Malcolm Gladwell dissents from Chris Anderson’s *Free*

Here are excerpts and the full original article.  Excerpt:

Credit Suisse estimates that YouTube will lose close to half a billion
dollars this year. If it were a bank, it would be eligible for TARP funds.

I haven't read the book yet, but hope to report back when I do.  For this pointer I thank Eric Wignall.

Addendum: Via Chris F. Masse, Anderson responds.

Comments

Is YouTube a source of systemic risk?

i wonder why the new yorker chose to ignore that anderson's book appears to consist at least in part of text that he took, "free," from other sources without attribution?
http://www.vqronline.org/blog/2009/06/23/chris-anderson-free/
http://www.edrants.com/chris-anderson-plagiarist/

I like Anderson. His ideas are far from sound, and are generally based on only the slimmest supporting evidence. But there's something inspiring about the way that he presents them nonetheless. I'll confess, "The Long Tail" played at least some part in steering me towards economics for my graduate field.

And while Gladwell does a good job of gleefully pointing out ways in which Anderson's arguments can fall apart, he's failed to convince me that there isn't still a germ of truth in what Anderson lays out in the book. Gladwell points to the WSJ as an example of why paid subscriptions are still viable, at a time when the entire publishing industry is crumbling around it?

Gladwell is another hack competing with Anderson in the field of magazine feature-length articles extrapolating anecdotal evidence into book-length unsupportable conclusions. To be fair to Gladwell, he has not been accused or caught plagiarizing as Anderson has. That said, it's amusing how Gladwell unselfconsciously criticizes Anderson's glib writing style and oversimplifications.

An obscure academic journal, in contrast -- one that publishes detailed, sophisticated information of interest to a few hundred experts -- would never be able to sustain itself by going free.

Nonsense. The authors of articles written for 'obscure academic journals' are paid little or nothing for their writing. Ditto the academics who edit the journals and review the prospective papers. The credit for having the paper published is the reward for the author. These journals used to be run as quasi-non-profits until the big academic publishers snapped them up and started engaging in big-time rent-seeking by charging an arm and a leg for subscriptions (subscriptions that academic libraries could hardly do without).

In response, a there have been efforts to turn academic publishing into open-source operations, for example:

http://math.ucr.edu/home/baez/journals.html

It may not be true of all content, but academic papers are absolutely the kind of content that *should* be free. That Gladwell cites this as a prime example of the opposite doesn't bode well for his argument in general.

So is the long tail free? Must be more expensive to make stuff and distribute it to the long tail than to the fat head, right? Anderson? Anderson? Anybody? Bueller?

Slocum, aren't you doing exactly the kind of optimism Gladwell talks about? That is, you're saying the cost of the content of academic journals is small, and since it is, therefore the cost of producing such journals is small. Is it the cost of the content that's the limiting factor? Do printing and distribution count for nothing?

You also seem to be saying, even if your assumptions are valid, that since such journals could in theory be priced inexpensively one should pay no attention to the observable fact they're priced expensively in practice. Your theory may be right, but if it never has tangible results, so what?

I'm more surprised Gladwell doesn't give the obvious argument that free indicates there's no demand for something. Anderson may well be right that there are things for which charging anything at all will completely dry up demand, and it's only by making them free that the market becomes at all interested in such detritus. I wouldn't call that an endorsement of such items' quality, though.

Slocum, aren't you doing exactly the kind of optimism Gladwell talks about? That is, you're saying the cost of the content of academic journals is small, and since it is, therefore the cost of producing such journals is small. Is it the cost of the content that's the limiting factor? Do printing and distribution count for nothing?

No, printing and distribution count for little -- in fact, few scholars access the physical journals any more. Instead, they download PDF files of articles. Almost the same PDFs, BTW, that were prepared by the authors (authors of academic articles don't just write the text, the format it, and provide all the graphics and figures as well) and that were previously distributed online as pre-prints by the author. What the journals add of value is peer-reviewing and editing, but those performing these functions are paid little as well. No, the publishers add little value. The cost of printing, binding and mailing paperback journals is minimal in comparison to the outlandish subscription costs (and the the outlandish costs of online access). The publishers bought sleepy but prestigious journals for pennies on the dollar in order to extract full rents from the reputation--that's all.

You also seem to be saying, even if your assumptions are valid, that since such journals could in theory be priced inexpensively one should pay no attention to the observable fact they're priced expensively in practice. Your theory may be right, but if it never has tangible results, so what?

The history is that journals did not used to be priced expensively until the big publishers realized that they could snap up prestigious journals and jack the subscription rates and libraries would have little choice but to pay. Just as the costs of distribution were dropping to near zero, the subscription costs increased dramatically. This is a relatively new phenomenon (e.g. the last decade or so). And there has been progress, in response to this, in creating 'open source' online journals and academic paper repositories (success rates vary depending on the field).

Hal - Ever heard of PLoS? Totally free, top-tier, academic journals in several biological fields. The thing you are not mentioning, is that even though the expensive journals you are arguing about are expensive, they also charge the authors to be published! PLoS is a rapidly expanding journal set (in some fields - like Computational Biology - the top journal) that doesn't charge readers at all, and their publication fees are similar to the traditional journals. But readership has exploded.

@Slocum "academic papers are absolutely the kind of content that *should* be free"

Amen to that.

(1) A huge amount of this stuff is financed by taxpayers on the grounds that this work somehow benefits the society they are paying taxes for.

(2) By putting it behind a wall, and a stupidly high wall at that ($35 per article?? Really??) it potentially further encourages the isolation of academic research from nonacademic life.

(3) It leads to those interested in a topic to read the pre-reviewed versions, where they are still available (e.g. working papers on SSRN). One hopes that, on the whole, peer review serves to improve the work from the working paper version.

(4) Of course, academics themselves don't care much. They have access through their research libraries and download PDFs. But really, what's the point of this transfer of money from libraries to publishers? Who reads the actual journal titles in the library?

Why has the PLOS model not taken root in all disciplines?

Question: if YouTube was a bank and had made 500M, wouldn't it still be eligible for TARP?

Some times we could not open youtube from China. If youtube could fast speed in Asia, it will earn more money.

Counting government grants that goes to pay for equipment, assays, and salaries I'd estimate the average biological journal value to be, say $100,000.

The journals are there for evaluation of the researchers and how they utilize the resources they are provided.

No free lunches today.

if we build and fund research institutions and pay to educate people
beyond the point of diminishing returns for the research, we may still see
societal benefits in that an educated population is healthier.

>>While the private drug company thinks it deserves $300,000 a treatment, the private for-profit insurer will say no dice, leaving only a few patients rich enough to afford treatment.<< Actually, no. These sorts of orphan drugs rarely have any reimbursement problems. There simply aren't that many patients, so the cost isn't that meaningful for most insurance companies. It is also worth noting that the price of most of these drugs is nearly the same in European countries where the government sets all prices. These countries typically demand big discounts from everything big pharma sells. The fact they don't with these orphan drugs suggests the governments don't have a big problem with the pricing.

70/30 So why isn't the Kindle free?

The Gladwell rebuttal that Anderson ignores infrastructure costs seems to ignore the entire first part of the Anderson hypothesis, which is that digital technology creates a distribution network for ideas where the infrastructure has nearly no cost.

I am reminded of the broadband bubble. If you were to look at the companies creating this infrastructure in the mid-nineties, you would see them losing money and with no hope for profit. If you were a cynic, as Gladwell seems to be, you would conclude that there was no future for affordable, high-speed networks. However, as history has proven, the "folly" of these companies led to all sorts of other information industries springing up.

Anderson is taking the wider view here, saying that there is something happening here, although what it is is not exactly clear. He is not proposing any sort of concrete solution, or even defining a problem; he is simply making an observation.

just fyi, the credit suisse estimate is almost certainly wrong. due to the way internet traffic is charged to ISPs, YouTube has most likely negotiated settlment free - ie free - peering links for the vast majority of its traffic (see here for a more informed analysis of this).

Rob, the e-book will be free.

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