With the publication of Chris Anderson’s new book Free, the discussion about the role of free, today and in the future has expanded.  Articles from Malcom Gladwell in New Yorker, and Seth Godin discuss the various merits and challenges of Free.  Is Free inevitable ? Is Free the beginning of the end ? Let me answer the question.

First of all, what we are experiencing right now is “Better Than Free”. The videos on Youtube, magazine articles, newspapers reports, anything that used to be analog that now is digital have a perceived value that is based on their legacy delivery.  We value all those TV shows on Hulu highly because we assign a value to what we pay for cable or satellite. We assign a high perceived value to newspaper and magazine reports based on the years we spent paying for them.  Anything that we paid for as recently as last year, that we now get free, of course we assign a  value of more than free.  That makes it worth the effort to find it for free. Because the effort is worth your time. You are getting something for nothing, who doesnt want that ?

Of course that is a challenge for those industries. Not only do they face the challenge of their former customers wanting  their content for nothing, but they have the problem that their costs are based upon their ability to sell their content.

There in lies the problem for the free movement. The subsidies of pro content producers from the newspaper and magazine industries will disappear as those businesses contract significantly. What happens then ?

You get the music industry.  Anyone can create any song for no cost, and they do.  The problem of course is getting your music to stand out among the millions of songs available at any given moment. Its expensive. Very, very expensive.  (If it werent for groupies, would the number of musical artists contract 90pct ?  )

The future of content outside of the music industry is exactly what you are now seeing inside the music industry.  The music industry  uses what they have learned from more than 10 years of competing with free.  First they cut the size of their organizations to the bone, keeping just those they hope and pray will know best how to guide them through the world of free.

Those survivors have learned or are learning how to identify the music and artists that best fit the new world of free.  They learn how to work with the artists and those willing to pay for music in some form, whether CD, Download, Licensing or in concert, and do their best to maximize the return on their investment.  They use free as a weapon. They use free as an asset. They use it anywhere they can leverage it into something more. Something hopefully profitable.

What they music industry realizes that they  have to offer quite a bit of music for free. What they have learned however, is that they dont have to allow it to be freely distributed. They can and do control where its delivered. You can have it for free, if thats how you want it, but you have to come get it where we want you to get it. On our websites. On websites we co produce with Youtube or Hulu or whoever. If you want it for free, you have to go through the exhausting effort of clicking to our website and giving us something in value in return. It may be your attention. It may be your interest. It may be a referral or your email address. We give you something free, you give us something that costs you nothing.

The music is often free, but it is NEVER freely distributed.

The TV and Movie business are realizing this is the case. Hence TV Anywhere. They will give you access to content for free if you are already a customer of their distributors. And before you IT ALL HAS TO BE FREE BIGOTS EXPLODE, even google requires you have internet access of some kind, which costs you in subscription fees , taxes or coffee.

Newspapers are catching flack for saying there should be copyrights on their news reports and the summaries. They are right. Their work, their ability to control it. They should have the right to control where it appears. If, as Chris Anderson and others suggest, there will be plenty of content creators and the quality of the work is sufficient for consumers of that content, then there will be plenty of open source content and it shouldnt matter what the newspapers request for protection. The market will decide.

Newspapers are also catching flack for saying they dont want their content openly distributed. On this point, they are correct again. They should have complete control over where it is distributed. They should have the ability to choose where it is offered for free.

Not only should they have this control, taking back this control is the exact right business move. Im not saying it will save newspapers or magazines, it wont. But it will make their website offerings stronger in the long run. If Im them, I take the risk that the “printed” content business follows the path of the music industry.

In other words, you take on the role of identifying the best in breed for your business and use your resources to help those talented people figure out how to make money for themselves and for you.  You provide your resources and knowledge to make them smarter and then you go and compete against the masses.

In the long run, printed content producers should have a brand, and use their institutional knowledge, their core competencies and ability to procure, improve and market to maximize the value of their brands and the perceived value of their content. Whether its on a central website, a co produced website, in print or on a hologram in the evening sky, I should go to the NY Times because they have demonstrated to me that they have the very best articles on the subjects I am looking for. That they are the best source for breaking news about the topics I care about. THEY NEED TO MAKE SURE I DONT HAVE THE CHOICE OF GETTING IT ANYWHERE ELSE BUT WHERE THEY DICTATE.  If they cant make their content stand out from the open source masses and convince enough people to transact with them in  a way that makes them money they dont deserve to exist.

They should  distribute their content for Free where they believe it maximizes return, but should do everything possible to keep it from being distributed Freely.

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1. Has anyone noticed that its impossible to trust a single word uttered about coaching changes, the draft, trades and even celebration parties these days ?

Bloggers, sports websites and even the print media have gotten so desperate they seem to have come to the conclusion that fabricated stories, passed off as rumors, are a better way to drive traffic and create awareness of a website or blog than actual reporting.

Unfortunately, ESPN and local newspapers, radio and TV media have become the patsies of bloggers.  If some random blogger reports that “he has heard that a trade of Joe for John is being discussed”, then the traditional media, as they have told me many times “is requested by their editor to run it down and see if its real”.    Its almost like a sad joke.  How do you make an ESPN reporter jump ? Make up something and put it on your blog. Somewhere a bunch of sports bloggers are playing a drinking game.  Chug if the other guys made up trade rumor makes the ESPN crawl.

How to stop it ? ESPN.com puts up a page of blacklisted blogs and websites who’s posts they wont comment on or report on in any way.  It will create a short term surge of traffic for those sites, but then they will go away as the proprietors of the sites realize that being discredited is not a good thing.

2. I did a quick and dirty interview with The Motley Fool. They asked me about Buy and Hold for Stocks. My answer was simple.

“Buy and hold is long dead. It has always been a sucker’s bet.  Proponents point to charts of index performance over the long term; unfortunately, things like house repairs, kids, and college tuition don’t follow the same chart.

Buy and hold is a great marketing slogan for funds that want to take your money. Nothing more or less.”

Then they had John Bogle ,founder of Vanguard and creator of the Vanguard 500 comment on what I had to say.  I’m glad to say that Mr Bogle made my point.  In what should have been a simple answer for him, was not.  Plus he managed to take a  few shots at me.   Hey, if you can’t counter a point, slam the messenger ! Here is what he had to say.  Notice all the qualifiers.

“Cuban embargo … is what we need after those silly statements.

Of course buy and hold is a sucker’s bet where individual stocks are concerned (just ask the guys that bought and held Mark’s own company!)
And while buy and hold for all of American business (a stock index fund) may produce long years of plenty interrupted by years of famine, putting equity capital to work in that way will be great so long as America is great.
And as a group, all investors, by definition, are buy and hold investors! Not complicated! And mathematically, those who themselves are buy and holders (without costs) will — not might — outperform those who trade back and forth with one another, who capture the same market return but let all those croupier costs destroy their returns.

Finally, if buy and hold refers not to stocks or the stock portfolio but to one’s aggregate investment portfolio, reducing the stock commitment as age takes its toll, it is the most certain way to wealth that exists in our uncertain world.

He’s right about the marketing slogan — except when it is applied to the strategy described in the immediately preceding paragraph.”

I stand by what I had to say.  Buyer beware.

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This is the year of WTF. Yep, What the F&&&.

It doesn’t matter what got you to the point of saying it. Maybe you got fired/layed off. Maybe your company went out of business. Maybe you quit because you couldn’t take it any longer. Maybe you are just graduating from school and the prospects of living at home are far worse than cramming in with 12 roommates in a beater house or apartment you call “The Hotel”.  Whatever the reason, the question is how do you turn this time into the start of something good ?

I’m here to give you your WTF To Do List.

1. Recognize that its ok to live like a student.

It doesn’t matter where you live. It doesn’t matter how you live. It doesn’t matter what kind of car you drive. It doesn’t matter what kind of clothes you wear. It doesn’t matter.  Your biggest enemies are your bills.  The more you owe, the more you stress. The more you stress over bills, the more difficult it is to focus on your goals.  More importantly, if you set your monthly income requirements too high, you eliminate a significant number of opportunities. The cheaper you can live, the greater your options. Remember that.

2.  Take Lots of Chances

If you are living cheap, and ready to find out where your future lies, now is the time to try anything.  WTF time means fighting through your fears to take a job in a new industry. It means trying different things to find out what it is you love to do.  There will be no such thing as too many jobs.  In this type of economy getting a job is tough if not often impossible. So you are going to have bust ass to create opportunities for yourself.

Creating opportunities means looking where others are not.  Look outside where all your friends are looking.  Make a list of jobs and businesses that are outside the norm. I know you want to follow your passions and get a job in sports, movies, tv, shooting video for Girls Gone Wild,  and other things your friends would love. Why fight the crowds ?   Go where people are not. Just like you never thought you would ever fall in love with someone else, you will find another industry or job that you will love as much as your first love.  Move down your list to other things. Then get ready to work

In this kind of economy, it really is a numbers game. You are going to have to keep on applying for everything and anything that opens a door you want to walk through.  You can never slow down. Its hard work finding a job.  If you have bills you have to pay, and it means taking a night job in order to keep looking for the day job or to keep a job you want, do it.   Be a waiter, a night janitor, wash clothes, sell vacuum cleaners door to door,  whatever you need to do, all the while reminding yourself that it opens the door for your future.

Then when you do find a job, remind yourself again that  you are winging it.   Everyone always sees the bright side of the job they just took.  You have to.  The new job you just took that you thought would be amazing, will be amazing. Most probably it will be amazing for about 3 months. Then you will realize its not so  amazing and you will  need to find something else that is amazing. Thats ok. You don’t have to be right everytime. You just have to be right one time. Finding the right job is a lot like dating.  Its hard until you start, then when you start, its great till its not. Then its frustrating as hell until you get it right. But when you do, it all comes together.

3.  Figuring out if you are in the right job

Its really easy to know if you are in the right job.  If it matters how much you get paid, you are not in a job you really really love.  I’m not saying that you shouldn’t want to make more money. I’m not saying that you shouldn’t bust your ass to make as much money as possible.  Thats not the issue. The issue is whether or not you truly love your job. If you love what you do so much that you are willing to continue to live like a student in order to be able to stay in the job, you have found your calling.

4. Figure out how to be the best

Once you have found out what you love to do, there is only one goal. How can you be the best in the world at it. It doesn’t matter if you are a filing clerk, an athlete, an accountant or a bartender.  All that matters is that you do whatever you can to be the best.  Of course “the best” is all relative.  The one person who you should never believe when it comes to evaluating your abilities is you. The very worst judge of your abilities is you. Self Evaluation is never successful.  When you are the best at something, the demand for your services will grow.  People want to hire the best. They want to be associated with the best. In 2009, in this economy so many people switch jobs and industries and its so much easier to stay connected via social networks and other digital means, people who need you can and will find you. So rather than trying to convince people you are the best, let the quality of your work do your talking.

5. Start the day motivated with a positive attitude.

You are going to screw up. We all do. I cant tell you how many times I did and do. It happens too often. No matter what happens, every morning, the minute after you wipe away the crust from your eyes, remind yourself that you are going to enjoy every minute of the day.  You are going to enjoy the 20 interviews you have. You are going to enjoy waiting in the heat for your roommate to  pick you up afterwards. You are going to enjoy realizing how frayed your collar is becoming and how sick you are of your one tie.  You are going to enjoy all the bullshit you have to deal with as you chase your goals and dreams because you want to remember them all. Each and every experience will serve as motivation and provide great memories when you finally make it all happen.

Its your choice. What are you going to do ?

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You have a video that you want to post on the web. It may be just for you. It could be for friends. It could be for family. It could be for a company or a political campaign. It could a video that you want seen by as many people as possible.  Regardless of your audience expectations, do you have any expectation of paying for that video to be hosted ?  Of course you don’t. Neither does anyone else.

The reality is that all of us have the expectation of being able to post any and every video on sites like Youtube for free, with no limitation on audience size or location.   We have reached the point where Youtube in particular, Google specifically is subsidizing the majority of user generated content on the web.  20gbs PER MINUTE upload and who knows how much for viewing

Which leads to the question, what happens if they stopped subsidizing the cost of bandwidth for user uploaded video ?

What would happen to internet video ? What would happen to social media ? What would happen to the future of entertainment ? What would happen to the future of politics ?  How would it change how we use the internet ? The list of questions is a mile long. Would it be the best thing to ever happen to traditional media ?  Hence the conundrum.

The next question of course is “why would Google stop subsidizing the uploading , hosting and presentation of 80pct of the user generated online videos (excluding commercial sites) viewed in the US  ?”

The answer of course is : Because they had to. 

There are two certainties for the technology business in the US.  The first is that every leader falls out of the lead at some point. The 2nd is that every leader falling out of the lead gets torched by Wall Street and places a premium on stock price over free services and their users. 

Google has already established itself as a hall of famer. But nothing lasts forever in techland. Particularly subsidies.  What happens to the internet and how we use it  when those subsidies end  is a country song that will eventually be written.

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