The “Anderson Switch” Appears To Be On Target

”Things that are paid will become free and vice versa.” What Chris Anderson, author of The Long Tail, says here appears to be exquisitely true. I now pay to listen to satellite radio; my cable TV service is a long way from the days of free broadcast television. Would I go back to free. Never.

Music and video, at least in digital form, appear to be heading the other way, perhaps helped along recently by the grand salesman of digital: Steve Jobs. After all, it is called free enterprise, and while it is important to note there are many things you can get these days for “free,” they are usually part of a larger marketing schema to get you into the paying zone.

Companies like MarketingProfs, 37signals and scores of other examples abound. There is the free Google Earth and then there is the $400 Google Earth Pro.

The economics of content are changing, but if we as consumers still want great music, great movies and other well-developed entertainment, some of the providers of that content will still need to get paid for it. The new digital landscape will lower prices just like mass production did in the last century for a whole range of goods, but there will still be abundant profit models. Back then, horse carriage makers went broke; Ford got rich. New business empires were built on the crumpled foundations of previous eras.

Enabled by the new tools of technology and Web 2.0, others will continue to produce free content (some of it good) for the sheer joy of it. And yes, piracy will continue to be a threat, but somehow it will be factored into the overall economic environment. Anderson quotes Tim O’Reilly in another of his blog posts: “Obscurity is a far greater threat to authors and creative artists than piracy.” If nothing else, Web 2.0 at least presents a low-barrier, self-created path to potentially remove oneself from that obscurity.

The economics will work out somehow. YouTube is free, but Chad Hurley and Steve Chen understood the Anderson Switch and flipped it into mega millions. That’s not a bad start.