Wednesday, December 30, 2009

2010: The beginning of the end of free

With the exception of broadband/dial-up access charges, the history of the Internet has been defined by free. Content is free. Access is free. Applications and features are free. Once you're online, everything is free for the taking. It's a culture of free, to the point that even when content producers want to charge you for something -- movies, music, games, books -- there's an accepted practice of getting it for free anyway.

And I think 2010 is the year that all starts to change. 2010 is the beginning of the end of free.

Why do I say that?

First, because 2009 was the year that the previously presumed notion of online = free became a real discussion point. Back in 2007 and 2008 it was just quasi-contrarians like Jason Fried from 37signals who got press for "daring" to charge for online apps. But in 2009 the groundswell of "maybe it shouldn't be free" got loud enough that the free-lovers countered with a seminal text, Chris Anderson's Free: The Future of Radical Price. The fact that free was even a major topic of debate in 2009 -- let alone that guys like Chris Brogan came out against the idea of giving everything away -- was the first tremor of change. If you have to defend your position, that's an acknowledgement that the position is under assault.

Second, 2010 will be (I predict) the year the PC really stops being our primary Internet device, and our phones take over. Apple has a lot to do with this, thanks to the iPhone, though Blackberry did plenty to make us like and want mobile Internet. Google is here with its Android OS, playing the same game too. And if/when the Apple tablet gets here -- probably running the iPhone OS -- it will annex the ebook reader landscape into the phone universe. (Ray Kurzweil's Blio book platform will pick up the dedicated e-reader stragglers, because it shows better ebooks. And it's worth mentioning that almost everyone, Amazon included, would rather sell you a tablet PC than a dedicated e-reader, if only for the higher market penetration.) So what's that got to do with free?

Whereas we've been trained that our PC-based Internet is a world of free, we've always paid for everything on our phones. A phone-based Internet universe is a world of micropayments. We pay for ringtones. We pay to download text messages. We pay extra for data connectivity. We pay for apps. Phone-based features are a Chinese menu of mini-payments. And the tweens and teens raised in a text-messaging, pay-as-you-go world won't think anything of a not-free Internet when they are driving the culture and finance bus 10 to 15 years from now. Moreover, not only will we pay for online stuff on our phone, we'll use our phone to pay for stuff offline. Virtual payments using a secure mobile device are just beginning to take hold in the US, but this trend will escalate and cement the notion of our phone as a nexus of commerce.

And the third nail in free's online coffin? Content providers have to find a way to make money online, and they're dead set on charging us something for the work. Rupert Murdoch wants to delist his sites from Google and put up a paywall --  and he's crazy enough to do it. Other conventional print content creators are trying to create a "Hulu for magazines" to encourage online payment. The RIAA and MPAA aren't going anywhere, and Apple and AMazon are happily playing along selling you 99-cent content snippets. Now, I expect all of these moves to fail, but they will send ripples through the content marketplace that erode the concept of free. While I won't pay $50 for a year's subscription to Time, I might pay $5 for a Time/Warner app on my tablet/phone -- one that gives me access to all their print content across all their properties. But the problem for content providers isn't that charging is wrong, but that they are overcharging for the value consumers place on their products. 2010 is the year we start to zero in on a realistic, sustainable price -- and it ain't free.

I'm not arguing that free is going away tomorrow, or that it will ever go away entirely. I am arguing that 2010 is the year that free stops being the assumed standard price for everything online.