Free: The Future of a Radical Price [Kindle Edition]

Chris Anderson (Author)

Book Description

The New York Times bestselling author heralds the future of business in Free.

In his revolutionary bestseller, The Long Tail, Chris Anderson demonstrated how the online marketplace creates niche markets, allowing products and consumers to connect in a way that has never been possible before. Now, in Free, he makes the compelling case that in many instances businesses can profit more from giving things away than they can by charging for them. Far more than a promotional gimmick, Free is a business strategy that may well be essential to a company's survival.

The costs associated with the growing online economy are trending toward zero at an incredible rate. Never in the course of human history have the primary inputs to an industrial economy fallen in price so fast and for so long. Just think that in 1961, a single transistor cost $10; now Intel's latest chip has two billion transistors and sells for $300 (or 0.000015 cents per transistor--effectively too cheap to price). The traditional economics of scarcity just don't apply to bandwidth, processing power, and hard-drive storage.

Yet this is just one engine behind the new Free, a reality that goes beyond a marketing gimmick or a cross-subsidy. Anderson also points to the growth of the reputation economy; explains different models for unleashing the power of Free; and shows how to compete when your competitors are giving away what you're trying to sell.

In Free, Chris Anderson explores this radical idea for the new global economy and demonstrates how this revolutionary price can be harnessed for the benefit of consumers and businesses alike.

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.

See all Editorial Reviews

Product Details

• File Size: 942 KB
• Print Length: 300 pages
• Page Numbers Source ISBN: 1401322905
• Publisher: Hyperion (July 7, 2009)
• Sold by: Amazon Digital Services, Inc.
• Language: English
• ASIN: B002DYJR4G
• Text-to-Speech: Enabled
• X-Ray: Enabled
• Lending: Not Enabled
• Amazon Best Sellers Rank: #65,087 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
  • #13 in Kindle Store > Kindle eBooks > Business & Investing > Economics > Money & Monetary Policy
  • #47 in Books > Business & Investing > Economics > Money & Monetary Policy

Most Helpful Customer Reviews

93 of 104 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

Format:Hardcover

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.

16 of 16 people found the following review helpful

5.0 out of 5 stars Freeconomics August 19, 2009

By bronx book nerd VINE™ VOICE

Format:Hardcover

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.

6 of 6 people found the following review helpful

3.0 out of 5 stars Fine, but says too little about the dark side of free November 7, 2009

By Paula L. Craig VINE™ VOICE

Format:Hardcover

I found Anderson's book to be a good introduction to the various strategies for making money from giving away a free product. Excellent if you're trying to start a business and need some ideas.

The book says far too little about the many downsides of pricing things at zero. Anderson briefly mentions that free is a problem when it comes to pollution and other negative externalities. In the next paragraph he says that we are increasingly starting to measure and account for these negative externalities, so it's not a problem. I agree that's what should be happening, but there hasn't been a lot of progress on this so far. In some respects things have even been going backwards in recent years. There are plenty of people out there who believe that regulation of any sort is wrong, and that the government should get off people's backs. So much for trying to correct for negative externalities.

I was glad to see that Anderson mentions the downsides of free parking. However, in my opinion one short quote on this subject is far from an adequate treatment. The ideas that parking should be free and that congestion-free roads and highways should be provided as a public service by government have been central in creating the mess that is the current U.S. transportation system, as well as in the declining quality of life in the U.S. For more on this, see The High Cost of Free Parking, as well as The Geography of Nowhere: The Rise and Decline of America's Man-Made Landscape.

Anderson believes in the cornucopia economic theory, that stuff will always get cheaper because technology marches on. Please don't take this as gospel without reading some contrary views. Some things have indeed gotten better and cheaper due to technological progress. Other things have gotten better and cheaper because fossil fuels have been plentiful and cheap. Cheap oil, coal, and natural gas are by no means guaranteed to be available in the future. Fossil fuels also have plenty of negative externalities which are not adequately accounted for in modern economies. As a start on this subject, see Eating Fossil Fuels: Oil, Food and the Coming Crisis in Agriculture and Peak Everything: Waking Up to the Century of Declines (New Society Publishers).

More About the Author

I'm the editor of Wired Magazine and the author of "The Long Tail: Why the Future of Business is Selling Less of More", "FREE: The Future of a Radical Price" and "Makers: The New Industrial Revolution".

I live in Berkeley, CA, with my wife and five children.

In my spare time, I have a hobby-gone-wrong in the form of an aerial robotics community at DIY Drones and 3D Robotics, a company I co-founded that makes aerial robotic technolgy. We develop open source autopilots and unmanned aerial vehicles (UAVs), which some people find thrilling and others find worrying. You can make up your own mind: diydrones.com