Free: The Future of a Radical Price

We've heard that information wants to be free. We're all for it as long as we are on the receiving rather than the giving end. The value of Chris Anderson's work is in showing us exactly how "free" can work. It turns out it's not a new idea: think radio and television in the days of antennas. Most Google services are free (paid for by ads). On-line textbooks can be free by selling add-ons such as the right to print chapters, study guides, audio summaries of chapters, downloads to electronic book readers, etc. MIT's courses can be given away because you still can't buy the degree. On-line games can be free because 10% or so of users will ante-up for extras or premium versions that enhance the game experience. Free trial versions of software obviously rely on users buying the product after the trial. Put your book on-line for free and recoup your money on the lecture circuit and through consulting fees. If you're an unknown rock group, give away free CDs until you build your audience. If you're a known rock group, try giving away your songs on-line for free or for "whatever you think is fair" and you might average $6 a CD and still make a killing while you build up your concert tour audience. Give away the printer or the cellphone and make your money on ink cartridges and calling plans. Anderson, editor of Wired and former editor of US business for the Economist, catalogs a lot of good ideas and in the process convinces us that "Free" is here to stay.

Economists swear there is no such thing as a free lunch. Someone always pays. That may be true in the "atoms" world of physical things, but Chris Anderson explains why it does not apply in the "bits" world of the Internet, where "free" is the ruling paradigm. If, as Stewart Brand (founder of the Whole Earth Catalogue and the Whole Earth 'Lectronic Link) said, "Information wants to be free," now it is, at least in many instances, particularly online. While the idea of giving things away as a promotion or loss leader isn't new, Anderson's fresh insight is that giveaways are becoming a business imperative that companies are going to have to accept and use. Actually, companies online and off can become immensely profitable when they give products or services away for free to bring customers in and to create the need for future ancillary product sales (in other words, take the printer and buy the ink). Anderson, author of The Long Tail and editor of Wired magazine, tells you how to make money by providing most of your offerings for free and charging for just a few of them. getAbstract recommends this perceptive, innovative, idiosyncratic book to all marketers.

Because of the ongoing drop in the cost of bandwith, storage and computer processing power, which brings the cost of each of these digital age services to almost zero, "free" is becoming a more prevalent price with real power. For the business person and others wishing to profit from "free", the trick is to figure out how to sell services or products related to the free one. Author Chris Anderson, who also wrote Long Tail, The, Revised and Updated Edition: Why the Future of Business is Selling Less of More uses Google as one of his primary examples of how free functions in this new economy. Google provides free internet searches and makes money off the targeted ads and premium products. Music groups have gotten on board, and have let go of the idea that they muist rely on copyright protection, and have benefited handsomely by giving away their music and more than making up for it in concerts, premium versions of their music and band-related paraphernelia. Not all "free" providers have managed to "monetize" their offerings. Facebook and Twitter are two examples, although the latter is on the verge of attempting to do so. The above successes have occured in what Anderson labels the "bits" world that relies on the electronic generation of information, but free can also work in what Anderson calls the "atoms" world, where products are things you can hold or services that you can experience. Telecommunications companies, for example, give you a free cell phone but make their money on usage and ring tones. Anderson provides a good number of examples in table form of both bits and atoms free. For me, the most intriguing discussion centered on what Anderson calls "finding the scarcity among the abundance", which is where the money is to be made from free or to where the value migrates. I wish there had been more concrete examples because my impression is that those of us who are not necessarily gifted in the geek data and computer world might find this opportunity the best one to exploit. I also wonder if there are opportunities for free to occur in government, or is this phenomenon limited to the private sector? In any case, the book is an interesting read and will open the reader's eyes to the reality of this new economic force.

I read the original WIRED magazine article written by Mr. Anderson that this book is based on back in February 2008; I've been anxiously awaiting this book... and I've just finished it. First off, I've implemented a few "freebies" in the past year that I give away in my line of work; the question was whether it would pay off. It did. I offered something of value (to me, and I believe to my customer) and waited to see if interest in the free item would increase sales of a companion item. Sales were there. So many people are attacking the book for various reasons, but for me the key question for rating this book was "Is the author's information accurate and can it hold up to real-world results?" The answer is Yes. A lot of things in the book aren't relevant to me, but I've taken what I can from it (in addition to the original article) and made some changes in how I do business. (I'm a small business owner, not a corporate giant.) You can agree or disagree with the book's overall theme, but my findings are that the book has a solid grasp on how any business that has any Internet-related sales or support must adapt. The author's argument about how costs are moving to zero for the "bits" world is dead-on. I find it humorous that so many negative reviews of the book are simply about the price of the book (or the lack of price for some of the free versions). The book is about the concept of Free. Some people are seeing "Free" on the cover and whining that it has a price??? The book isn't light reading - it's got some complicated concepts that the reader must grasp, especially business owners. For that reason, I could never listen to an audio version - I've highlighted my text at various points that I want to come back to and consider how I might use the info with my work. I give the book 5 stars - I enjoyed it, it gave me much to think about, and I didn't feel (when done) that I'd been ripped off... the value of the information contained in the book is worth much more to me than the $20 I paid.