Unleashing the Ideavirus

Unleashing the Ideavirus
144
 www.ideavirus.com
required consumers to go through a time-consuming download before they could use
them… and if they couldn’t use it, they couldn’t understand why they wanted it! Catch-22:
a product you don’t know if you want to download until you download it.
Give them a version instead that doesn’t require a download and doesn’t work as well—but
still makes their life better. Why? Because now that I’ve sampled it without risking a virus or
taking a lot of time or trying to understand the arcane intricacies of downloading in
Windows, 
now
I’m willing to invest the time to do it.

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Unleashing the Ideavirus
145
 www.ideavirus.com
Digital Media Wants to Be Free
When was the last time you bought some table salt?
Odds are, you didn’t pay very much. Salt is cheap. Why? Because once you own a salt mine
and pay for a salt factory, the cost of making a pound of salt is low indeed. But because
there’s more than one salt mine out there, the competition for getting salt sales is pretty
intense. And given that all salt is pretty much the same, why pay more?
Pricing battles are certainly not unusual in physical goods. In fact, almost every competitive
category of item that’s entirely physical (without an idea attached) uses cost-based pricing. In
other words, it’s a commodity. When those rules are abandoned (as they were with crude oil
during the Arab oil embargo) consumers are shocked and angry.
For a number of reasons, this pricing approach hasn’t really kicked in with intellectual
property. It only costs McKinsey a few hundred bucks to write a report for Chrysler, but
they happily charge a few million dollars for it. One more copy of a Bob Dylan CD only
costs 80 cents to make (less than a vinyl record!) but it sells for twenty times that.
Why?
The biggest reason is that intellectual property is rarely a commodity. There are many kinds
of salt, but there’s only one Bob Dylan. And when you want to listen to Dylan, it’s not clear
that 10,000 Maniacs is an acceptable substitute.
Because intellectual property is unique, it has long resisted a trend toward commodity
pricing at the margin. In fact, the price of most forms of intellectual property has 
increased
.
Barring one big exception:
Stuff that went from being expensive to being free.
The most popular web server software (the programs they use to run most giant websites) is
not sold by Microsoft. And it doesn’t cost $10,000. It’s free.

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