My Letter to the Economist

Chris Anderson
The Long Tail

March 24, 2009

To the Editor,

As a former Economist technology writer, I understand the attractions of “simplify, then exaggerate”. But in the case of your article on freeconomics (“The end of free lunch—again [ http://www.economist.com/opinion/displaystory.cfm?story_id=13326158 ]”, March 19th), you have done a bit too much of both.

First, where is your evidence that online advertising is a failing model? To be sure, the crisis has dramatically slowed its growth (like that of every other industry) but unlike most others, it’s still positive. The worst forecasts for the year that I’ve seen predict that it may drop by a few percent from last year’s record figure. That’s a lot better than the offline advertising market and hardly supports your hyperbolic claim that “the demise of a popular but unsustainable business model now seems inevitable.”

Second, there is more to free business models online than advertising. The big shift since the crisis has been the rise of “freemium” (free+premium) models, where products and services are offered in free basic and paid premium versions. Think Flickr and Flicker Pro (more storage), virtually all online games and even your own site (some free and some paid content).

Finally, your scorn blinds you to the fact that this crazy idea of giving away content for free and supporting it by advertising is nearly a hundred years old. It is the basis of the standard radio and television broadcast model (“free to air” content) and countless other companies, from the free daily and weekly newspapers to the vast majority of media websites, including all of our own at Conde Nast. It works great—The Economist should try it!

Regards,

Chris Anderson

Editor in Chief, Wired Magazine and author of the forthcoming “Free: The Future of a Radical Price”