Update On The Free Summit: Speakers Announced

from the update dept

Wanted to give everyone an update on The Free Summit that I'll be emceeing next month. We've lined up most of the speakers, so check out the agenda. As already mentioned, Chris Anderson will be doing the keynote, talking about some of the concepts from his new book on "Free" (I'm reading it now -- and it's great). There will also be two panels that should be quite interesting. One of the things that we wanted to ensure was that the panels we put together didn't just involve people who all agreed with each other (or with me, certainly), so that the discussion would remain quite interesting. So, on the panel about music, we're having Jim Griffin (who I've certainly clashed with in the past) from Choruss, the major record label-backed attempt to come up with a new business model for licensing music, Gigi Sohn from Public Knowledge, the public advocacy group that has taken a strong pro-consumer position on copyright issues, and Dave Allen from the seminal band Gang of Four, a big advocate of "free," and who now helps plenty of other bands learn how to embrace and profit from "free." It should be an exciting discussion.

We've also got a panel on the news business, involving Kara Swisher from AllthingsD/Dow Jones, Dan Gillmor, the director of the Knight Center for Digital Media Entrepreneurship as well as one of the first "old school" reporters to jump on the participatory media bandwagon, Alan Mutter, a journalism professor/investor/entrepreneur/former reporter who's been a vocal critic of newspapers' decision to go free online (calling it "the original sin") and Marshall Van Alstyne, an economics professor from Boston University and MIT who has studied information economics and who recently debated with Mutter and others on the Freakonomics blog about news organization business models. There will also be a session from Alex Iskold (another person I've disagreed with in the past) who will be presenting on "the dangers of free."

What's great about this is that it really is a mix of folks with (sometimes starkly) different opinions -- but who all believe quite strongly in their positions and are willing to discuss and defend them. I'm hopeful that what comes out of all of this will be some great new insights from all sides about what "free" means in terms of business models and economics today.

Finally, we're excited to announce that, as a part of this, we'll be including a mini-Techdirt Greenhouse at the beginning of the event. For those who have followed Techdirt for a while, you may recall we ran a series of "idea workshops" called the Techdirt Greenhouse, where individuals would do short, 5-minute presentations not as a "demo," but to discuss a challenge they were facing -- and then we broke up the audience into workgroups to take on those challenges and come up with ideas/plans/suggestions. Those events were a lot of fun, and we received a ton of great feedback. We've been meaning to start them up again (and we still get emails from attendees demanding we do so), but have been too busy to focus on them -- so this is a good way to sneak in a mini-Greenhouse, and also get us geared up to do a full Greenhouse again in the near future. In this mini-Greenhouse, we'll be focusing on the challenges associated with using "free" in a business model. It should be a lot of fun...

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A Good Suggestion For Funding Journalism... And A Great Explanation For Why Micropayments Don't Work

from the fantastic dept

With a bunch of old school journalism industry guys suddenly rehashing the old and tired debate over micropayments for news, the folks over at Freakonomics put together a little "quorom" where they asked four different people, with varying viewpoints, about the whole "micropayments for news" issue. Two of them, William Baker and Alan Mutter, support micropayments. I find their arguments not particularly compelling, as they both seem to focus on why newspapers need money, not why anyone would want to pay. On the other side of the coin is Clay Shirky and Marshall W. Van Alstyne, a professor at BU. Shirky, not surprisingly, does an excellent job rehashing his reasons for why micropayments don't work, but I have to say that Van Alstyne's reasoning is even better (and quite eloquent):

Micropayments won't solve newspapers' pay-or-perish problem, at least not under current proposals. There are many reasons why micro-scalping readers won't work, but let me start with two: the unique properties of information goods, and inefficiency.

News is not like an iTunes song; it's perishable. Today's front page is tomorrow's fish wrap, and we don't need to replay it. If anything, a reader benefits more from a second source than repetition from the first. Facts are delivered; songs and movies are created. Facts also can't be owned, so when the Internet places geographically dispersed media in direct competition, the price of facts falls to marginal cost. In digital markets, that's zero.

Micropayments introduce friction into an otherwise frictionless world. This means that no matter how efficient they become, it is more efficient to bundle. If a person makes one or two transactions with a news source, it's more efficient to aggregate lots of them and bill a single advertiser once. If a person makes frequent transactions, it's more efficient to aggregate those and bill that person once as a subscription. Any increase in micropayment efficiency improves bundling efficiency at least as much, because the gains accrue over more transactions.

Putting micropayments on news is like putting tollbooths on an open ocean. Internet users, awash in a sea of information, will avoid new barriers by navigating around them. And frankly, the interests of a free society are rarely served by building barriers between the people and their news.

And, unlike the actual newspaper guys, Van Alstyne actually then makes suggestions for ways that newspapers can both add value and give someone (if not the consumer) a reason to buy. He has three suggestions, and you can click through to read them all, but I found the last one the most interesting:

Invert the whole business. Use the friction of micropayments to solve a consumer problem and stem the flood of information from advertisers vying for their attention. Advertisers can bid for limited units of people's time. This increases ad revenues and helps match particular ads to particular people. Vendors will bid low to rent New York apartments to sports fans checking scores for the Oakland A's, but bid high to offer next week's tickets. Publishers need to give up on the idea of profiting from distribution and focus on the idea of matching people to content.

The trick is not to add new types of costs, but to add new types of value.

What a surprise. It looks like the folks outside the industry understand how to make the industry work better than those inside of it.

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