1. NOW HOW ABOUT THAT “FREE” THING? Fara Warner Feb. 19, 2010

2. FREE Google offers free email, photo sharing, blogging, etc. Why? Is it “fair” to make money off of other people’s content—your content, the New York Times, the BBC, the guy in China who uploads videos? How did Google become a $20 billion company if it works off the model of “free?” Search speeds drop every year—half a million servers in 36 data centers—each one cost hundreds of millions to build but the return on investment increases dramatically as Google adds more users. Free makes sense for Google because it makes its investments work harder.

3. FREE Can you apply this economic model to journalism or more broadly “content?” What would be a max strategy for journalism? Why have traditional media found it so difficult and have failed where Google has succeeded? What does media need that it doesn’t have to succeed in the way Google succeeds? The idea that value isn’t lost—it is redistributed. Craigslist taking $30 billion in revenue from newspapers.

4. FREE What does liquidity do to a market? How can media tap into the exponential quality of the digital world? Do we accept that redistribution of revenues can be something as “good” as Wikipedia’s distribution of information that once costs $1000 now makes us smarter so we can make more money? Really?

5. FREE “We could be at the moment where the short- term negative consequences of de-monetization are felt before the long-term positive effects.” In other words, will journalism be forever changed—for the worse—before the network effects of all this content and all these people online get hooked up and start making money? What are our options? Cracking the wall between “church” and “state.” Getting to a point where advertising is content. Delivering ad “content” that is relevant.

6. SIX REASONS FOR THE MIGRATION TO FREE Supply and demand. The old rules of economics still apply. Too much supply, too little demand. What happens?

7. SIX REASONS FOR THE MIGRATION TO FREE Loss of physical form. You steal a book from the library and you feel like a thief. You still a cd from Borders you are a shoplifter. You download a book—what are you? You down load music—what are you?

8. SIX REASONS FOR THE MIGRATION TO FREE Ease of access. Our “search cost” has declined and that also drives us to believe that what we find in the digital realm should be free. We don’t steal the clothing we see online…or do we? Think about Zara and H&M. What is their model for making clothing so cheap that it’s almost free?

9. SIX REASONS FOR THE MIGRATION TO FREE The shift to ad-supported content. Will our habits online begin to change our habits offline?

10. SIX REASONS FOR THE MIGRATION TO FREE The computer industry wants content to be free. Apple doesn’t make money selling music files. It makes money selling iPods. So what happens when iPods become “free.” Technology companies sell the idea of free content as democratic and inevitable. But is it? What happens when we have devices that we can tap into the “cloud” whenever we want without the need for any piece of equipment? Think science fiction. Star Trek

11. SIX REASONS FOR THE MIGRATION TO FREE Generation Free You grew up on free content. You may not understand the phrase: “near-zero marginal cost” but you use it every day.

12. SO WHAT NOW? Stop thinking about selling space. What should we be selling? Attention Consumption Growth of new models of advertising combined with journalism. Link journalism Brand journalism Search journalism

13. NEW WAYS TO “VALUE” MEDIA ONLINE Cost per click Cost per transaction Lead generation Stickiness Contiguity Remember that it isn’t only media companies that are being changed, but advertising and marketing as well.

14. A NEW DEFINITION OF MEDIA Media is simply any form of content. And it must be measured by how long a consumer spends with it or even the quality of time a consumer spends with it. What is your most valuable content? How long do you spend with that content? Do advertisers reach you through that content? Is it more powerful or attractive because it comes through with this content?

15. FIVE MODELS FOR FREE CONTENT THAT MAKES MONEY…FROM THE GAME WORLD. Selling virtual items Content is free, but you pay for faster games, virtual merchandise. “You don’t have to pay but you may want to.” Have you ever bought a digital gift on Facebook? Subscriptions Club Penguin. How different is this from Barbie? You buy a Barbie, but what’s really important are all the clothes etc.? Advertising—as product placement Real estate—buying space in a virtual world Merchandise—Webkinz for news?

16. WHAT CAN WE LEARN FROM THE MUSIC INDUSTRY Free music—but buy the t-shirt Free music—but pay to hear us live Free music—but pay to help us make our music What I disagree with when it comes to the book industry: It is in collapse because its business model doesn’t make sense. Publishers bet on one big bestseller to carry the weight of all the other books that never make a dime. If that’s not an industry in collapse I’m not certain what is.

17. FLAT WORLD KNOWLEDGE EXAMPLE Give away textbooks—or close to it—in digital form, but have students pay for print on demand, audio books, flash cards, other study aids. Why does this work…because it destroys the used book market—which is a textbook publishers worst enemy. There are no “used” textbooks in a digital world. For authors, royalties happen faster and books can be updated more often—meaning more royalties. So free isn’t really free—just cheap and easy.

18. ECONOMIES OF FREE Freemium economy A few paying subscribers pay for the rest of us who don’t want to pay. Defined by a nonmonetary currency Facebook friends give you reputational currency. Attention currency

19. NEWS WEBSITE CRITIQUES Lauren Davies Jill Ferree Samantha Zack