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Summary:

How does the tension between free and paid manifest itself in the technology world? Panelists at MIT’s Sloan School of Management conference on the Digital Economy explored the idea Friday in San Francisco.

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Building products or services for free is a sticky subject in a variety of realms, from tech to academia to media, and it’s not likely to get any less controversial as the web keeps growing. At the MIT Sloan School of Management‘s conference on the Digital Economy in San Francisco Friday, a variety of experts talked about the rise of the digital economy and its implications for creativity and ownership on the web, in particular what happens when coders and artists put their work out for free to the public.

Tim O’Reilly, founder and CEO of O’Reilly Media, talked about the tensions between individuals wanting to monetize their work and the broader value they can create by making their content available to everyone.

“I think there’s an area of our economy that’s really not studied enough, or it’s not thought about enough. What happens when people give things to each other without getting paid? Think about the revolution with YouTube,” he said, pointing to children choosing between a Disney cartoon or a video created by another child that was uploaded to the site. “From the point of view of a director who wants to get paid, that’s a negative thing, but from the point of view of the consumer, that’s a positive thing.”

O’Reilly pointed out that some people might think that free material, once widely circulated, would make it hard for others to eventually make money, but that might not be the case:

“Businesses do arise. The world wide web and open source software turned into Google and Facebook and Apple building all this incredible technology that they were able to monetize. So I’m interested in this economic activity that comes from this open source and open sharing. What does it tell us about the possibility of new jobs?”

These issues are very much at play when looking at companies like Twitter, which started with a free product embraced by a geeky, early-adopter audience and is trying to become a mainstream media business. O’Reilly cited the idea that once an item becomes free something else becomes necessarily more valuable. But Jeremy Howard, president and chief scientist at Kaggle, said he thinks for most creative types, there doesn’t have to be high demand for a product to keep them going:

“I’ve been coding every day for 30 years,” he said. “The idea that unless you create scarcity around intellectual property or creators will stop creating, is just crazy.”

  1. So this is the debate on copyright and patents but behind a veil
    The world is far behind on the copyright conversation, with patents , because of 3D printing , changes must be forced soon.

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    1. I disagree. There are a lot of organizations out there who provide free products. Some of these will never become profitable, some will stay as non-profits, and some will be like Facebook or Twitter.

      I’ve used flickr for Free and then chose to pay. I’ve used Last.fm for free and then chose to pay. A lot of people fear that in providing a free service or product you are losing something, but some have proven that there’s also a lot to gain. That’s a risk for makers to decide and users to reward.

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  2. Reblogged this on NikiVallwaysMyway and commented:
    well, when you consider how arbitrarily valued money and services are determined, doing stuff for free is just kinda going to be the natural way, unless we want to continue on a path inherently unequal because of its arbitrary value system. “The best things in life are free,” and that is true.

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  3. Vinod Shintre Friday, January 18, 2013

    If tech is becoming a food we live on a daily basis then its likely one would start paying or at least 1 segment will be willing to pay

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