Chris Anderson is my homeboy
If you think my posts are long (yes, Amitava Mitra, I’m talking to you), you should try Chris Anderson’s article Free! Why $0.00 Is the Future of Business, which came out in Wired yesterday. It’s six pages of essential reading for people looking to understand the economics of a market where everything is trending towards costing nothing.
Chris wastes no time lamenting the moral turpitude of a society that expects a free lunch. You might or might not think free is a good idea, but it doesn’t really matter; it’s already happening:
A decade and a half into the great online experiment, the last debates over free versus pay online are ending. In 2007 The New York Times went free; this year, so will much of The Wall Street Journal. (The remaining fee-based parts, new owner Rupert Murdoch announced, will be “really special … and, sorry to tell you, probably more expensive.” This calls to mind one version of Stewart Brand’s original aphorism from 1984: “Information wants to be free. Information also wants to be expensive … That tension will not go away.”)
Instead of reverse engineering the present situation, he deftly dissects the dynamics at work and identifies the opportunities presented by the shift towards free. He tells the story of the Father of the Cross-Subsidy, King Gillette, who at the turn of the century realized that he could sell more razor blades by giving away the razors. He defines the six business models built on the basis of free: ‘freemium’, advertising, cross-subsidies, zero marginal cost, labor exchange, and gift economy. He explores the economics of abundance.
I may well be biased towards this article because it touches on so many of the topics I’ve been discussing recently, but just because Chris is my homeboy doesn’t mean it isn’t a darn good hunk of words. So go on, brew yourself a cup of tea, kick back and enjoy the mental stimulation. I promise it will be worth it.
