The book builds on the ideas that Stewart Brand articulated at the first Hackers’ Conference in 1984:

On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.

This quote often gets shortened to “Information wants to be free” – this is the bit that Gladwell quotes – and I think that the shortening is the source of a lot of the misdirected arguments against Anderson’s book. If you only say “Information wants to be free”, then the big question around free becomes how do content creators get paid? If you take this angle, then even talking about free as a concept is tantamount to advocating piracy – so a lot of the people upset with Free are, like Gladwell, professional content creators, wondering how they’ll get paid once information becomes free. Actually, even more than content creators, a lot of the kicking against free as a concept comes from content filterers (newspaper publishers and record companies, for example).

I think that the way around this problem is to think about the full quote from Brand, as Anderson actually does in the book. The tendency towards cheap/free content is inexorably driven by technological advances – it doesn’t really matter if we like it, or if we want it to happen – it’s just the way it is. The question then becomes ‘how do we structure a business model that includes some free content?’ While this can be a challenging question for incumbent businesses with business models that are difficult to change, it also provides significant opportunities for business model innovation.

And in fact, we have many, many examples of business models that include some part of the intellectual content being offered for free. Just think of the longest running, most successful open innovation project in history – science. Watson & Crick published the structure of DNA in Nature in 1953 – for free. Subsequently, the entire industry of biotechnology has been built on the foundation they provided, along with many other businesses. And even though Watson & Crick didn’t get paid by Nature for creating that short piece of content, they still ended up doing ok financially…

The key to making free work is to consider both parts of Brand’s idea about information – especially the first part. Information wants to be expensive, because it is extremely valuable when it is adapted and applied to specific contexts. If you are creating worthwhile content, the key is to figure out how to find the people that control those contexts, and build your business model around making money off of them. There are plenty of ways to do this – Anderson’s original article about Free in Wired links to a how-to wiki that lists 53 different business models that include free as part of the model, but which also include revenue-generating mechanisms. Making money off of free is a pure business model problem, and the people and firms that are innovative in constructing their business models are the ones that will profit from creating content in the information age. To do this, don’t just think about how information wants to be free, you must also consider how it wants to be expensive.

Follow up post here.

Other free resources:

Steve Outing has a great article discussing how this might work for newspapers

As usual, the definitive bit of writing on the issue comes from Kevin Kelly

Chris Anderson discusses the book in the Authors@Google program

Mike Masnick has a good take on the issues