Friday, October 5, 2007

The value of 'free'

Interesting and thought provoking piece on the BBC website today. It talks about the value of 'free' - is the increasing prevalence of free goods undermining their cultural significance? Radiohead's latest album release is cited as an example - they are giving away their album as a digital download on their website. Not entirely free, but the consumer can name the price.

Some of the article's premise is based on this quote from Julian Baggini, a philosopher (and fellow blogspot blogger):

"When we pay for something we are showing commitment in a very practical way. We put something of ourselves - in this case money - into whatever it is we want. And by paying for it, we are proving to ourselves that we value it."

I take issue with this - paying for something only involves a commitment if the price we paid comes close to exceeding the utility we expected. When this happens, we justify the expense with, often delusional, utility increasing valuations - the $200 I spent on my new bedside lamp was worth it because of the amazing light enhancing design that helps me read without straining my eyes! When in fact the $20 lamp probably does the same thing. We add value to the valueless when it costs us a lot due to our dislike of cognitive dissonance. Psychology 101. And of course the utility I add to my valueless lamp is in direct proportion to how I value money! Basic Economics 101.

So in our modern world, where mass consumerism has driven down the prices of cultural goods (e.g. music and books) to such a degree that they are essentially very cheap (bordering on free), what we pay for them needs little justification - $14 for a CD is not something you are going to lose sleep over. If they are free, even less sleep is forgone.

My point here is that there is essentially little difference between free and really cheap for these goods You have to get to a much higher price bracket before you start to add pseudo value and show commitment to justify a purchase.

What's wrong with Baggini's analysis then, is that price is just a poor proxy for value in this case. A better one would be some combination of time and attention - because that is what cultural goods really cost us. And time and attention, in this day and age, is of increasing value.

If you accept this, then 'free' cultural goods aren't in danger of devaluing culture because we're spending scarcer resources than money on them - our limited attention spans and decreasing free time. A thousand years ago the reverse was true - wealth was scarce and attention was abundant.

The irony is that the challenge for producers is to turn that attention and time back into money. I am sure the record industry longs for those heady days of feudalism!

Digg this
Sphere: Related Content

No comments: