Free: The Future of a Radical Price (Hardcover)

~ (Author)

Editorial Reviews

From Publishers Weekly

Starred Review. In the digital marketplace, the most effective price is no price at all, argues Anderson (The Long Tail). He illustrates how savvy businesses are raking it in with indirect routes from product to revenue with such models as cross-subsidies (giving away a DVR to sell cable service) and freemiums (offering Flickr for free while selling the superior FlickrPro to serious users). New media models have allowed successes like Obama's campaign billboards on Xbox Live, Webkinz dolls and Radiohead's name-your-own-price experiment with its latest album. A generational and global shift is at play—those below 30 won't pay for information, knowing it will be available somewhere for free, and in China, piracy accounts for about 95% of music consumption—to the delight of artists and labels, who profit off free publicity through concerts and merchandising. Anderson provides a thorough overview of the history of pricing and commerce, the mental transaction costs that differentiate zero and any other price into two entirely different markets, the psychology of digital piracy and the open-source war between Microsoft and Linux. As in Anderson's previous book, the thought-provoking material is matched by a delivery that is nothing short of scintillating. (July)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

From Bookmarks Magazine

Although Chris Anderson puts forward an intriguing argument in this cheerful, optimistic book, many critics remained unconvinced. They praised his engaging writing style, his amusing examples and anecdotes, and his clear explanations of complicated concepts and technologies, but they still questioned his conclusions. In addition to Anderson's own admission that YouTube -- one of his chief examples -- has been a financial black hole for Google, reviewers cited their own examples of industries that seem to run counter to Free's generalizations, such as broadcast television's fiscal struggles in the face of premium cable's expansion. Though some trends seem to point in the direction of Free, the jury remains out for the present.

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Product Details

• Hardcover: 288 pages
• Publisher: Hyperion (July 7, 2009)
• Language: English
• ISBN-10: 1401322905
• ISBN-13: 978-1401322908
• Product Dimensions: 9.2 x 6.4 x 1 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 3.6 out of 5 stars  See all reviews (74 customer reviews)
• Amazon.com Sales Rank: #1,941 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

30 of 35 people found the following review helpful:

5.0 out of 5 stars Great ideas and even better when implemented, July 24, 2009

By	J. Kelly "GA Book Fan" (Atlanta, GA) - See all my reviews (REAL NAME)

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.

79 of 102 people found the following review helpful:

2.0 out of 5 stars So glad I got it, well, free., July 20, 2009

By	Concerned mom - See all my reviews

At the "radical price" of $0.00, which was offered for a limited time, it was worth flipping through the ebook, but $26.99 for the hardcover, with no discounting? I don't think so. The book reads like an energetic but not very trustworthy blog--breathless, careless, and shoddily researched and argued.

It's been widely discussed that Chris Anderson lifted passages straight out of Wikipedia without attribution; now that the credits have been added to the electronic text, it looks pretty silly to see the notoriously uneven online reference cited again and again. I guess it was too slow/too old-school (too expensive?) to bother to do the primary research we have come to expect in a book--or even in a decent high school paper. Again and again the text feels dashed off and sloppy. Just a few examples from Chapter 7, which starts off, "On February 3, 1975, Bill Gates, then 'General Partner, MicroSoft' wrote an 'Open Letter to Hobbyists...'" and says on the following page that "Microsoft, now without a hyphen, grew rich." What hyphen? Does he mean a capital s? There's a subhead, "The Penguin Attacks," that's incomprehensible to people who don't already know the history of free software he's supposed to be explaining; then another subhead, "Case Two," without a "Case One."

What is "free," anyway? A lot of it sounds like a variation on bait-and-switch: e.g., give away a free cell phone but charge activation and monthly fees; offer a free basic version of a product but charge for the "premium" edition people really want; give doctors free software for electronic health records in return for access to data on those doctors' patients (yikes). Chris Anderson applies a version of the model to himself: "So you can read a copy of this book online (abundant, commodity information) for free, but if you want me to fly to your city and prepare a custom talk on free as it is applies to your business, I'll be happy to, but you're going to have to pay me for my (scarce) time. I've got a lot of kids and college isn't getting any cheaper."

Sadly, based on the quality of the thinking in this (free) book, I can't recommend paying for any premium version. Let the buyer beware.

9 of 10 people found the following review helpful:

4.0 out of 5 stars Steal this book! Didn't we already try this?, August 7, 2009

By	Todd Stockslager (Raleigh, NC) - See all my reviews

Abby Hoffman's one-man pirate promotion didn't catch on forty years ago, but Anderson suggests he might have been on to something. Anderson is Editor in Chief of Wired magazine, where I first read the outline of this idea in an article about a year or so ago.

OK, that is not quite the thesis of Free, but it makes an interesting opener to suck you in--which IS the essence of one of Anderson's business models for Free:

1. Direct Cross-subsidies: give away one thing to sell another (such as giving away cell phones to sell the air time).

2. Three-party markets: sell to one type of customer to subsidize another (give away content to sell information about the customer)

3. Freemium: give away a basic product or service subsidized by a small subset of customers willing to pay for a premium version (give away web content, sell print version--the model used for this book, which lists for 26.99 but is available for free download in an abridged audio book format)

4. Non monetary markets: anything given away with no expectation of payment (reputation-based websites such as Facebook--but also incorporates pure gift economies and piracy).

Why does Free matter now? Anderson quotes an old argument that "Information wants to be free" (both in price and distribution) and gives it a technical basis by examining the price of bits over time as they have trended toward zero. In fact, says Anderson, when prices get so close to zero, businesses would be better served to stop trying to measure it and recognize that Free may be the only model that sells. I'm no economist, so I'm not sure he proves his argument with any scientific rigor, but it does make for an interesting debate starter. I will say that I'm surprised he didn't touch on Apple's business model of giving away iTunes freely while selling the iPod at a premium price compared to other MP3 players because the added value of the simplicity and ubiquity of iTunes justifies the expense.

As you might expect from this focus on bits, much of Anderson's argument applies primarily to the online digital economy, and not to the brick and morter or manufacturing sector (atoms are recalcitrant material bits that do have costs for creating and moving that won't ever reach zero), although he does suggest that even manufactured products are under the same pressure toward Free. Scattered throughout the book are sidebars illustrating examples of products and companies that price their products at zero and explaining how the business model is profitable.

The discussion of reputation-based websites like Facebook and Amazon product reviews was quite interesting. He reports on attempts to calculate a dollar value for Facebook friends and relationships (Using the Burger King Whopper as the medium of exchange--really!); while the results are certainly more SWAG than Burger King swagger, the concept is broader and more meaningful than my brief description makes it sound.

For example, he touches briefly on the motivation behind folks, like myself, who spend considerable time writing blogs or reviewing products for Amazon. Is it a pure gift exchange? Well, not quite, for Amazon Vines members, who can select from a limited set of pre-publication review copies of books at no charge. In my nine months in the program I have received and reviewed about 40 books, with an estimated value (if I assume $25 per book with shipping) of about $1,000. Review copies, of course, are often incomplete (without pictures, indexes, or final hardback covers) so they are worth less than a final sales copy,, and had I been paying I would not have bought all these books. I average at least 30 minutes per review (not including the time to read the books, and I read them all cover to cover), which would suggest I am being "compensated" about $50 per hour for my reviewing time. However, over the last three years I have reviewed a total of over 700 products (mostly books, some DVDs and CDs) without compensation, so that my wage drops to under $3 per hour. Clearly, this is not a profitable business model for me.

For Amazon, on the other hand, this is a very profitable business model - as of August 10, 2009, for an investment of near zero (most of the $1,000 worth of books they have sent me are review copies that cost Amazon nothing) Amazon has purchased over 700 helpful votes. If 5% of those turn into purchase, that's 35 books sold for a net marketing cost very near zero dollars per sale. Multiply 35 sales times the tens of thousands of buyers who contribute Amazon reviews, and Amazon is doing a masterful job turning Free into profit.

From my perspective, as Anderson says:

"In short, doing things we like without pay often makes us happier than the work we do for a salary. You still have to eat, but . . . There is more to life than that.

Free is not a magic bullet. Giving away what you do will not make you rich by itself. You have to think creatively about how to convert the reputation and attention you can get from Free into cash."

So while I do other things for the money that pays my bills, writing for a living remains my big Plan B, and finding a way to profit from Free remains my dream.