Now the axis of value has flipped again. Rivers of free copies have undermined the established order. In this new supersaturated digital universe of infinite free digital duplication, copies are so ubiquitous, so cheap—free, in fact—that the only things truly valuable are those that cannot be copied. The technology is telling us that copies don’t count anymore. To put it simply: When copies are superabundant, they become worthless. Instead, stuff that can’t be copied becomes scarce and valuable.
When copies are free, you need to sell things that cannot be copied. Well, what can’t be copied?
Trust, for instance. Trust cannot be reproduced in bulk. You can’t purchase trust wholesale. You can’t download trust and store it in a database or warehouse it. You can’t simply duplicate someone’s else’s trust. Trust must be earned, over time. It cannot be faked. Or counterfeited (at least for long). Since we prefer to deal with someone we can trust, we will often pay a premium for that privilege. We call that branding. Brand companies can command higher prices for similar products and services from companies without brands because they are trusted for what they promise. So trust is an intangible that has increasing value in a copy-saturated world.
There are a number of other qualities similar to trust that are difficult to copy and thus become valuable in this cloud economy. The best way to see them is to start with a simple question: Why would anyone ever pay for something they could get for free? And when they pay for something they could get for free, what are they purchasing?
In a real sense, these uncopyable values are things that are “better than free.” Free is good, but these are better since you’ll pay for them. I call these qualities “generatives.” A generative value is a quality or attribute that must be generated at the time of the transaction. A generative thing cannot be copied, cloned, stored, and warehoused. A generative cannot be faked or replicated. It is generated uniquely, for that particular exchange, in real time. Generative qualities add value to free copies and therefore are something that can be sold.
Here are eight generatives that are “better than free.”
IMMEDIACY
Sooner or later you can find a free copy of whatever you want, but getting a copy delivered to your inbox the moment it is released—or even better, produced—by its creators is a generative asset. Many people go to movie theaters to see films on the opening night, where they will pay a hefty price to see a film that later will be available for free, or almost free, via rental or download. In a very real sense, they are not paying for the movie (which is otherwise “free”); they are paying for the immediacy. Hardcover books command a premium for their immediacy, disguised as a harder cover. First-in-line often commands an extra price for the same good. As a sellable quality, immediacy has many levels, including access to beta versions. Beta versions of apps or software were once devalued because they are incomplete, but we’ve come to understand that beta versions also possess immediacy, which is valuable. Immediacy is a relative term (minutes to months), but it can be found in every product and service.
PERSONALIZATION
A generic version of a concert recording may be free, but if you want a copy that has been tweaked to sound acoustically perfect in your particular living room—as if it were being performed in your room—you may be willing to pay a lot. You are then not paying for the copy of the concert; you are paying for the generative personalization. The free copy of a book can be custom edited by the publishers to reflect your own previous reading background. A free movie you buy may be cut to reflect the rating you desire for family viewing (no sex, kid safe). In both of these examples, you get the copy free and pay for personalization. Aspirin is basically free today, but an aspirin-based drug tailored to your DNA could be very valuable, and expensive. Personalization requires an ongoing conversation between the creator and consumer, artist and fan, producer and user. It is deeply generative because it is iterative and time-consuming. Marketers call that “stickiness” because it means both sides of the relationship are stuck (invested) in this generative asset and will be reluctant to switch and start over. You can’t cut and paste this kind of depth.
INTERPRETATION
As the old joke goes: “Software, free. User manual, $10,000.” But it’s no joke. A couple of high-profile companies, like Red Hat, Apache, and others make their living selling instruction and paid support for free software. The copy of code, being mere bits, is free. The lines of free code become valuable to you only through support and guidance. A lot of medical and genetic information will go this route in the coming decades. Right now getting a full copy of all your DNA is very expensive ($10,000), but soon it won’t be. The price is dropping so fast, it will be $100 soon, and then the next year insurance companies will offer to sequence you for free. When a copy of your sequence costs nothing, the interpretation of what it means, what you can do about it, and how to use it—the manual for your genes, so to speak—will be expensive. This generative can be applied to many other complex services, such as travel and health care.
AUTHENTICITY
You might be able to grab a popular software application for free on the dark net, but even if you don’t need a manual, you might want to be sure it comes without bugs, malware, or spam. In that case you’ll be happy to pay for an authentic copy. You get the same “free” software, but with an intangible peace of mind. You are not paying for the copy; you are paying for the authenticity. There are nearly an infinite number of variations of Grateful Dead jams around; buying an authentic version from the band itself will ensure you get the one you wanted. Or that it was indeed actually performed by the Dead. Artists have dealt with this problem for a long time. Graphic reproductions such as photographs and lithographs often come with the artist’s stamp of authenticity—a signature—to raise the price of the copy. Digital watermarks and other signature technology will not work as copy protection schemes (copies are superconducting liquids, remember?), but they can serve up the generative quality of authenticity for those who care.
ACCESSIBILITY
Ownership often sucks. You have to keep your things tidy, up-to-date, and, in the case of digital material, backed up. And in this mobile world, you have to carry it along with you. Many people, myself included, will be happy to have others tend our “possessions” while we lazily subscribe to them on the cloud. I may own a book or have previously paid for music I treasure, but I’ll pay Acme Digital Warehouse to serve me what I want when and how I want it. Most of this material will be available free elsewhere, but it is just not as convenient. With a paid service I have access to free material anywhere, channeled to any of my many devices, with a super user interface. In part, this is what you get with iTunes on the cloud. You pay for conveniently accessible music you could download for free somewhere else. You are not paying for the material; you are paying for the convenience of easy accessibility, without the obligations of maintaining it.
EMBODIMENT
At its core the digital copy is without a body. I am happy to read a digital PDF of a book, but sometimes it is luxurious to have the same words printed on bright white cottony paper bound in leather. Feels so good. Gamers enjoy fighting with their friends online but often crave playing with them in the same room. People pay thousands of dollars per ticket to attend an event in person that is also streamed live on the net. There is no end of ways to counter the intangible world with greater embodiment. There will always be insanely great new display technology that consumers won’t have in their home, so they need to move their bodies somewhere else, like to a theater or auditorium. A theater is more likely to be the first to offer laser projection, holographic display, the holodeck itself. And nothing gets embodied as much as music in a live performance, with real bodies. In this accounting, the music is free, the bodily performance expensive. Indeed, many bands today earn their living through concerts, not music sales. This formula is quickly becoming a common one for not only musicians, but even authors. The book is free; the bodily talk is expensive. Live concert tours, live TED talks, live radio shows, pop-up food tours all speak to the power and value of a paid ephemeral embodiment of something you could download for free.