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In the late s, radio was emerging as a popular entertainment format, but also one that made a mess of the old ways of paying musicians. Broadcasters argued that it was impossible to pay licensing fees based on how many listeners tuned in, because no one knew what that number was. Worse, it threatened to raise that rate when the contract expired in As the broadcasters and ASCAP were negotiating, radio stations started taking matters into their own hands, and cut the live performances out entirely.

Recording technology was improving, and more and more stations began playing records, which were introduced by a studio announcer known as a disk jockey. Faced with a shrinking pool of music to play and a potentially ruinous royalty requirement, the broadcasters struck back by organizing their own royalty agency, Broadcast Music Incorporated BMI. The business model of charging radio stations a fortune for the right to play music collapsed.

Instead, radio was recognized as a prime marketing channel for artists, who would make their money from selling records and concerts. Although ASCAP challenged this in several lawsuits in the s and s, it never regained the power to charge high royalties to radio stations.

Today these royalties are calculated based on a formula involving time, reach, and type of station, but are low enough for radio stations to prosper.

The irony was complete. Rather than undermining the music business, as ASCAP had feared, free helped the music industry grow huge and profitable.

Now free offers the opportunity to switch back again, as free music serves as marketing for the growing concert business. The one constant, predictably, is that the labels are still against it. For most previous generations, scarcity—of food, of clothing, or of shelter—was a constant concern. For those born in the developed world in the past half century or so, however, abundance has been the keynote. When I was a kid, hunger was one of the main problems of poverty in America.

Something dramatic has changed in the world of agriculture in the past four decades— we got much better at growing food. A technology-driven revolution turned a scarce commodity into an abundant one. And in that story lie clues to what can happen when any major resource shifts from scarcity to abundance. There are only five major inputs to a crop: sun, air, water, land nutrients , and labor. Sun and air are free, and if the crop is grown in an area with plenty of rainfall, water can be free, too.

The remaining inputs—primarily labor, land, and fertilizer—are very much not free, and they account for most of the price of crops. In the nineteenth century, the Industrial Revolution mechanized agriculture, radically lowering the cost of labor and increasing crop yield. The secret of this second revolution was chemistry.

For most of human history manure has determined how much food we had. Agricultural yield was limited by the availability of fertilizer, and that largely came from animal and sometimes human waste.

If a farm wanted to support both animals and crops in a synergistic nutrient cycle, it had to split its land between them. But at the end of the nineteenth century, naturalists began to understand what it was in manure that plants need: nitrogen, phosphorous, and potassium. At the beginning of the twentieth century, a few chemists started work on making those elements synthetically. The breakthrough came when Fritz Haber, working for BASF, figured out how to extract nitrogen from the air in the form of ammonia by combining air with natural gas under high pressure and heat.

Today, production of ammonia currently constitutes about 5 percent of global natural gas consumption, accounting for around 2 percent of world energy production. Along with chemical pesticides and herbicides, this created the Green Revolution, which increased agricultural capacity worldwide nearly a hundredfold, allowing the planet to feed a growing population, especially a new middle class that, desiring to eat higher on the food chain, increasingly chose resource-intensive meat rather than just grains.

The effects of this have been dramatic. The cost of feeding ourselves has dropped from one-third of the average U. This extraordinary grass, bred by man over millennia to have larger and larger starch- filled kernels, produces more food per acre than any other plant on the Earth. Corn economies are naturally abundant economies, at least as far as food goes. Historians often look at the great civilizations of the ancient world through the lens of three grains: rice, wheat, and corn.

Rice is protein-rich but extremely hard to grow. Only corn is both easy to grow and plump with protein. The effect of this was not always positive.

Rice and wheat societies tended to be agrarian, inwardly focused cultures, presumably because the process of raising the crops took so much of their energy.

Today, we use corn for more than just food. Between synthetic fertilizer and breeding techniques that make corn the most efficient converter of sunlight and water to starch the world has ever seen, we are now swimming in a golden harvest of plenty—far more than we can eat.

So corn has become an industrial feedstock for products of all sorts, from paint to packaging. Cheap corn has driven out many other foods from our diet and converted natural grass-eating animals, such as cows, into corn-processing machines.

Much less obviously, the leavenings and the lecithin, the mono-, di-and triglycerides, the attractive golden color and even the citric acid that keeps the nugget fresh can all be derived from corn. And that goes for the nonfood items, too! Even the supermarket itself, with its wallboard and joint compound, linoleum and adhesives, is built on corn.

Corn is so plentiful that we now use it to make fuel for our cars, in the form of ethanol, which has finally tested its abundance limits. After decades of price declines, corn has in recent years started getting more expensive along with oil prices.

But innovation abhors a rising commodity, so that rising price has simply accelerated the search for a way to make ethanol out of switchgrass or other forms of cellulose, which can be grown where corn cannot.

Once that magic cellulose-eating enzyme is found, corn will get cheap again, and with it, food of all sorts. Food is at least replenishable, but minerals are not. After all, the Earth is a limited resource, and the more ore we take out of it the less there remains, which is a classic case of scarcity. In , a think tank called the Club of Rome published a book called Limits to Growth, which predicted that the effect of a rapidly growing world population running up against finite resources would be catastrophic.

But not everyone agreed with this Malthusian despair. This has the effect of increasing supply faster than demand, which in turn depresses prices. The debate surrounding the veracity of this statement turned into one of the most famous bets in history, one that would essentially define the opposing views of scarcity versus abundance thinking.

In September , Paul Ehrlich, a population biologist, and Julian Simon, an economist, made a wager, publicly recorded in the pages of Social Science Quarterly, over the future price of some core commodities. If the inflation- adjusted prices of various metals rose over that period, Simon would pay Ehrlich the combined difference; if the prices fell, Ehrlich would pay Simon. Ehrlich chose five metals: copper, chrome, nickel, tin, and tungsten.

Partly because he was a good economist and understood the substitution effect: If a resource becomes too scarce and expensive, it provides an incentive to look for an abundant replacement, which shifts demand away from the scarce resource witness the current race to find replacements for oil. Simon believed—rightly so—that human ingenuity and the learning curve of science and technology would tend to create new resources faster than we used them. He also won because Ehrlich was simply too pessimistic.

Abundance, from an evolutionary perspective, resolves itself, while scarcity needs to be fought over. But our tendency to give scarcity more attention than abundance has caused us to ignore the many examples of abundance that have arisen in our own lifetime, like corn, for starters. The problem is that once something becomes abundant, we tend to ignore it, just like we ignore the air that we breathe. You can see this in examples small and large.

Today basic necessities such as clothing can be made so cheaply as to be essentially disposable. As a result, the average American consumer had just eight outfits. There is no need for anyone to dress in rags today; indeed some homeless have easier access to free clothing than they do to showers and washing machines, so they simply treat clothing as a disposable item, to be worn for a short while and then discarded.

But perhaps the most familiar example of abundance in the twentieth century was plastic, which made atoms almost as costless and malleable as bits. What plastic, the ultimately fungible commodity, could do was to reduce manufacturing and material costs to practically nothing.

It was simply molded in any shape, texture, or color desired. The result was the birth of disposable culture. The concept King Gillette introduced with the razor blade was extended to nearly everything else by Leo Baekeland, who created the first all-synthetic polymer in His name gave us Bakelite.

After the war, all this capacity, redirected to the consumer market, turned a remarkably malleable material into an exceedingly cheap one. But the second generation of plastics, the vinyls and polystyrenes, were so cheap that they could be tossed out without a thought.

In the s, brightly colored disposable goods represented modernity, the triumph of industrial technology over material scarcity. Throwing away manufactured goods was not wasteful; it was the privilege of an advanced civilization.

After the s, attitudes toward this superabundance began to change. The environmental cost of a disposable consumer culture became more obvious. A generation started recycling. The automobile was enabled by the ability to tap vast stores of petroleum, which replaced scarce whale oil and made liquid fuels ubiquitous. Computers made information abundant.

Just as water will always flow downhill, economies flow toward abundance. Products that can become commoditized and cheap tend to do so, and companies seeking profits move upstream in search of new scarcities.

Only thirty-two of the Top companies today make things you can hold, from aerospace and motor vehicles to chemicals and food, metal bending and heavy industry. The other sixty-eight traffic mostly in ideas, not resource processing. Some offer services rather than goods, such as health care and telecommunications. Others create goods that are mostly intellectual property, such as drugs and semiconductors, where the cost to produce the physical product is tiny compared to the cost of inventing it.

A few decades ago, the most value was in manufacturing. Then globalization rendered manufacturing a commodity, and the price fell. So the value moved to things that were not yet commodities, further away from hand-eye coordination and closer to brain-mouth coordination.

These days that scarcity is what former U. The constant challenge is to figure out how best to divide labor between people and computers, and that line is always moving. The first group typically gets paid more than they used to and the second group gets paid less. The first is the opportunity that comes with industries moving toward abundance; the second is the cost. As a society, our job is to try to make the first group bigger than the second. Abundance thinking is not only discovering what will become cheaper, but also looking for what will become more valuable as a result of that shift, and moving to that.

IN , the Village Voice finally gave in. Forty years after its founding, the legendary publication stopped charging a cover price. Like almost all other weekly city newspapers, it would become free, distributed in boxes on the street and in stacks at friendly retailers. Started in as a free satirical broadsheet in the college town of Madison, Wisconsin, The Onion has grown into an empire. Over the past two decades, it has expanded its regional print editions in ten other cities and launched a Web site that now gets millions of visitors each month.

It publishes books, produces a TV show, and dabbles in feature-length movies. The Onion was born free, stayed free, and continues to thrive. On the face of it, the story of these two publications is puzzling. In one case, free devalued the product, while in another it drove an impressive expansion.

As the New York article explained: Told that many writers felt that the impact of their work had been diminished when the paper went free, [publisher] David Schneiderman scoffed, adding that there was no choice. Now the circulation is ,…. It saved the paper. Kept it going, making money. In other words, the Voice had been in decline, at least in terms of its business fundamentals, for many years before it went free; people confused cause and effect.

A free bagel is probably stale, but free ketchup in a restaurant is fine. With The Onion and the Village Voice, we get at one crucial misconception about free, but only in the context of two prices—zero and non-zero.

Let me give you an example that is closer to home: a glossy monthly magazine. It can typically be obtained in several different ways. You can read it online for free, in a somewhat stripped-down form that trades the design and photography packaging of the print edition which is hard to re-create on the Web for instant accessibility.

The Web price free is the easiest. The cost of delivering the content is so low that publishers round down to zero and use free to reach the largest possible audience.

That means they get between 1 and 4 cents of revenue for each page someone looks at. The cost of serving that page is only a fraction of a cent. The rest of the costs are in creating the content in the first place, but publishers amortize that over the entire audience: The bigger the readership, the lower the cost per page.

The newsstand keeps less than half, to pay their costs and make a profit. The rest goes to the publisher and provides a dollar or two of profit after the costs of printing and distribution. That can cut the profit considerably. So why bother with the newsstand? Plus, publishers can make a decent profit from the advertising in the copies that do sell. So far those prices are set by economics, not psychology. Advertising makes a loss- leading subscription model profitable.

And if the subscriber stays for three years or more, even the acquisition costs are repaid, making them more profitable yet.

If the publisher is able to subsidize its subscribers by more than 60 percent, surely it could go all the way to percent and make the subscription free? The simple answer is that the act of writing a check or entering a credit card number, regardless of the amount, is an act of consumer volition that completely changes how an advertiser sees a reader. Writing a check for any amount even 1 cent means that you actually want the magazine, and will presumably read it and treasure it when it arrives.

However, there are plenty of magazines that do give away free subscriptions. In this case, having a lot of desirable executives on their subscription rolls, each of whom has nominally filled out a form claiming to want the magazine, compensates in the eyes of the advertisers for the fact that these readers have not put any actual money where their mouth is.

A similar type of focused circulation has also been successful for Vice, an irreverent lifestyle magazine aimed at twentysomethings.

The small print publication eventually grew into a record label, a retail clothing chain, Vice Film, and VBS. That price is all about perception. It is the lowest sum that is not too low to devalue the product. Lower is better for subscribers, since the less they have to pay, the more likely they are to sign up. But higher is better for advertisers, because the more a consumer pays for a product, the more they value it.

But in most cases, just a penny—a seemingly inconsequential price—can stop the vast majority of consumers in their tracks. So why does it have so much impact? The answer is that it makes us think about the choice. That alone is a disincentive to continue. If you charge a price, any price, we are forced to ask ourselves if we really want to open our wallets.

But if the price is zero, that flag never goes up and the decision just got easier. So we tend to choose things that require the least thinking. This refers mostly to the cognitive load of having to process information—figuring out who should do what, whom to trust, and the like. Szabo extended this to purchasing decisions. All these schemes are destined to fail, Szabo concluded, because although they minimize the economic costs of choices, they still have all the cognitive costs.

Many potential customers would be put off by the payment and decision process. Meanwhile the revenues generated by such micropayments are, by definition, tiny. Szabo was right: Micropayments have largely failed to take off. How can SampleLab not charge for every item it stocks? Most monthly revenue comes from selling shelf space and customer feedback. With 47, members, SampleLab is so hip, teens now have to make reservations one week in advance.

SampleLab can carry 90 products at once. By offering extra free goods, SampleLab turns most of its members into a focus group. Teens fill out product-specific surveys online, on paper, or via keitai cell phone. If 20 percent of its clients pay for the feedback, SampleLab earns a little less than half the monthly revenue it does renting shelf space.

What free grants, in exchange for forsaking direct revenues, is the potential of mass sampling. After examining mental transaction costs, Clay Shirky, a writer and NYU lecturer, concluded that content creators would be wise to give up on dreams of charging for their offerings: For a creator more interested in attention than income, free makes sense.

In a regime where most of the participants are charging, freeing your content gives you a competitive advantage. In a world of free content, even the moderate hassle of micropayments greatly damages user preference, and increases their willingness to accept free material as a substitute.

One friend tells me the giveaway furniture he puts outside his house is only taken at night. But those costs aside, taking money out of the equation can greatly increase participation. Venture capitalist Josh Kopelman of First Round Capital looked at this psychological barrier to paying and realized it made nonsense of the usual teaching about pricing strategy. Rather than supply-and-demand curves turning price into a classic econ calculation, there are really two markets: free and anything else.

And the difference between the two is profound. In a sense, what free does is bend the demand curve. Suddenly, the demand shoots up in a nonlinear fashion. The biggest gap in any venture is that between a service that is free and one that costs a penny. Give a product away and it can go viral. The truth is that zero is one market and any other price is another.

But in the s, a new branch of economics emerged that looked at the psychology driving economic behavior. The first experiment involved chocolate. Note: Behavioral economists have limited budgets and limited time, so a lot of their experiments involve a folding table, candy, and random college students. So take the results as directionally interesting rather than rigorously quantitative. They priced the Lindt truffles at 15 cents about half the wholesale price and the Kisses at 1 cent.

The customers behaved pretty rationally, calculating that the difference in quality of the two chocolates more than made up for their difference in price: 73 percent chose the truffle and 27 percent chose the Kiss. Then Ariely introduced free into the equation, lowering the price of both chocolates by 1 cent. Now the Lindt truffle was 14 cents and the Kiss was free. Suddenly the humble Kiss became a hit. Sixty-nine percent chose it over the truffle.

But the introduction of zero caused the customers to reverse their preference. The psychologically confusing thing in this case is the comparison between two products, one of which is free. Sometimes free makes perfect sense, as in the case of a bin of free athletic socks in a department store.

But imagine if you went into the store expressly to buy a pair of socks with a nicely padded heel and gold toe. What is it about free that is so enticing? Ariely explains: Most transactions have an upside and a downside, but when something is free! The real allure of free! And so, given the choice, we go for what is free. There are similar experiments at a larger scale going on every day around us, often by accident.

When Amazon rolled this out, it worked great: Sales of second books skyrocketed. Well, everywhere except in France. What was different about the French? It turns out that they were presented with a slightly different offer. When Amazon rolled out free shipping across all of its national sites, the French one mistakenly set the shipping price to 1 franc, or about 20 cents. That tiny amount completely eliminated the second-book effect. When Amazon fixed this and France joined the other countries in offering free shipping, the French consumers behaved like everyone else and decided to add the second book to their shopping cart.

Interestingly, Amazon was actually sued for this. A French law, pushed through by then- minister of culture Jack Lang, forbids booksellers from offering discounts of more than 5 percent off the list price. In , the French Booksellers Union took Amazon to court, arguing that it was exceeding that discount when the free shipping was factored in.

After all, free would surely bring in more than enough to make up the difference. Zappos, the online shoe retailer, goes even further: It offers free shipping both ways: to you and, if you want to return the shoes, back to the warehouse. The point is to eliminate the psychological barrier to buying shoes online, which is that they may not fit.

What Zappos wants you to do really! The only reason to drive to a shoe store is to know that the shoes fit and look good on your feet. By bringing the shoes to you at no additional cost, Zappos reaches risk parity with a physical store, and gains convenience advantage.

The only problem, says CEO Tony Hsieh, is that many people still feel guilty about ordering more shoes than they want and sending them back. Once again, the enemy of free is waste. Ariely demonstrated the distinction between these two realms with another experiment: He put six-packs of Coke in college dorm refrigerators.

He also left plates of money. But taking actual money felt like stealing. They kept returning to the rack, understandably impressed by the opulent display of gratis goodies. Also, I bet they would have been happier with their decision to take a snack. They would have thought about whether they really wanted one, and probably waited until they were hungry. This is one of the negative implications of free. Charging a price, even a very low price, can encourage much more responsible behavior.

The authors of the Penny Closer blog tell the story of a friend who volunteers for a charity that provides people who are down on their luck with transportation—free bus tickets, to be exact. Suddenly, people lost fewer tickets. Since they had invested in it, clients seemed to be more careful not to lose it. The flip side of both these stories is that the imposition of a price, no matter how low, typically decreases participation, often radically. In the Google case, people would take far fewer snacks if they had to pay.

In the case of the charity, it distributed far fewer bus tickets. Like every powerful tool, free must be used carefully lest it cause more harm than good. This same calculus is the foundation of a big part of the freemium economy. You migrate into a paying customer, the premium user in the freemium equation. One of my side projects is an open source hardware company called DIY Drones developing and selling aerial robotics technology.

Even in its nascent form, open source hardware is a really interesting example of how to make money from free. The way most open source hardware companies work is this: All the plans, printed circuit board files, software, and instructions are free and available to all.

You can build your own, with full instructions, which can be found at arduino. Or you can buy one. Most people do the latter. The Arduino team make their money from a certification license fee they charge the companies and retailers that make and sell the boards.

She and her business partner, Phillip Torrone, have a simple business model built around free, which I have shamelessly copied for DIY Drones. Build a community around free information and advice on a particular topic. That may turn out to be almost everyone. Do it again and again, building a 40 percent profit margin into the products to pay the bills. The first is the mental calculation we do when we value our time.


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A thoughtfully redesigned Logic Pro makes it easier than ever to translate musical inspiration into professional productions. K9 Web Protection is a free Internet filter and parental control software for your home Windows or Mac computer. Wise Unformat Disk is a software utility created to solve almost all data loss scenarios due to logical failure. MultiMedia Logic is an Millenium 3 is a software for Millenium 3 logic controller.

The Millenium 3 is the latest generation of micro-PLCs. Logic Gate Simulator is an open-source tool for experimenting with and learning about logic gates. Logic Gate Simulator Logic Friday is a freeware tool for students, hobbyists, and engineers who work with legacy digital logic circuits based on standard IC packages.

Logic Friday you can: – Enter a logic Ladder Logic Simulator is a The compiler system, featuring compiler, linker, assembler, resource Editor and a lot of useful tools. LogicCircuit — is free, open source educational software for designing and simulating digital logic circuits. Video Converter 3. PSTViewer Pro 6. Before reinstalling Windows Download the Windows Windows Mac. Windows Users’ choice Logic pro for windows 7 64 bit Logic pro for windows 7 64 bit Most people looking for Logic pro for windows 7 64 bit downloaded: Logic Pro.

K9 Web Protection. Ashampoo Burning Studio. MultiMedia Logic. Millenium 3. Driver Booster. Logic Gate Simulator. Logic Friday. Ladder Logic Simulator. How to easily reinstall Windows How to install custom themes on Windows How to use WhatsApp? Twitter Facebook.


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