The latest book “Free” from Chris “Long Tail” Anderson was published last month. In this book, Anderson argues that offering products and services for free would benefit many companies. John Malone (owner UPC) made an argument for the opposite only last week: offer paid content to your customers. At the same time, Ruport Murdoch launched paid services for the Wall Street Yournal and the New York Post. In short, should content be free or paid?

In his (too) elaborate elucidation, Anderson tries to explain that products and services can be offered for free in the digital age, due to the decline of marginal costs for storage, processing and bandwidth. The focusses on these three technologies as the basis for the success of the bit-age we live in today.

This immediately leads to the main critique on the book. Anderson implies that low distribution costs justify free products and services. For example, he argues that artists who spread their music for free via the Internet, can make money with performances and merchandise. I don’t thinks his is anything new. Surely the role of the music label is taken over by the artists themselves (offer music via own website) and internet (music distribution). The music label is no longer the link between the artist and the consumer.

The above calls for a review of the business models of all parties who earn their money with creation and distribution of products and services. Anderson comes up with a strategy: ‘Abundant information should be free of charge. Scarce information wants to be expensive’. He calls this the information paradox.

The interesting thing is that John Malone (during an interview by Rick Nieman) argues that it is nonsense to offer information for fee . He also poses an interesting statement: ‘without an economic model, you commit financial suicide’. According to Malone it is impossible to create a viable business model based on the free distribution of information. He goes on to say that it is only reasonable to ask money for quality online content. Ruport Murdoch immediately listened to this message and founded paid services for the New Your Post, among others. Malone and Murdoch actually confirm Andersons information paradox, even  though they differ wildly in opinion.

The digital age led to a serious decline in the cost of spreading information via the Internet.  Distribution cost can even be neglected. However, this does not justify free access to all content. Whether content should be free of paid depends on two things: authenticity and willingness of the customer to pay for it. It is just very hard to make that match. This is the ditch that many online initiatives for paid content fall into. Paid content is often not different enough from free content, which is why customers often don’t see the added value (or authenticity) of paid services. To put it differently: companies will have to get better at creating unique content.

One final note: do NOT read Chris Andersons book. It takes the first 100 pages for him to explain in awkward examples how you can increase your turnover by distributing free samples. No really?