What happens when we build things for free? Only time will tell

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.”