I Believe Mark Cuban is Right

July 1, 2009 · Comments

Gift Shop SuckerThe whole “Free” debate is alive and well, thanks to Chris Anderson. Seth Godin and Malcolm Gladwell have weighed in, and right behind them, Mark Cuban put out this piece. I want to skip down to the part where my head started nodding like a bobble-head:

Newspapers are also catching flack for saying they dont want their content openly distributed. On this point, they are correct again. They should have complete control over where it is distributed. They should have the ability to choose where it is offered for free.

Not only should they have this control, taking back this control is the exact right business move. Im not saying it will save newspapers or magazines, it wont. But it will make their website offerings stronger in the long run. If Im them, I take the risk that the “printed” content business follows the path of the music industry.

Again, the whole article is here and it’s probably better that you read it before disagreeing with me (or Mark, or whoever).

Distribution Control

Mark frames the biggest point as the right of entities to control where their material is distributed. The point is this: just because something’s available via a distribution method (like RSS) doesn’t mean it’s free for the taking and re-use. Ditto the idea that just because search services (hear me, Google?) can see it and grab it all and index it doesn’t mean that it’s free for the taking and re-use.

At the heart of this is a choice. We can distribute our material and let it loose to the wild and hope to capture value elsewhere, or we can choose to lock our material into containers of perceived value. Model 2 is the way the world has worked for well over a hundred years. There’s a split in our thinking about all this, though.

Seth Godin put it this way:

People will pay for content if it is so unique they can’t get it anywhere else, so fast they benefit from getting it before anyone else, or so related to their tribe that paying for it brings them closer to other people. We’ll always be willing to pay for souvenirs of news, as well, things to go on a shelf or badges of honor to share.

Seth’s right, I believe. I think many of today’s media distribution organizations will either morph or die. (My money’s on people like USAToday/Gannett figuring it out, in the paper world. Not sure who I’d bet on for TV. You?)

Mark’s right, I believe. I think that companies have the right to rein back in their content and that people who think it should all be free no matter what are wrong.

Malcolm? I don’t know. Didn’t read the piece. I’m on vacation. He might be wrong. (I agree with Seth quite often, so maybe I’ll just trust him).

My Take on Free

You might have cottoned to the notion that I give a LOT of what I do away for free. My post on presence management is the kind of stuff that other companies sell to their clients. Why give it away? Because I can keep making new stuff all damned day. And I choose to share because I want you to be able to run with stuff and do it yourself, if you want.

My take? I give away general ideas for free and I sell customized information and execution. I work with really wonderful (and big) companies on their efforts in the business communications and emerging technology space, and that pays the bills. My writing? I give 91.5% of it away for free.

I want you to PAY for some of it soon. In August, for instance. I want you (and 4 of your friends) to buy Trust Agents. I want to sell the crap out of that book. I want it to light up the New York Times and Amazon and everywhere else. Why? Because I’m proud of the work I did with Julien, and I want it to pop!

Should I give you that for free, too? I say no. Because I’ve already given you mountains of stuff for free, and I’ll continue doing this. I don’t want your money for me. I want your money to pay John Wiley and Sons. I want your money to pay indie bookstores and Barnes & Noble and whoever. Because that’s an exchange. I share hard work, and you trade it for some loot.

So what do you think of it all? What’s free mean to you?

Special thanks to Tim Sanders for getting me started on this tonight.

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  • rjk
    Cuban may be right, but the point is meaningless... Sure newspapers (and whomever else) should have the right to control how their content is distributed (is Chris Anderson arguing otherwise?) The fact is, they do have that control. It is trivial 5 second change to get Google to stop indexing their websites. No one is forcing them to use means of distribution such as RSS feeds. Nothing is stopping newspapers from putting up a pay wall if they want to do that.
  • rjk, I agree with your point entirely.

    NYTimes.com used to offer a premium subscription service where content unique to the NYT (e.g. opinion columnists, special features, etc) was only available to subscribers. I was one one of the handful of people who actually paid for this service because I valued the the content. I do not know why they canceled the service and are now giving it away for free, but would seem that action is contrary to their current claims.

    ---
    Scott Porad
    http://scottporad.com
  • First of all, thanks for turning me on to Cuban piece. Well written and logical argument. Second, I think this is a dilemma for many. Users and readers expect it from media, so in some ways they have no choice. (It does them no good to charge for it.) However, as Cuban argues, they should control distribution. As for giving stuff away, it's becoming a new business model that works (like any business model) if there's a return on investment. Supposedly, your return will come because people will buy your book, clients will hire you for custom work and consulting, you'll get paid for speaking engagements. We (Mullen) do it for same reason. Ideally you get attention, respect for your ideas, confidence in your abilities and a following upon whom you can call. Seems to me you are doing it right and that the model works, presuming you know how to implement it wisely.
  • I think you nailed it when you said, "I give away general ideas for free and I sell customized information and execution." Edward makes a great point of saying that what the 91.5% of free drives is the willingness for people to pay for the 8.5%. It's exactly what Seth Godin was saying about what people are willing to pay for - stuff they can't get anywhere else and stuff that places them closer to their tribe. It's a model I'm going to try to bring to my organization because I believe it works. Whether I can get the buy-in is a whole different story.
  • To me, "free" is content that I give away which pulls people into the services that I provide. My podcasts prove the quality that I can provide, my blog is an example of how my mind is wrapped around content strategy. Everything can stand alone, but it also works as one body of work.

    And my photos are fun and free to use with a CC license.
  • Giving it away free has been my marketing strategy for years. It's more fun, practical and civilized than pitching.

    We go for a beer, prospective client cries into it, I share ideas. (Ever notice how much easier it is to solve other people's challenges?) I go to an event outside my industry and give away my best advice when they find out what I do and ask.

    In the situations where I make connections–come up with ideas that resonate, find some common ground, we end up working together.

    It's a lot easier to hire someone you have even the most tenuous connection with. Especially if they've given you something of perceived value for free.
  • We at http://freefoto.com started sharing our images 10 years ago. We call it 'Free' because you do pay us in hard currency, we get paid in link love. You want our content, easy give us attribution and links. Don't want to credit us? easy, pay. Our cash for the business comes from commercial (non attribution) licenses, with some ad dollars as well. We are not Getty, but we get to do what we love and make a living at the same time.
  • The problem with this line of reasoning is that there isn't a coherent problem statement, and without that there can't be a coherent solution.

    What are the papers mad about? Reproducing copyrighted content wholesale without permission is already illegal. Do they want to keep people from summarizing and commenting? Unfortunately, the law is (relatively) clear on that as well, under the well-tested Fair Use provisions.

    What it LOOKS like they want is to protect the FACTS they find and CONCLUSIONS they draw. This will never, ever fly, for obvious reasons (i.e., the US Constitution).
  • The entire problem hinges around the license that Amazon wants newspapers to sign for publication of their newspapers on the Kindle. Amazon is demanding all digital distribution rights for content.
  • I'm with Chris (and Seth). But I also think it's so early in this debate that we need some time (and a few good case studies) to figure out what's what.
  • This all goes with the whole crud that was going on years ago online and why we have WhatIsCopyright.org. I am beginning to think there might be some tinkering that might be in store to that.

    I had to remove some images that I no longer wanted on my site and Google still had some of them indexed for almost 2 years. I had a gal complaining to me because she could not find it. I said that it was a premium graphic and if she wanted to use it, she had to pay a minimal licensing fee to use it.
  • I think you are right the way you do things. Give general information (and in some cases very specific instructions/information) and then sell the more complex and in depth stuff. That's certainly the way to go today.

    You can find anything for free online. This is why I'm hesitant to write an e-book. I'm thinking of giving away good information and having people who want to learn more in-depth hire me to consult them over the phone and thru email.

    Great post.
  • Free makes sense sometimes. Sometimes it doesn't. But yes, access is a luxury and one I believe can still make sense on the web - if relevant, if awesome.

    The USP of a media company are it's opinion makers (news are everywhere, there's few margin to create differentiation). And these opinion makers can now free themselves from media companies and broadcast at will with no big corp backing them up. Which poses a problem for media companies obviously.

    You can use free to promote yourself due to your cost structure. And charge for premium services. I still believe that's the way to go. But I do believe the "premium" features have to be awesome. It must really make a difference, or else people won't buy it - or worse, talk about it.

    My take on free, here: http://www.oak-brands.com/blog/?p=260

    cheers,

    your reader,
    Pedro
  • I totally agree that not all content can be free and that the providers must be the ones to decide what is and isn't free. I think your mix (around 90%) free and the rest charged is a good one Chris.
    As to the newspapers - all they need to do is turn things upside down, surely? They currently actually give a lot away free - color supplements, TV guides, DVD's and most of their web content. One option is to give the newspapers away free and charge for the rest. Another is the more commonly suggested idea that they give a certain amount of news away free, and charge for more in depth stuff. What do others think?
  • This is a really important debate which will impact the what information we access and how we get it. This is a bigger issue than just traditional media - it has to do with all of us and our intellectual properties and unique ideas.

    I too believe in sharing a lot of (hopefully valuable) information freely with those who are interested in personal branding (my area of expertise). I actually enjoy seeing my thoughts and writing on other web sites. What's critical, however, is attribution.Sharing information you find valuable is one thing, taking credit for it is another.

    Best.
    William
    www.williamarruda.com
  • Is it shameful to want to make money? In excess, perhaps yes. In principle, however, probably not.

    Funny, when I talk to old timers who survived the Great Depression, they express no shame in their frank desire to make a buck. Making a buck back them was damned difficult; making even a basic living was an achievement you could be proud of.

    Then in the 60's, attitudes changed. The Boomers may have seen themselves as more enlightened and less materialistic. Perhaps they were. But maybe they simply took making a living for granted -- in prosperous times, it was a given.

    So let's put this "free" conversation in context: I, too, give away a lot of content for free -- in anticipation of making a greater buck down the road. That's the nature of business today.

    So Chris, when you talk about why you want your new book to sell, why not come out and say what we're all thinking anyway? Of course you want to make money. Is that so bad?
  • I am a copyright protectionist. Papers report, at expense to themselves. They research, interview, take risks, editorialize, and then are asked to stand behind what they create. That has value that should be protected. I beleive that papers have every right to claw that value back. The question is, why DON'T they? Someone above made that point and it's a good one. What problem are they solving by caving to the "expectation of the web consumer that it should be free?"

    The NY Times example is a excellent one. They have tried several really nice walled garden approaches, well-executed and consistent with their editorial and design values. But then they bagged them, thinking an ad-supported, massively distributed model would work better. It ain't!

    I think the sad reality is that the editorial value of older news brands is fading. I know my kids could care less about the differences in quality between the Times and USA Today and Drudge. They just want the story. But SOMEONE has to source legitimate news and information, properly vetted. In the end, that will always be the value. Without a source to distribute, what does Google have?
  • WOW, Chris hits a sweet spot in the Social Media/Internet debate. Where to draw the line between free and paid. This is a direct issue when trying to monetize the web.

    Does the free blog by an amateur compare to a subscription site by a "real" reporter who supposedly has resources and data-checking the amateur does not? Therein lies the heart of the question - the value of free versus the value of paid!

    I agree that if I think what I created has value worth selling, then I can give a free sample (Costco) but you need too BUY the whole meal. Whether or nt people like your taste AND find value is always going to be the question. "Plate lickers" will always prefer free, quality customers will pay for value.
  • Terry
    Newspapers are failing for one simple reason - they are no longer relevant to many people who have recognized the bias of the reporting for what it is - left wing propaganda.
  • Erecting barriers to Free content is fine...but saber-rattling at Google and Bloggers?

    Newspapers like the Cleveland Plain Dealer (Connie Schultz in particular) allegedly have it out for US Copyright Law, hoping to change it so that linking to their 'free' Online news articles or summarizing them becomes illegal.

    Hey, I'm all for getting paid. I want to get paid just as much as you do Chris.

    Your blog is like an appetizer that makes me hungrier for your premium content (Trust Agents). So why don't news companies (not ALL news companies, by the way) stop threatening bloggers with legal changes and just rope off their content?

    You can't link to something that sits behind a pay wall.

    Your strategy is spot-on Chris. Entice readers to your site by providing excellent stories, strategies and content. Make money elaborating (speeches, books, bootcamps).

    "Free" is good for marketing and brand building and connecting.

    "Paid" ...well... Paid pays the bills and allows us to share all that free stuff in the first place.

    Here's where I flesh out the copyright challenge levied by Judge Posner and (again, allegedly) supported by Connie Schultz:

    "Social Media Lands in the Brig"
    http://www.socialmediacommando.com/2009/07/02/s...
  • I haven't read Cuban's article yet. I wouldn't rule out Gladwell's argument though, Chris. I think you owe it to yourself to read it and not just go with Seth's opinion.
  • I often wonder if the newspaper is feeling like the radio when the tv came our. The radio was the main source of entertainment, news, and communication then the tv came out and it all changed. If did not completely go away but it serves a different purpose. I am not sure the question is distribution rather the speed of distribution. They have to tell a different or deeper story, not what we already know.

    I give a lot away for free, mainly because I am a nice guy and want to help people. However there is a point (that is predetermined) where my time becomes too valuable to give it away, and their benefit can afford it.

    Thanks for adding your voice to the discussion.
  • I think the whole thing is a storm in a recyclable disposable teacup. Free is neither new nor radical, I'm afraid. Mr. Anderson does a great job of fulfilling his book contract. Mr. Gladwell, on the other hand, has no clue about the nature of his business and the reason we all know what he thinks on the subject is because the New Yorker is giving his article away for free online.

    I give my two cents for free here: http://bit.ly/ujEYk
  • Michael's question, I think, is the key one: What are newspapers mad about?

    As near as I can tell, they're mad because the world has changed and they've yet to figure out how to change with it. They're mad because the recession hastened what's been a long-standing economic downturn for newspapers into a cataclysmic event. They're mad because many upper managers still don't get online communities and, as a result, react with hostility to those who participate, whether it's a blog that links to their content or a blog on their own site that criticizes the paper. They're mad because they spent years re-creating a print product online, getting even angrier at people who told them that wasn't going to be good enough in the long run.

    Mostly, they're mad because shareholders are mad because the days of 30 percent profit margins are gone and because many companies outrageously overextended late in the day of the glory days. That's as big a reason for the current collapse as the recession.

    JoeMescher also outlines several ways newspapers are shooting themselves in the foot by reacting to that anger in rather silly ways - banning links will solve all our problems! - rather than trying to make up for more than a decade of neglect to their online divisions in a rational way. I also blogged about the Posner theory this week - It's a crazy one! http://debralegg.com/2009/06/28/banning-online-... If newspapers want to hasten their demise, they should quickly jump on board on this one.

    Absolutely, anyone who creates content has the right to control its distribution. Bloggers and blog commenters who re-publish any article in whole should be whacked. The whacking stick already exists - it's called copyright law.

    But to think banning links and Fair Use quotes will solve the newspaper industry's problems is beyond naive. It's incredibly ill-informed about the way the Internet works. And that, I believe, is the crux of the new industry's problem online.
  • Further, I think it will hasten their demise.
  • Chris, I'm glad you've written a book and understand the work that goes into putting together a unique offering. It takes time, effort and uncomfortable deep thinking. I've written For Dummies books for the last 10 years. I give a lot away in blogs, emails and talks to related groups. I make my living from the books and they enable me to help others on a free basis. I'd like my books to stay protected. The electric company isn't powering my house for free.
  • Couldn't agree more on the FREE message. Our CEO, Mike Damphousse, gives away tons of free information on b2b demand gen on his blog and has never once thought of restricting it. In fact, he has a saying that "the success of my writing is in how many of my competitors enjoy it". btw...your presence article rocked!
  • You can never protect all your information and there is no reason for you to do that anyway. The companies or sports industries that don't realize the value of free information don't understand the value of marketing or branding.

    I have a sports background(covered 7 Super Bowls for Fox Sports Network) and saw 2 different sports industries go in complete opposite directions. Boxing wanted to make money so they charged for fights. After years of doing this No One wanted to pay but even worse they got no promotion because they wanted to protect their information(the fights) and that Killed it.

    On the opposite end of the spectrum is the NFL. They are the #1 sports league by a large margin and they totally GET IT. They don't charge for anything! You want to watch the games just tune in. Even their biggest and most important game- the Super Bowl-anyone can watch it for FREE and they do every year making it the MOST WATCHED SHOW-8 of the Top 10 most watched TV shows all-time are Super Bowls.

    It's their CONTENT that is so valuable and brings so many eyeballs that companies will PAY handsomely for that because of the VALUE.

    So create great VALUE for FREE and if it's worth paying for it SOMEONE WILL.
  • News organizations need to create better products worth charging for. Simple news isn't the answer, no mater what people like Steve Brill say. In my opinion those are the people killing journalism. While organizations may have "the right" to reign their content back in, simply taking someone that was once free and putting a price tag on it is absurd. For one, it can all but destroy that trust relationship you've built with an audience. Second, we're simply living in an ecosystem where we have been conditioned to expect that news online is free. That's value that's been established for it. If news organizations had innovated in the 90s when they were flush with cash, then we'd be having a different conversation. But they never looked forward, and that's their fault, not ours. Now we have crackpots saying that the answer to news' troubles is to ban linking?? These are the witch doctors of the digital age.

    That being said, there is innovation happening in places like the NYT & their R&D labs. Things like NYT TV, and a slew of other multimedia projects that have a foundation of amazing contextual content. I would pay for NYT in my living room. I'll pay for for for a membership where I get access to special events with people like Tom Friedman. I'll pay for an experience. What I'm not going to pay for a barrier to content that I've been getting free for years.
  • I for one will buy the book, and can't wait to read it, and won't mind paying for it.

    It seems to me we're seeing an extension of something that's always happened in the past, but now is more visible because we can broadcast stuff.

    Fifty years ago my mother ran a business making drapes and covers. She did good work but customers never paid her for the real value add - her ability to help them understand design and how it would work for them.

    Thirty years ago people bought accounting software from me, not because it was the best software, but because I helped them to understand how to make it work in their business.

    Twenty years ago I learned management consultants give away two days analysis to sell ten days of scope definition to sell a hundred days of implementation.

    The "reach" of the Internet now enables us to transform what was a "one to one" engagement into a "one to many" broadcast.

    It's the same thought leadership driving business for us, except now we're in a "many to many" environment.

    The really good news is audience, clients and customers get to compare value add from a range of potential providers/partners - bad news for the big brands and great news for those genuinely interested and capable of adding value.

    What's generic is free, what's specific is chargeable.

    This is only a problem for those entrenched in making money under the old rules.

    As always, I agree with you!
  • I'm taking a stab in the dark, but my guess is that not enough people bought premium subscriptions to make the system worthwhile. Also, chances are the NYT saw a drop in digital readers once they offered premium content which would impact what they can charge for online ads.
  • I believe there is a name for what Cuban is talking about - Television. Free for the user but distribution is controlled and monetized.

    BTW his is a HD TV investor.
  • So Chris, how do you see "free" impacting professional nonprofit associations where members pay annual dues? Traditionally, those associations provide education, networking, research and lobbying in exchange for dues. However in many cases, the rise of the Internet is taking research, networking and content out of the equation. In addition to the dues, many associations charge a fee for a face-to-face event with content and networking at its core.

    What do you think paying dues members should expect free from their associations? Do you see free online content and information competing with nonprofit associations that provide content as a core service?
  • Ad supported is not free. And what you give out for "free" builds the Chris Brogan brand which is what companies pay you for when seeking help from you on social media, paid help.
  • David
    I agree with you (and Mark) that authors should be able to keep control over how and where their work is distributed (for a reasonable period of time). I'm not sure I agree with Mark that the right choice is to limit distribution.

    Cory Doctorow (science fiction author, co-editor of Boing Boing) seems to find that free distribution as well as free content works for him. And I'm not just talking about the blog articles, he gives away (under creative commons licenses) the full text to his novels.

    Yet people seem to continue buying them. It may be because reading a novel printed in a book is easier than reading it on the screen or on letter sized pages from a computer printer. Or it may be for tribe identification. In any case, Cory believes that making the books freely available boosts sales rather than diminishing them.

    I'm not saying this would work for everybody, just that it can work. It seems to work for Cory.
  • I never understood why newspapers did give out their stuff for free. What they should've done is to give out previews then invite people to sign up for a fee, then make sure that 3rd parties who did pay to re-use them couldn't distribute the entire portion via RSS. There should've also been a connection between off-line readers and on-line readers, such as what Fast Company did. I believe that if I pay for the printed product off-line, then I should be able to view it on-line.
  • Chris - I totally agree with your comments on free. I've been posting free marketing advice on my own blog and even recently had a chat with someone who needed help. She said why are you willing to help me for free? Honestly, I didn't tell her anything that wasn't already on my blog just gave a little more depth. I do it for free because I remember the early days when I was looking for help and there weren't the great resources that are available now. I figure one day...I might need something so why not help others now. And one day...I too will want them to pay for something, be it my time, a book, or something else I conjure up in my dreams. As far as the future of newspapers...well there's certainly a lot of pressure when all of us are providing our advice online for free isn't there! I think people are looking for more human connection and right now the newspapers aren't providing it. ;-) Great post!
  • Great pov Chris. Not only did I get a little smarter about the free vs. cost philosophy but I got a better feel for value offerings for businesses to scale (linking to this in today's blog post).
    Catching up on Mark Cuban's ideas now.
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