NowPublic @ Vidfest2008: Chris Anderson, Keynote

10:50am - Q&A for Chris Anderson

10:49am - Videogames: labour exchange model, ie. Verbosity http://tinyurl.com/yrl7rn

10:49am - Videogames: gift economy models: user-gen, freeware, flashgames, community (game FAQs), donations

10:48am - Videogames: 3rd party models: advergames, ARGs, in-game advertising, bundled games

10:42am - Are video games the future of free? Some recent freemium models: limited demos (xbox live), tiered access (Club Penguin), digital assets, and/ or downloadable content.

10:32am - A taxonomy of “free”: old and new. Old: cross-subsidy (razors and blades), ad-supported (media). New: freemium (upselling, give away 99% to sell 1%). Labor Exchange: consumers create something of value in exchange for free goods or services, ie. GOOG-411); Gift Economy — ie. Wikipedia, people willing to create/make things for free.

10:28am - This is what happened in the case of the free webmail movement. Anderson discusses the following scenario: http://www.wired.com/...ine/16-03/ff_free_webmail

10:27am - Anderson, this is key: “In a competitive market price falls to the marginal cost.” Yet we never consider what this means when marginal costs approach zero. Corollary: everything that can become digital will become digital; and everything that is digital will become free.

10:25am - Anderson: “For the first time in history, complexity is free” (ie. 3D printing, for which there are no machining costs).

10:20am - By contrast, today it costs 1/4 of 1 cent to stream video to a person for 1 hour. Hence, the invention of YouTube: you can do what you want — waste their storage, bandwidth, etc. What you get is Lonelygirl15 — ostensibly webcam video by a lonely teenager (which turned out not to be the case) and - at her height - she reached an audience on the scale of Everybody Loves Raymond. YouTube success, of this kind, is the future of television.

10:19am - Anderson: mass media requires that we focus and share on common interests, but these are fairly banal (ie. Everybody Loves Raymond…but does everyone or anyone love Raymond?)

10:17am - Broadcast era was first mind-blowing new economy. Medium invented where marginal cost of reaching nth people was almost zero. Reaching more people or fewer people is almost zero. Consequence: can only do that with a limited number of shows (at beginning of broadcast era). Need to invent content that suited everybody — mass media.

10:16am - Market price of data storage, online, is quickly moving toward being free. Look at Google and Yahoo’s nearly unlimited free email storage.

10:10am - Discussing ‘waste transistors’ and move toward home computing. Ways to make computers cheaper, smaller, and stylish. We are now able to explore so many ways and uses of technology. Our job is to put tech in hands of people who live in real world. They will figure it out. Then we can begin to figure out what the technology is for.

10:05am - 3rd form of free: What happens when things get free?

10:03am - 2 forms of free: razors and blades vs. media (advertising-driven model)

10:01am - Gillette tried to sell disposable razors but no one bought them, so started to give them away for free. Created pattern of use, based on consumers trying the product, that in turn created a vast customer base.

09:59am - Anderson: Discusses King Gillette - the patron saint of free - who invented disposable razor. Wanted to build successful business and was pushed to make something that people would throw away.

09:55am - Anderson: to discuss ‘the history of the future of free’. Quick explainer of the long tail.

09:53am - Garden introducing Chris Anderson, Editor-in-Chief of Wired, author of The Long Tail, and The Future of Free.

09:48am - Alex Garden: first words. Discussing “Microtransactions” - selling little tiny things to millions of people. This doesn’t work yet in North America.

09:46am - Introductions to festival, Alex Garden, and Chris Anderson.

The first session at VidFest today was Wired editor Chris Anderson, talking about the power and inevitability of free. The following are my somewhat incomplete notes:

Free allows you to be profligate in your resources. It enables a massive global experiment.

Economics has very little to say about abundance and free. What are the economics of free?

Starts by talking about King Gillette, the guy who invented disposal razors. See his Wired article for all the details.

You give away something to establish a pattern of use and a lifetime of revenue. See also cell phones.

Wired costs $10 a year, less than 10% of what it costs them to produce the magazine. Writing a cheque indicates ‘an expression of true interest’.

The Wired model is ‘third party pays’. In this case, the third party is the advertiser.

How would the world change if electricity was free? You could desalinate water for no cost.

Three inputs that are becoming free in today’s world: processing power, storage and bandwidth.

Thus far, this is pretty much a live presentation of his Wired article.

Technologists need to make technology cheap, easy and ubiquitous. The world will tell us what it’s for.

A terabtye costs about $300 - $350. Anderson’s 9-year-old has twice the storage of Wired magazine. “The market price of storage is zero.”

The marginal cost of reaching an audience member is zero. The old economic model drove us to invent mass media on TV. Hence, “Everybody Loves Raymond”. Nobody loves Raymond. Everybody only likes Raymond.

“The things we share are relatively banal.” We disagree about the things we love–we love the things that mark us as individuals.

Today it costs 0.25 of a cent to stream a video to one person for one hour.

YouTube violates every of traditional television.

3-D printing is a physical example of ‘complexity is free’ moving into the physical world.

“In a competitive market, price falls to the marginal cost.” “Anything that can become digital, will become digital. And everything that is digital, will become free.”