Better Than Free

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 s

In the industrial age, exact copies became more valuable than a handmade original. No one wants the inventor’s clunky “original” prototype refrigerator. Most people want a perfect working clone. The more common the clone, the more desirable it is, since it comes with a network of service and repair outlets. Now the axis of value has flipped again.

Well, what can’t be copied?

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 somet

Behind these conversations is a fundamental change of the digital age that applies to essentially every creative field: in the past, consumers bought and collected physical editions of creative work, creating a direct value exchange between fans, artists, and producers. Today almost all creative work is digitized and essentially rented — lowering

As Larry Summers and J. Bradford DeLong would write in August 2001, just a month after the file-sharing service Napster was taken down, ‘the most basic condition for economic efficiency … [is] that price equal marginal cost.’ They went on: ‘with information goods, the social and marginal cost of distribution is close to zero.’ This held true not on