Why Free Matters

The publishing industry hasn’t, yet, had to face the Armageddon that the movie and music industry has been battling over the past decade simply because bits on a screen are not, yet, a substitute for the dead-tree version of books.

However, with the advent of the Kindle et. al. there seems to be a slow, inexorable move towards digital consumption of the printed word.

And then comes this:

Peter Sunde, one of the founders of the Pirate Bay, wrote a mysterious blog post today asking for someone in the U.S. to send him an Amazon Kindle, and hinted that he might be working on a new project involving e-books.

“Do [sic] anyone wanna help me out? I’m looking to make an interesting service together with some friends in the New Media Market…,” he writes.

He says he isn’t able to purchase one in Europe, and that it’s too expensive to use mailing dropboxes in the United States. On top of all that, he links to a Digital Renaissance blog post discussing the future of the book industry and the Kindle’s potential.

“Book publishers — it’s time to act. You have an amazing digital future ahead of you. Monetize it before some smart guy in a garage does it,” writes Martin J. Thörnkvist.

We sent Sunde an e-mail for clarification to find out if there really is a secret new project focusing on e-books.

His reply was equally as cryptic:

“Sponsor me with a Kindle and I’ll answer? :-)”

While we work through the bureaucracy of funding this little investigation, one message is clear:

Publishers need to get a grip on the biz before the pirates do.

How do you compete against this? We’ve been firm believers that open and free are two possible models. Chris Anderson’s latest missive, shown below, offers us a window of opportunity.

1. Here’s the first, which dates back more than a century. It’s the razors-and-blades model, as well as loss leaders of all sorts, from “free gift inside” to “free toaster for opening an account”: 2. The second is the media business model, ranging from free-to-air broadcast radio and television to all ad-supported content online today: 3. The third is the new one, enabled by digital markets where the marginal cost of production and distribution is close to zero. This is the one that allows the “freemium” business model, where 90% of the users get the basic product for free and 10% chose to pay for a premium version. In economics this is called “versioning”…


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