Free: The Future of a Radical Price

Jul 16, 2009

Los Angeles Public Library Library Foundation of Los Angeles

Chris Anderson talked about his book Free: The Future of a Radical Price (Hyperion; July 7, 2009). He explored the next revolution in business, which is making more money by initially providing products for free. This is most relevant in the software industry and digital media, because it can be so easy to steal what is readily available .. Read More
Chris Anderson talked about his book Free: The Future of a Radical Price (Hyperion; July 7, 2009). He explored the next revolution in business, which is making more money by initially providing products for free. This is most relevant in the software industry and digital media, because it can be so easy to steal what is readily available on a computer and/or on the web. The idea, said Mr. Anderson, is to get one addicted to the stolen/free product, then charge for it. Mr. Anderson talked about the history of cross subsidies, free premiums, and other retail models, including the effects of piracy. He also talked about current enterprises such as Google and Twitter. Mr. Anderson was interviewed on stage by Kai Ryssdal. He then responded to questions from members of the audience. Chris Anderson is the editor-in-chief of Wired magazine. He is the author of The Long Tail: Why the Future of Business Is Selling Less of More. Produced by the Library Foundation of Los Angeles, ALOUD Business Forums are held in the Central Library's Mark Taper Auditorium after a breakfast.

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TRANSCRIPT

TIME SPEAKER TEXT
00:00:10 Unidentified Speaker CHRIS ANDERSON EDITOR AND CHIEF OF "WIRED" TACKLES MORE ISSUES OF INTEREST WHICH IS PRODUCING BOOKS...
00:00:33 Unidentified Speaker IT IS MY GREAT PLEASURE TO BE HERE WITH YOU THIS MORNING. I AM A HUGE FAN OF YOUR WORK AND OF THE...
00:00:48 Unidentified Speaker UH-HUH.
00:00:51 Unidentified Speaker FREE, YOU GOT TO BE KIDDING ME.
00:00:54 Unidentified Speaker IT'S TECHNICALLY GOT TO BEGIN WITH H.
00:00:58 Unidentified Speaker I KNOW IT TOOK YOU 250 PAGES TO WRITE THE BOOK.
00:01:01 Unidentified Speaker BUT MY CHILDREN WHEN I TOLD -- THAT DAD'S WRITTEN A BOOK ABOUT HOW STUFF CAN BE FREE ON THE INTERNET,...
00:02:39 Unidentified Speaker BUT WHAT WE'RE DOING REALLY AND GOOGLE IS A GREAT EXAMPLE BECAUSE I'M A HUGE USER OF THE PRODUCT....
00:02:58 Unidentified Speaker I SHOULDN'T TO HAVE TELL THIS RADIO GUY HERE THAT IT'S POSSIBLE FOR THINGS TO BE REALLY FREE. RADIO...
00:04:15 Unidentified Speaker CAN I GO THROUGH THREE YEARS
00:04:17 Unidentified Speaker YES.
00:04:20 Unidentified Speaker 20th CENTURY FREE IS WHAT ECONOMISTS CALLED A CROSS-SUBSIDY YOU GET ONE THING FOR FREE AND YOU PAY...
00:07:23 Unidentified Speaker FAST FORWARD, THOUGH, 100 PLUS OR MINUS USE. MOUNTAIN VIEW CALIFORNIA THEY START A SEARCH ENGINE COMPANY...
00:07:57 Unidentified Speaker THERE ARE WINNER TAKE ALL MARKETS. AND WINNER TAKE ALL MARKETS ARE THE ONES THAT WORK. FACEBOOK BENEFITS...
00:09:36 Unidentified Speaker YEAH.
00:09:38 Unidentified Speaker THEY DON'T HAVE ANY REVENUES. THEY DON'T NEED ANY REVENUES IT'S SO CHEAP TO INVENT. YOU CAN INVENT...
00:10:35 Unidentified Speaker MICROSOFT HAS HAD FORTY YEARS OF COMPETING. MICROSOFT WAS ONE OF THE FIRST SWEAR COMPANIES -- IN THE...
00:13:05 Unidentified Speaker THERE'S AN ELEMENT OF THIS BOOK THAT REQUIRES TO YOU WRAP YOUR HEAD AROUND THE NOTION OF PRICE BECAUSE...
00:13:26 Unidentified Speaker YEAH. YEAH, PRICE SEEMS SO OBVIOUS TO US AND YET IT'S SO MYSTERIOUS. YOU KNOW, TALK ABOUT HOW STUPID...
00:13:42 Unidentified Speaker I'M SAVING A PENNY.
00:13:46 Unidentified Speaker WE ROUND IT DOWN TO 2. HOW DOES THAT HAPPEN? ADAM SMITH SPENT TWO YEARS SPINNING HIS WHEELS ABOUT...
00:15:09 Unidentified Speaker FREE DOES NOT IMPLY NO VALUE.
00:15:10 Unidentified Speaker WELL, HERE'S THE PROBLEM. WE'RE SEEING THE ADAMS WORLD AND THE BITS WORLD. IN THE ADAMS WORLD FREE...
00:16:18 Unidentified Speaker 7 OUT OF 10 PEOPLE WHO STARTED A TWITTER ACCOUNT WHICH I AM TWIT -- TWEET, WHATEVER IT IS FOUR TIMES...
00:16:29 Unidentified Speaker WELL, I DON'T KNOW WHETHER THAT'S A HIGH RATIO OR A LOW RATIO. I'M A BIG TWITTER USER. IF THEY CHARGED...
00:16:42 Unidentified Speaker WHY? THIS IS A TWITTER CONVERSATION WHICH I DIDN'T MEAN TO GET INTO IT.
00:16:46 Unidentified Speaker WHY DO I TWEET? BECAUSE I'M LAZY. YOU KNOW, I USED TO BLOG A LOT. IT'S EASIER. WE'RE FINDING THE...
00:17:02 Unidentified Speaker HOW ABOUT NO CHARACTERS. HOW ABOUT YOU AND I GET A BUSINESS TOGETHER, NO CHARACTERS AND WE JUST SELL...
00:17:08 Unidentified Speaker IT'S OUR FACES.
00:17:09 Unidentified Speaker THOSE GOOGLE GUYS THINK THEY HAVE SOMETHING, RIGHT? YOU SAY SEVERAL TIMES IN THE BOOK A CERTAIN THING...
00:17:47 Unidentified Speaker HE SUGGESTED YOUTUBE COULD QUALIFY FOR T.A.R.P. FUNDS? HE'S A VERY GOOD WRITER AND A SMART GUY BUT...
00:17:56 Unidentified Speaker I'M SHOCKED. MY COLLEAGUE IS MY SISTER PUBLICATION OF CONDI NAST. BUT HE KNOWS NOTHING AT YOUTUBE....
00:20:58 Unidentified Speaker DECONSTRUCTION OF MALCOLM GLADWELL ASIDE WHAT ABOUT THE NOTION CHEAP ENOUGH TO BE CONSIDERED FREE...
00:21:12 Unidentified Speaker HOLD THIS ENTIRE CONVERSATION IS PREDICATED ON THIS IDEA OF MARGINAL COST GOING TO ZERO.
00:21:17 Unidentified Speaker MARGINAL COST GOING DOWN AND BEING CLOSE TO ZERO. THEY NEVER GO ENTIRELY TO ZERO BUT THEY GET CLOSE...
00:21:29 Unidentified Speaker CLOSE ENOUGH TO ZERO MARGINAL COSTS HOW DOES THAT QUANTIFY AS FREE IN THIS ECONOMY?
00:21:36 Unidentified Speaker IT'S FREE TO THE CONSUMER IN THAT YOU CHOOSE NOT TO CHARGE. SO FOR THOSE -- MARGINAL COSTS, JUST A...
00:23:10 Unidentified Speaker WHICH IS A FINE SHOW.
00:23:13 Unidentified Speaker NOT TO PUT YOU ON THE SAME SPECTRUM.
00:23:16 Unidentified Speaker THERE ARE PLACES YOU CAN'T GO 'CAUSE THEY'RE TOO WONKY AND THIS ENTIRE CONVERSATION WOULD BE TOO WONKY...
00:24:17 Unidentified Speaker TALK ABOUT THE SCARCITY CONUNDRUM ECONOMICS AS YOU QUOTE IN THE BOOK THE STUDY AND THE SCIENCE OF...
00:24:41 Unidentified Speaker SO SCARCITY IS A GOOD THING IF YOU HAPPEN TO OWN THE SCARCE COMMODITY. YOU KNOW AS GOLD MINERS KNOW...
00:26:30 Unidentified Speaker NO, BUT IT'S ALL CRAP.
00:26:32 Unidentified Speaker THE WAY NATURE APPROACHES EVOLUTION IS THAT LIKE WE'RE GOING TO TRY EVERYTHING. WE ARE GOING TO --...
00:26:58 Unidentified Speaker WE TREASURE THEM MOST OF THE TIME.
00:27:01 Unidentified Speaker I'M TRYING TO ENSURE THAT THEY REACH ADULTHOOD. [LAUGHTER]
00:27:08 Unidentified Speaker A TUNA WILL LAY 3 MILLION EGGS. IT DOES NOT ENSURE THAT ITS CHILDREN REACH ADULTHOOD. AND IN ECONOMIC...
00:27:35 Unidentified Speaker OR WE WATCH SUSAN BOIL SING "I DREAM A DREAMED" 2 MILLION TIMES.
00:27:40 Unidentified Speaker YOU HAVE A PROBLEM WITH THAT.
00:27:42 Unidentified Speaker NO, IT WAS A LOVELY SONG BUT THAT WAS THE FUTURE OF TELEVISION?
00:27:46 Unidentified Speaker HERE'S THE DIRTY SECRET, RIGHT? WE'RE NOT ALL ALIKE. WHEN I WAS A KID, WHEN I CAME HOME FROM SCHOOL...
00:28:05 Unidentified Speaker I HAD MCHALE'S NAVY.
00:28:08 Unidentified Speaker I WATCHED GILLIGAN'S ISLAND IF YOU WATCHED THE NIELSEN STATISTICS OF 1977, IT TURNS OUT 14-YEAR-OLD...
00:28:45 Unidentified Speaker TOTAL FOR SATURDAY AND
00:28:47 Unidentified Speaker I READ IT TWO HOURS SATURDAY AND TWO HOURS SUNDAY.
00:28:51 Unidentified Speaker YOU KNOW, THERE ARE TIMES WHEN THEY'RE REALLY ANNOYING BUT THEY GET MORE. IT'S WEIRD HOW THAT WORKS....
00:29:04 Unidentified Speaker I HAVEN'T FIGURED THAT OUT. MORE THAN YOU CARE TO KNOW ABOUT OUR KIDS.
00:29:08 Unidentified Speaker YOU COULD HAVE TWO HOURS OF "STAR WARS." YOU CAN WATCH "STAR WARS" AS GEORGE LUCAS ONLY DREAMED IT,...
00:29:44 Unidentified Speaker THE VOICE ACTING, BUT IT'S RELEVANT. IT'S WHAT THEY WANT. AS A MATTER OF FACT, THEY ACTUALLY -- THEY...
00:30:15 Unidentified Speaker AND IT ALL HAPPENS BECAUSE OF THIS ABUNDANCE WHICH LETS US GET TO FREE.
00:30:21 Unidentified Speaker BECAUSE WE LET 7 YEARS OLD WASTE STORAGE BANDWIDTH AND PROCESSING WE DISCOVERED THE FUTURE OF TRANSITION....
00:30:31 Unidentified Speaker HORRIFYING. HOW MUCH TIME DO WE HAVE. 9:15 OR 9:30.
00:30:37 Unidentified Speaker 9:30.
00:30:39 Unidentified Speaker THINK OF YOUR QUESTIONS AND WE'LL BRING THE MICROPHONE OVER. SINCE YOU BROUGHT IT UP A MOMENT AGO,...
00:31:06 Unidentified Speaker YEAH, THIS IS PART OF THE META-BANE OF MY EXISTENCE WHICH IS PRINT DEAD WHICH PEOPLE LOVE ASKING THE...
00:31:22 Unidentified Speaker IT'S A NEW BOOK, RIGHT?
00:31:23 Unidentified Speaker YEAH. LET'S TALK ABOUT NEWSPAPERS IN PARTICULAR. YOU KNOW, WHAT WE'RE DISCOVERING IS THAT, YOU KNOW,...
00:33:46 Unidentified Speaker MORE -- YOU NEED MORE JOURNALIST.
00:33:48 Unidentified Speaker IF THE "SAN FRANCISCO CHRONICLE" SENDS ONE OF THEIR PAPERS, HOW MUCH VALUE IS THAT REPORTER IS DOING....
00:36:07 Unidentified Speaker THERE'S A JOURNALISM QUESTION THAT PASSAGES WERE TAKEN WITHOUT A ATTRIBUTION FROM OTHER SOURCES SUCH...
00:36:17 Unidentified Speaker THERE'S TWO THINGS GOING ON HERE. ONE IS THE SORT OF QUESTION WHETHER YOU SHOULD CITE WIKIPEDIA AND...
00:36:25 Unidentified Speaker SHOULD YOU USE WIKIPEDIA.
00:36:29 Unidentified Speaker I THINK YOU SHOULD. I BELIEVE YOU SHOULD CITE WIKIPEDIA AND I DO CITE IT IN THE BOOK, BUT IN THE BOOK...
00:38:35 Unidentified Speaker GET YOUR QUESTIONS READY AND TED WILL COME OVER WITH THE MICROPHONE. TO WRAP UP THE WIKIPEDIA IF OUR...
00:38:52 Unidentified Speaker WHEN YOU CITED WIKIPEDIA AT THE BOTTOM WHERE IT SAYS WHAT THE SOURCES WERE DID YOU GO TO THE SOURCES...
00:39:22 Unidentified Speaker HOW WOULD YOU ASSESS THE SITUATION WITH MYSPACE? YOU KNOW, TWO OR THREE YEARS AGO THIS WAS THE WINNER...
00:39:38 Unidentified Speaker WE SHOULD FAIL LIKE THAT. MYSPACE IS THE THIRD LARGEST SITE ON THE INTERNET TODAY. I'M NOT TOO WORRIED...
00:41:38 Unidentified Speaker DOES A FREE ECONOMY MAKE INNOVATION EASIER OR HARDER?
00:41:41 Unidentified Speaker FREE ECONOMY MAKES THE INNOVATION MUCH, MUCH EASIER FOR TWO REASONS. THE FIRST IS THAT THIS IS BOTH...
00:41:51 Unidentified Speaker YES.
00:41:52 Unidentified Speaker LET ME GIVE YOU AN EXAMPLE. ONE OF MY SIDE PRODUCTS IS A ROBOTICS COMPANY. WE DO OPEN SOURCE HARDWARE,...
00:42:05 Unidentified Speaker DO YOU PUT THE BLUEPRINTS ONLINE?
00:42:08 Unidentified Speaker THE SCHEMATICS, THE CIRCUIT BOARD WE PUT IT ALL ONLINE. OPEN SOURCE HARDWARE -- THIS WILL TERRIFY...
00:42:24 Unidentified Speaker EVERYBODY CAN HAVE ONE.
00:42:28 Unidentified Speaker DARKEN THE SKIES. YOU KNOW, WE'RE COMPETING WITH THE MILITARY INDUSTRIAL COMPLEX BY GIVING AWAY STUFF...
00:42:35 Unidentified Speaker HOW IS THAT GOING?
00:42:36 Unidentified Speaker IT'S GOING GREAT. THE AIR FORCE IS REALLY, REALLY INTERESTED IN WHAT WE'RE DOING. SO THIS IS WHAT...
00:43:40 Unidentified Speaker YEAH, HOW DO YOU MAKE OUR MONEY.
00:43:42 Unidentified Speaker IF YOU TAKE ALL OUR STUFF AND MAKE YOUR OWN -- IF YOU'RE A CHINESE COMPANY YOU CAN RIP US OFF AND...
00:44:28 Unidentified Speaker NEXT QUESTION, RAISE YOUR HAND.
00:44:30 Unidentified Speaker DO YOU THINK THIS CONCEPT WILL CHANGE THE WAY THAT HIGHER EDUCATION WORKS IN THAT LONG AGO THERE WERE...
00:44:54 Unidentified Speaker A LOT OF UNIVERSITIES ARE -- SO MIT HAS OPEN COURSE WHERE THEIR ENTIRE CURRICULUM IS ONLINE. HARVARD...
00:45:42 Unidentified Speaker UH-HUH.
00:45:49 Unidentified Speaker MY ROBOT JIKICS COMPANY I WAS LOOKING FOR A CTO AND, YOU KNOW, I WENT TO OUR BOARDS AND I FOUND THIS...
00:47:08 Unidentified Speaker YOU HIRED HIM.
00:47:09 Unidentified Speaker HELL YEAH, HE'S MY PARTNER, 50/50.
00:47:15 Unidentified Speaker HI, I'M RODERICK AND MY QUESTION IS -- CLOUD COMPUTING IS THE NEXT THING IN THE BUSINESS SECTOR. ...
00:47:28 Unidentified Speaker I'M NOT SURE I UNDERSTAND THE QUESTION. PERSONAL PRIVATE MARKET IN WHAT WAY?
00:47:32 Unidentified Speaker FACEBOOK IS VERY POPULAR AND YOUTUBE AND SO WHAT ELSE WOULD YOU SEE -- AND TWITTER, OF COURSE, IS...
00:47:40 Unidentified Speaker I HAVE NO IDEA. EVERYONE ALWAYS ASKS ME WHAT'S THE NEXT THING. NOBODY KNOWS. I DIDN'T KNOW TWITTER...
00:48:21 Unidentified Speaker I THINK WE CAME UP WITH IT, ZERO CHARACTERS AND YOU AND ME
00:48:25 Unidentified Speaker TWIT. IT'S SHORT.
00:48:30 Unidentified Speaker MY QUESTION IS ABOUT HUMAN EVOLUTION AND CONTINUING TO RE-ENFORCE CONSUMERISM. IF IT ISN'T FREE, SOMEBODY...
00:49:00 Unidentified Speaker WE ONLY TALKED ABOUT THE ADVERTISING FORM OF FREE -- ACTUALLY THE BOOK IS BOOK ABOUT FREE. THE INVERSION...
00:51:09 Unidentified Speaker IT'S A GREAT QUESTION. WHAT HAPPENS IN A GENERATION WHEN WE'RE ALL USED TO THIS
00:51:15 Unidentified Speaker LAST QUESTION. [INAUDIBLE]
00:51:21 Unidentified Speaker CHRIS' FIRST BOOK.
00:51:22 Unidentified Speaker YEAH, THAT'S A GREAT QUESTION. THANK YOU. SO THE LONG TALE WAS AN EXTENSION OF THE GILLIGAN'S ISLAND....
00:52:35 Unidentified Speaker I'M GOING TO TAKE THE QUESTIONER'S PREROGATIVE OF THE LAST QUESTION. THIS MIGHT NOT BE THE OPPORTUNE...
00:52:45 Unidentified Speaker I PREANNOUNCED THIS BUT I'LL TALK ABOUT IT. I THINK I'M NOT GOING TO WRITE ABOUT THE INTERNET NEXT...
00:53:37 Unidentified Speaker THANK YOU. [APPLAUSE]
00:53:46 Unidentified Speaker CHRIS ANDERSON IS THE EDITOR-IN-CHIEF OF "WIRED" MAGAZINE. HE'S THE AUTHOR OF THE LONG TALE

NOTE: The transcript for this program was compiled from uncorrected Closed Captioning.

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  • Anderson, Chris
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