12.11 Nothing beats FREE

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    “There is no such thing as a free lunch” These words date back to the 19th century, when bartenders in the United States were serving free lunch to attract a crowd. The cost was incorporated in the sale price of the liquors, so “free” was not really free, or was it?

    The word free may mean without cost, but it definitely does not mean without value. There is a clear sense of value, but you need to think of it in terms of intangible benefits such as social capital. You receive something, and you give something else in return. If you offer a free download of your book, sales of the physical book will rise. This much has been proven in recent years. By giving a lot in one place, you can earn in another place. Sometimes, this is in the shape of money. It is tricky that the relationship between giving something and receiving something in return is not always a direct or equal one. This is called asynchronous reciprocity. Do as you would be done by; you just do not know exactly how and when.

    You read in the previous chapter that we offer free coworking at out Seats2meet.com locations, and of the tremendous reciprocity we experienced as a result. The German scholar Sebastian Olma has studied the concept of Seats2meet.com. In his book, The Serendipity Machine, he describes our asynchronous reciprocity as follows:

    “What Seats2meet.com experiences is the manifestation of an archaic principle, albeit in very modern form: the potlatch. A potlatch is a ceremonial feast that has been found to be an integral part of many archaic economies. The word comes from a native North American dialect term meaning “to give away” or a “gift.” Anthropologists have long been fascinated with the potlatch, because it is the cornerstone of an economic system in which acts of exchange do not take place in a space abstracted from personal relations. In our modern economies, a transaction is sealed by paying a price, thus alienating the previous owner from the good or service. Paying the price, one might say, cuts off the previous owner’s bond with the object of exchange and also prevents the emergence of any social bond between the two parties. The potlatch, in contradistinction, is a form of exchange designed to establish a social bond between the parties engaging in the exchange. The gift is never alienated from the giver. Rather, he or she enters into a relationship of asynchronous reciprocity with the receiver of the gift. The exchange establishes a strong social bond between the parties involved in the gift exchange, obligating the receiver to repay his or her gift debt. However, the reciprocity is asynchronous, meaning that when and how repayment takes place is left to the will and capabilities of the receiver.”

    On the Internet, you will find quite a number of free applications, products, and services. Or at least, they seem to be free of charge. In his book, Free, Chris Anderson explains that this is the case, because certain Internet-related costs (bandwidth, data storage, and software) are approaching a zero point, and, as a consequence, more and more can be offered for nothing.

    One of the companies that are very good at giving is Google. Google’s Eric Schmidt calls it the Google Max Strategy: “Take whatever it is you are doing and do it at the max in terms of distribution. The other way of saying this is that since marginal cost of distribution is free, you might as well drop things everywhere.”

    Using an Internet music service, like Spotify, you can listen to music free of charge, but in between the songs you will hear or see advertisements. If you want to use all the goodies offered by the platform, a monthly fee will be imposed. Although the traditional music industry has fought these services for years, they are slowly starting to see the impact and potential success of the new business models. In 2013, in The Netherlands, for the first time in twelve years, the music publishers saw an increase in turnover caused by their share in these Internet music platforms, and I hope, for them, it is not too little and not too late. Some artists are complaining again that their share is too little, as the establishment greedily grabs a too-large share, and their added value is almost nothing, so the battle between traditionalists and Society 3.0 citizens is not yet over.

    S2M photo by Punkmedia.

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