The new business model: Give it away free

Here is an interestingreview of a new book by Wired editor Chris Anderson entitled Free: The Future of a Radical Price:

It’s called “freemium.”

That term, first popularized by venture capitalist Fred Wilson, describes a business model that combines free with premium and is based on the underlying assumption that the most effective price is free. Anderson says that companies can use the powerful marketing tool of “free” to garner the largest possible audience, and then convert a portion to additional premium services for which companies would charge a fee, or “premium.” From there, one figures out his optimal free-to-paid ratio. “You give away 75% to 90% of your goods and sell the rest,” Anderson said.

Applying the freemium model to mobile phones, you would get the cell phone but pay for the minutes. For the music industry, you would give away your music for free, people would sample it, some would pay for the mp3, and some would attend the concert — the premium part of the equation. . . .

Anderson’s rationale for why the model will work
Anderson explains the reason this model will work is because people are psychologically drawn to free, and offering content or services over the Internet has no “real” costs associated with it.

According to Anderson, the Internet is the first deflationary industrial economy we’ve ever created. He says that digital is the first to progressively fall 50% every year — and has been for 50 years. Once the Internet took the constrained processing from Moore’s law, a rule stating that the number of transistors on a chip doubles every 24 months, and added storage and bandwidth — both of which fall faster — Anderson says we created a medium that basically says everything can be available in a free form.

As a result, Anderson says media companies have infinite competition, and the marginal cost of production and distribution is zero. “Whatever the cost is today, it’s going to be 50% as much as a year from now, and fall 50% every year forever because of Moore’s law.”

Sooner or later, everyone will compete with free, Anderson says. “Free is not a choice,” he said. “If you don’t do it for free, someone else will. The question is, is yours worth paying for?

What do you think about this business model? Setting aside the techno-utopianism, what might be some applications? (A publisher offering free downloads of titles, but then charging a premium for printing them out? Giving away Volt cars, but charging $40,000 for the batteries?) Give suggestions both real and whimsical.

Back to the moon

Today is the 40th anniversary of a human being walking on the moon. Charles Krauthammer says we simply must go back to the moon. In the course of his argument, he recounts that “Michael Crichton once wrote that if you told a physicist in 1899 that within a hundred years humankind would, among other wonders (nukes, commercial airlines), “travel to the moon, and then lose interest . . . the physicist would almost certainly pronounce you mad.”

It so happens that we have another moon vessel up there now. Its mission is interesting in itself, though it shows how inhospitable the moon is to human life:

The 13-ft.-long, 2-ton spacecraft is not designed for a landing, but rather will settle into a low lunar orbit just 30 miles (48 km) above the surface, or about half the altitude at which the Apollos flew. The ship will be fairly stuffed with scientific instruments, one of the most important — if least sexy sounding — of which will be its laser altimeter. The altimeter will bounce laser beams off the lunar surface and, by measuring the speed at which they reflect back up, calculate the moon’s topography to within inches. That’s critical since long-term lunar stays require finding not only hospitable places to land, but also hospitable places to establish a home.

“We’re going to measure the topography with the level of detail civil engineers need when they’re building a building,” says Jim Garvin, one of the lead developers of the LRO and the chief scientist at NASA’s Goddard Space Flight Center, which will run the mission.

Just as important for choosing where to homestead is knowing the local weather — or at least the local temperature. Nobody pretends that the moon will be a thermally comfortable place to live, but few people realize just how punishing its climate extremes are — a torch-like 250 degrees Fahrenheit (120 Celsius) during the day and a paralyzing -382 Fahrenheit (-230 Celsius) at night. What’s more, says Garvin, “the moon goes through this dance every 28 days.” Those kinds of cycling extremes can be murder on hardware, and until we know more about the hot-cold rhythm, we can’t build properly to withstand it.

Easily the most exciting piece of hardware aboard the ship, however — for lay lunarphiles at least — will be the camera. Even the best reconnaissance photography before the Apollo visits missed things, which is why Apollo 11′s landing almost came to grief when Neil Armstrong and Buzz Aldrin found themselves piloting their lander over an unexpected boulder field just seconds before touchdown. That’s less likely to happen this time, thanks to a camera that can visualize objects as small as a few feet across. What’s more, since the LRO will be in a polar orbit instead of an equatorial one — or, vertical rather than horizontal — the moon’s 28-day rotation will eventually carry virtually every spot on the surface beneath the camera’s lens.

“The moon will essentially walk around underneath the orbiter,” says Garvin. “With the detail we get in the photographs, every picture will be like a mini-landing.” That includes photos of the Apollo sites, all half-dozen of which should have their portraits snapped. If NASA gets lucky, Garvin believes the first such images could be in hand by the 40th anniversary of Apollo 11, on July 20.

For all of the LRO’s versatility, one thing it can’t do with much precision is look for water. That’s a problem, since astronauts living on the surface will need plenty of the stuff, and bringing it all with them is out of the question. (A single pint of water weighs about a pound, and every pound you fly to the moon costs about $50,000.) The LRO, however, will not be traveling alone. Launched on the same booster will be another entire spacecraft known as the Lunar Crater Observation and Sensing Satellite (LCROSS).

Shortly after the paired ships enter space, the LCROSS will separate from the LRO and embark on its own trajectory toward the moon. The LCROSS will lag behind, spending four months in a sweeping orbit that will carry it around both Earth and the moon; throughout its flight, it will remain attached to its upper stage rocket, separating from it only during its final approach to the moon. The rocket stage will then speed ahead, aiming for a deliberate crash in one of several craters in the south lunar pole in which the LRO’s sensors will have detected signs of water ice. The collision will send a debris plume as high as 6.2 miles (10 km) into space and the LCROSS itself, trailing four minutes behind, will fly through it. As it does, its instruments will analyze the chemistry of the plume, looking particularly for water ice, hydrocarbons and other organics that will break down as they are exposed to their first flashes of sunlight in billions of years. Shortly after that, the LCROSS, too, will complete its suicide plunge, smashing into the ground just miles from the first impact site.

It will take about a year before the surviving LRO completes its more leisurely mission, and then another decade at least before humans are once again treading lunar soil.

Since those words were written, the vehicle has arrived at the moon and is sending back pictures, such as these of the original landing sites.

What do you think? Should we go back to the moon, launch off to Mars, and send manned expeditions into outer space?

Geoengineering the climate

Another solution being proposed to counter the alleged global warming–in addition to reducing the carbon in the atmosphere–is “geoengineering.” Here is what Samuel Thernstrom of the conservative think tank the American Enterprise Institute is proposing:

The most promising ideas take their proof of concept from nature. Scientists noted that the 1991 eruption of Mount Pinatubo in the Philippines cooled the planet for two to three years by roughly half a degree Celsius. There are ways of artificially reproducing this effect. For instance, ultra-fine sulfur particles injected into the upper atmosphere could deflect 1 or 2 percent of incoming sunlight — almost unnoticeable but enough to cancel out the warming expected to occur this century. This would not halt the slow acidification of the oceans caused by elevated levels of carbon dioxide, but it could cool the planet and drastically reduce the heat-related damages we would otherwise experience, buying time for emissions reductions to take effect.

There are other potentially effective geoengineering techniques that deserve serious study. For instance, low-altitude marine stratocumuli clouds, which cover about 25 percent of the world’s oceans, also reflect sunlight. Research suggests that it might be possible to increase the reflective abilities of these clouds by spraying a fine mist of seawater into the air. A fleet of roughly 1,500 ships (estimated cost: $2 million per ship) might be able to increase the reflectivity of these clouds by 10 percent, enough to counteract anticipated warming.

Into this category we could put the idea of painting the world’s roofs white so as to reflect more of the sun’s energy back into space.

My impression is that some conservatives are embracing such schemes–since they would supposedly be cheap and painless, as opposed to “cap and pay” schemes and eliminating carbon fuels–while they are being opposed by environmentalists for their trust in technology and for being, well, painless. But aren’t both approaches equally outlandish in their own ways?

Automotive criticism

I have often said that ANY subject can be made interesting by good writing. As an example, I have often used writing about cars. I’m not all that interested in them, but I enjoy reading good writing about them. Consider, for example, Car Talk with Click and Clack, the Tappet brothers. Just as there are literary critics, movie critics, and food critics, there are car critics. The most entertaining of the breed has to be Jeremy Clarkson, one of the hosts of one of my favorite television shows, BBC’s Top Gear. Here is his take on Honda’s new hybrid, the Insight:

Much has been written about the Insight, Honda’s new low-priced hybrid. We’ve been told how much carbon dioxide it produces, how its dashboard encourages frugal driving by glowing green when you’re easy on the throttle and how it is the dawn of all things. The beginning of days.

So far, though, you have not been told what it’s like as a car; as a tool for moving you, your friends and your things from place to place.

So here goes. It’s terrible. Biblically terrible. Possibly the worst new car money can buy. It’s the first car I’ve ever considered crashing into a tree, on purpose, so I didn’t have to drive it any more.

The biggest problem, and it’s taken me a while to work this out, because all the other problems are so vast and so cancerous, is the gearbox. For reasons known only to itself, Honda has fitted the Insight with something called constantly variable transmission (CVT).

It doesn’t work. Put your foot down in a normal car and the revs climb in tandem with the speed. In a CVT car, the revs spool up quickly and then the speed rises to match them. It feels like the clutch is slipping. It feels horrid.

And the sound is worse. The Honda’s petrol engine is a much-shaved, built-for-economy, low-friction 1.3 that, at full chat, makes a noise worse than someone else’s crying baby on an airliner. It’s worse than the sound of your parachute failing to open. Really, to get an idea of how awful it is, you’d have to sit a dog on a ham slicer.

So you’re sitting there with the engine screaming its head off, and your ears bleeding, and you’re doing only 23mph because that’s about the top speed, and you’re thinking things can’t get any worse, and then they do because you run over a small piece of grit.

Because the Honda has two motors, one that runs on petrol and one that runs on batteries, it is more expensive to make than a car that has one. But since the whole point of this car is that it could be sold for less than Toyota’s Smugmobile, the engineers have plainly peeled the suspension components to the bone. The result is a ride that beggars belief.

There’s more. Normally, Hondas feel as though they have been screwed together by eye surgeons. This one, however, feels as if it’s been made from steel so thin, you could read through it. And the seats, finished in pleblon, are designed specifically, it seems, to ruin your skeleton. This is hairy-shirted eco-ism at its very worst.

However, as a result of all this, prices start at £15,490 — that’s £3,000 or so less than the cost of the Prius. But at least with the Toyota there is no indication that you’re driving a car with two motors. In the Insight you are constantly reminded, not only by the idiotic dashboard, which shows leaves growing on a tree when you ease off the throttle (pass the sick bucket), but by the noise and the ride and the seats. And also by the hybrid system Honda has fitted.

In a Prius the electric motor can, though almost never does, power the car on its own. In the Honda the electric motor is designed to “assist” the petrol engine, providing more get-up-and-go when the need arises. The net result is this: in a Prius the transformation from electricity to petrol is subtle. In the Honda there are all sorts of jerks and clunks.

Jeremy is not just trying to be funny. He is not just making fun of the car. He is dealing with actual technical problems in the vehicle. And if you read the rest of the review, you will find that he is not against alternative energy at all and that he has positive suggestions for how the automotive industry could proceed. He makes the point that for a new automotive technology to succeed, it will need to be at least as good and preferably better than what people currently have; otherwise, they won’t buy it. He gives credit to Prius, but puts his hope in hydrogen technology.

Stop smiling

Arkansas, Indiana, Nevada and Virginia will no longer allow you to smile for your driver’s license picture. It seems that smiling throws off facial recognition technology used to detect fraudulent licenses. Residents in these states will have to display “neutral facial expressions.”

So smiling heightens individuality? Being happy would foil surveillance technology that some Big Brother might use to keep track of us? There may be something telling here, though I’m not sure what it is.

Military funding for telepathy reports that the Pentagon is investing in the possibilities of telepathy on the battlefield:

Forget the battlefield radios, the combat PDAs or even infantry hand signals. When the soldiers of the future want to communicate, they’ll read each other’s minds.

At least, that’s the hope of researchers at the Pentagon’s mad-science division Darpa. The agency’s budget for the next fiscal year includes $4 million to start up a program called Silent Talk. The goal is to “allow user-to-user communication on the battlefield without the use of vocalized speech through analysis of neural signals.” That’s on top of the $4 million the Army handed out last year to the University of California to investigate the potential for computer-mediated telepathy.

Before being vocalized, speech exists as word-specific neural signals in the mind. Darpa wants to develop technology that would detect these signals of  “pre-speech,” analyze them, and then transmit the statement to an intended interlocutor. Darpa plans to use EEG to read the brain waves. It’s a technique they’re also testing in a project to devise mind-reading binoculars that alert soldiers to threats faster the conscious mind can process them.

The project has three major goals, according to Darpa. First, try to map a person’s EEG patterns to his or her individual words. Then, see if those patterns are generalizable — if everyone has similar patterns. Last, “construct a fieldable pre-prototype that would decode the signal and transmit over a limited range.”

The military has been funding a handful of  mind-tapping technology recently, and already have monkeys capable of telepathic limb control. Telepathy may also have advantages beyond covert battlefield chatter. Last year, the National Research Council and the Defense Intelligence Agency released a report suggesting that neuroscience might also be useful to “make the enemy obey our commands.” The first step, though, may be getting a grunt to obey his officer’s remotely-transmitted thoughts.

The approach seems to be physiological rather than New Age mystical, as such, but still. . . .Does this bother you? What about working on neuroscience that would “make the enemy obey our commands”? Couldn’t the state use that technology to make its citizens obey its commands?