0, we are witnessing a global shift to mobile internet – a WWW that is, finally, so easy to use that even my grandmother can do it. While five years ago, we needed a ‘real’ computer tethered to a bunch of wires to port ourselves to this other place called ‘online’ and partake in global content swapping, now we just need a simple smart phone and a basic data connection. With a single click of a button, we’re in business – or rather, in freeloading mode. 

As users, we love ‘free’; as creators, many of us have come to hate the very thought. When access is de facto ownership, how can we still sell copies of our creations? Will we be stuck playing gigs while our music circles the globe on social networks, or blogging (now: tweeting) our heart out without even a hint of real money coming our way?

Daunting as it may seem, we can no longer stick with the pillars of Content1.0, such as the so-called fixed mechanical rate that US music publishers are currently getting ‘per copy’ of a song ($0.091). Nobody knows what really defines a copy any longer when the web’s equivalent of a copy (the on-demand play of that song on digital networks) may be occurring hundreds of millions of times per day. No advertiser, no ISP and not even Google has this kind of money to pay the composer (or rather, the publisher), at least not until the advertisers start bringing at least 30–50 per cent of their global US$1 trillion marketing and advertising budgets to the table.

Traditional expectations and pre-internet licensing agreements are exactly what are holding up YouTube’s deals with the music rights organisations such as PRS and GEMA: this is what the rights organisations used to get paid for the music that is being copied, and this is what they want to get paid now. This impasse is causing significant friction in our media industries worldwide. Yet, below the top-line issue of money, there lurks an even more significant paradigm shift: the excruciating switch from a centralised system of domination and control to a new ecosystem based on open and collaborative models. This is the shift from monopolies and cartels to interconnected platforms where partnership and revenue sharing are standard procedures. In most countries, copyright law gives creators complete and unfettered control to say yes or no to the use of their work. Rights-holders have been able to rule the ecosystem and, accordingly, ‘my way or the highway’ has been the quintessential operating paradigm of most large content companies for the past 50 years.

Enter the internet: now the highway has become the road of choice for 95 per cent of the population, the attitude of increasing the price by playing hard to get is rendered utterly fruitless. Like it or not, a refusal to give permission for our content to be legally used because we just don’t like the terms (or the entity asking for a licence) will just be treated as ‘damage’ on the digital networks, and the traffic will simply route around it. The internet and its millions of clever ‘prosumers’, inventors and armies of collaborators will find a way to use our creations, anyway. Yes, we can sue Napster, Kazaa or The PirateBay and we can whack ever more moles as we go along. We can pay hundreds of millions of dollars to our lawyers and industry lobbyists – but none of this will help us to monetise what we create. The solution is not a clever legal move, and it’s not a technical trick (witness the disastrous use and now total demise of Digital Rights Management in digital music). The solution is in the creation of new business models and the adoption of a new economic logic that works for everyone; a logic that is based on collaboration, on co-engagement and on, dare we mention it, mutual trust – an ecosystem not an egosystem. Once we accept this, we can start to discover the tremendous possibilities that a networked content economy can bring to us.  

Free, feels-like-free and freemium

Much has been written on the persistent trend towards free content on the net. It is crucial that we distinguish between the different terms so that we can develop new revenue models around all of them. ‘Free’ means nobody gets paid in hard currency – content is given away in return for other considerations, such as a larger audience, viral marketing velocity or increased word of mouth (or mouse). I may be receiving payment in the form of attention, but that isn’t going to be very useful when it’s time to pay my rent or buy dinner for my kids. Free is... well, unpaid, in real-life terms.

 ‘Feels-like-free’, on the other hand, means that real money is being generated for the creators while their content is being consumed – but the user considers it free. The payment may be made (ie sponsored or facilitated) by a third party (such as Google’s recently launched free music offering in China, Top100.cn); it may be bundled (such as in Nokia’s innovative ‘Comes With Music’ offering, which bundles the music fee into the actual handsets) or the payment may be part of an existing social, technological or cultural infrastructure (such as cable TV or European broadcast licence fees) and therefore absorbed without much further thought. Feels-like-free could therefore be understood as a smart way to re-package what people will pay for, so that the pain of parting with their money is removed or somewhat lessened – everyone pays, somehow, but the consumption itself feels like a good deal...."     Read on.  PDF: Download RSA - The price of freedom Gerd Leonhard July 2009

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Music 2.0 - the future of the music industry - in 18 minutes (narrated slideshow)

Alright then... you don't think "Music 2.0 in 90 seconds" is enough.  You don't think 3 minutes really do it, either. You liked the PDF but you want the talk. I heard you. So here is the full 18 minutes of Music 2.0, in 2 parts, thanks to the ingenious Youtube limitations (but hey... it's HD now so why am I complaining?).

Here is a link to the MP4 file (410MB) if you want to watch on while biking in the woods;) Plus: remember that you can get it all for your iPods and iPhones by subscribing to my GerdTube.net / Blip TV iTunes feed (except for this one, though - for some reason the encoding just won't work for this file).

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A quick reminder: post your questions about the future, now - next WiiG show is Thurs 6pm CET

Twitter / Gerd Leonhard: Next WhereIsItGoing sessio ... via kwout

Kwout: a nice tool for sharing web content, and quoting

Lorraine at Rostant Advertising in Trinidad send me the link to an interesting Web 2.0 tool called Kwout. They provide tools that allow you to take a snapshot of any piece on any webpage - mostly for quoting purposes I would think -, make a widget out of it, and re-use the quote, intact will all links etc, on your own page - pretty cool, even though the image quality could be better.  Talk about Sharism!

Below is a snippet from one of my favorite essays called 'Better than Free' by Kevin Kelly, and from a blog post by me that is based on the same concepts... check it out.

MediaFuturist: Edge: BETTER THAN FREE By Kevin Kelly via kwout

The Technium: Better Than Free via kwout

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Audio version of my speech at MPJC 2009 "The Future of Media"

Just received this file via MPJC podcast site; it's the audio version of my 30-minute speech on The Future of Media, get more details via my previous post on MPJC 2009. Note: the introduction (90 secs) is in Dutch but my speech is in English.

Discover Simple, Private Sharing at Drop.io

New video: Music 2.0 in 90 seconds

This is probably a world record: In this short Flickr video, below, I am illustrating my basic Music 2.0 concepts in a snappy 90 seconds. Yes, I know that's way to fast to read much of it while it goes by, so here is the PDF, too: Music 2.0 in 90 seconds gerd leonhard singles (7MB PDF, creative commons licensed)

The entire Music 2.0 book can be downloaded (yes, for free), here, or you can order it from Amazon.com or even better, on-demand-printed by Lulu. You can read it on the iPhone, too, using the cool Instapaper app. And yes, you can download this snazzy video via Drop.io. Music is provided by SlicerXXL via TribeofNoise.com - thanks! Still need more? Check out my Music 2.0 slideshows on Slideshare.com.

And if you really need more than 90 secs - here is the 3-minute version

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Chris Anderson on "Free": Crap is in the eye of the beholder, scarcity and abundance side by side

Chris Anderson published an interesting excerpt from his upcoming new book "Free" in the recent edition of Wired Magazine. If you are in the Content / Media Business, this is indeed a must-read (the book, as well as this excerpt). Here are the nuggets I found (quoted from Chris / Wired) - I couldn't have said it better myself! The [links] are added by me, though.

• "The most important thing is relevance. We'll always choose a "low-quality" video of something we actually want over a "high-quality" video of something we don't" [comment: watch this video where I speak about Context and Content = Kings]

• "What this boils down to is the difference between abundance- and scarcity-based business models. If you're controlling a scarce resource, like the prime-time broadcast schedule, you have to be discriminating. There are real costs associated with those half-hour chunks of network time, and the penalty for failing to reach tens of millions of viewers with them is calculated in red ink and lost careers... But if you're tapping into an abundant resource, you can afford to take chances, since the cost of failure is so low. Nobody gets fired when your YouTube video is viewed only by your mom"

• "Sound schizophrenic? That's the nature of the hybrid world we're entering, where scarcity and abundance exist side by side. We're good at scarcity thinking—it's the 20th-century organizational model. Now we have to get good at abundance thinking, too" [comment: yes, indeed, there's no cookbook, yet!]

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Announcing virtual presentations and speeches

As you may have guessed from my travel schedule (see sidebar) I get a constant stream of new people and companies, conference organizers, existing clients and all kinds of organizations that want me to go somewhere and make a presentation, hold a keynote speech or run a think-tank event; from all over the world, and on many different topics. If I actually accepted each invitation I am quite certain I could literally travel from one speaking engagement to the next, for pretty much the entire year. That would certainly get me Red Carpet status with most of the 8 airlines that I usually travel with, I guess.

There have always been a good many logistical challenges in organizing think-tanks and other events; however, the current financial crisis has definitely resulted in much tighter budgets, pretty much everywhere. Increasing concerns for the environment are also palpable - making countless long-distance trips for the sole purpose of a 90-minute speech and subsequent panel discussion is probably not the best example for the efficient use of energy.

Therefore I have been busy exploring new ways how I can present to - and have real conversations with - interested clients from anywhere on the globe without continuously enriching the likes of Lufthansa, Swiss and Singapore Airlines. Again, I do believe that nothing beats the live performance, the face-to-face meetings and the actual experience in what people have started to call the 'meat-space' (as opposed to cyber-space I guess), but maybe some new ways can be explored that offer a similar, and less costly experience.

I recently found a very interesting platform in the new Present.io offering (a new service by Drop.io), which (for anyone with a browser and good Internet access, no additional software is needed) allows for remote presenting, commenting and chats, as well as sporting integrated conference calling, too; all in-one place, and for free. Well, at least for the basic version - they are banking on the Feels-Like-Free / Freemium model, too, and it's working with me already. Good stuff.

The combination of services like Present.io with a live phone call, or Skype / iChat Video, has worked out really well, already, and so going forward, I will start to accept more requests for virtual / remote presentations (some people use the term 'webinars' btw).

I look forward to experimenting with you on what the best formats for this may be; if you have any other ideas for better technical solutions please use the comment box or below or contact me via Twitter or eMail; the same goes for anyone interested in booking a virtual presentation.

Lastly, here is an example of the Present.io / Drop.io widgets:

Discover Simple, Private Sharing at Drop.io

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Twitterfountain: the coolest Twitter widget yet

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Rolodex 2.0 - the social web is becoming our address book

Remember when we (meaning those of us 40+ years old) had those red moleskin diaries and notebooks with the names, addresses and phone numbers of all our friends and other contacts?  Remember when we had those impressive Rolodexes on our desks, with thousands of business cards in them? When 'having a huge Rolodex' meant having a lot of power? When we painstakingly scanned those 1000s of business cards we garnered at conferences and tradeshows so that we could load them into our databases, or maybe add them to our eMail news list? Remember when we had those crucially important mobile phone numbers in our phone's memory (or on the SIM card) only? When Outlook had all our email contacts? When having a computer hard-disc crash or a stolen machine meant that many of our contact details were lost forever because we were always sloppy with our back-ups?

Well, no more: all of this is quickly becoming the past, for these reasons:

• Everyone that I meet face-to-face is sooner or later added to at least one of my social networks (that is, if I actually enjoyed meeting them, of course), freeing me from the onerous task of having to manually keep track how exactly I met them. For me, LinkedIn has in effect become my electronic rolodex, and finding, retrieving and filtering people has become very simple. I constantly use LinkedIn to keep track of people that I have met, and to re-connect with them as needed - and I keep LinkedIn pretty much reserved for people I have met in the 'meat-space'  rather than just online.  The bottom line is that just like GMail has greatly simplified searching through your emails, LinkedIn, Twitter and Facebook are simplifying my people search; by far beating the traditional methods of keeping my contacts up-to-date.
• Everyone that emails me (or vice versa) is saved in my gMail contacts list - all I need to do is search (and yes, I do export my contact list regularly). Why would I export lists of addresses if I can always search for them? Why do I need Plaxo or iContact if I have GMail plus my social networks (and now, realtime search and Friendfeed streams?
• Twitter, Friendfeed and Facebook keep very good track of my current conversations and make it easy to see my most active network members, so if I need to find someone I can certainly do it here very quickly
• Google private bookmarking tools and Yahoo's Delicious (which I keep public) make it very easy to bookmark and annotate people that are relevant to me, for later retrieval. I do this with 1000s of people I have met - I quickly bookmark your profile and add a few keywords, and even if I totally forget about anyone I will still be able to find them 5 years from now.
• Apple's slick MobileMe keeps track of my datebook, my contacts and my files; and on all my Macs and iPhones and iPods

So are we becoming dependent on these new contact platforms? I guess so - but maybe it's better than looking stuff up the way we used to, anyway...?  You tell me.

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WhereIsItGoing: first audio podcast of twitter-based session, answering 'futuristic' questions posted via Twitter

A few days ago I announced a new project with my friend and fellow Futurist Glen Hiemstra. We are taking questions via Twitter using the #wiig hashtag, before and during each week's session, and try answer them on the spot (video and audio). The video will be published at Whereisitgoing.com shortly (but please have mercy - we are still  very much in the beginning stages as far as the production quality is concerned), but for now, the audio track is below. Update: the video is here, now.

Here are the first few questions we received (thanks to @rzaragoza  @eighteyes and @gregorylent for chiming in!)

Below is the audio stream with the conversation we had based on these questions (I guess that means we tried to actually answer these questions...). Drop.io does not provide a very nice audio player, yet, but it streams nicely, anyway;)

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Chris 'LongTail' Anderson video on 'Free - The Future of a Radical Price'

A lot of good morsels here - way to go, Chris. Just ordered the new book, too.

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