An excellent review of Free by Chris Anderson/Wikipedia by Malcolm Gladwell in the New Yorker. I have always thought of the New Yorker as someone who can separate the tech from the dirt quite handily.
I particularly enjoyed this passage about my favorite catastrophe–YouTube:
“For Anderson, YouTube illustrates the principle that Free removes the necessity of aesthetic judgment. (As he puts it, YouTube proves that “crap is in the eye of the beholder.”)
But, in order to make money, YouTube has been obliged to pay for programs that aren’t crap.
To recap: YouTube is a great example of Free, except that Free technology ends up not being Free because of the way consumers respond to Free, fatally compromising YouTube’s ability to make money around Free, and forcing it to retreat from the “abundance thinking” that lies at the heart of Free. Credit Suisse estimates that YouTube will lose close to half a billion dollars this year. If it were a bank, it would be eligible for TARP funds.”
I have to commend the reviewer for summarizing the obvious so succinctly, but I wish it required much greater brainpower to ascertain. YouTube’s eventual failure was so obvious and so predictable that it is simply bizarre that so many apparently intelligent people COMPLETELY MISSED IT.
And yes, I know that the Credit Suisse number may have been off by a couple hundred million, but it is pretty undisputed that Hulu is outstripping YouTube in revenue and that YouTube is the bandwidth hog of all time. And it is not profitable by any measurement. This explains the premium services that are under discussion–which were also entirely predictable. It’s simple–you cannot replace aesthetic judgement with a machine or a crowd.
As Eric Schmidt told Maureen Dowd: “We learned in working with newspapers that this balance between the newspaper writers and their editors is more subtle than we thought. It’s not reproducible by computers very easily.”