Customer Reviews

Free: How Today's Smartest Businesses Profit by Giving Something for Nothing

5 star:		(53)
4 star:		(55)
3 star:		(21)
2 star:		(16)
1 star:		(13)

 

 

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.

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.

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.

I was eager to read "Free," since as an author with an online presence myself, I have used free strategies and would like to know how to implement them more effectively.

The book really hooked me in the beginning, but wandered thoughout the middle as a hodgepodge of poorly-chosen or explained examples, and then finished more strongly with summaries of free-style strategies.

My biggest disappointment was that in the 274-page guide, Anderson devoted barely two pages to the strategy of free books in particular. I thought this was an important case study that deserved more coverage, as it can tie together an older model of book publishing with new media and free electronic outreach.

I really objected to some of the overlooked opportunities to discuss the ethics of some free models, such as the "free" electronic health record and practice management software that is given to doctors in return for their patients' anonymized medical chart information. The patients' health history data is resold for $50 to $500 per chart. I am extremely uncomfortable with that kind of commercialization of the doctor-patient relationship, which I assume goes on without the patients' knowledge or consent. Yet Anderson does not discuss this as a problem.

He brings up the Corn Economy and the impact of cheap, ubiquitous corn, invoking Michael Pollan's The Omnivore's Dilemma, while largely missing the point that industrial corn-dominated agriculture with its economies of scale is in the process of ruining our diet and environment. Free in the short term can have disastrous, displaced costs in the long term.

Also, his discussion of Open Source software is quite bizarre, being described from the point of view of how the juggernaut Microsoft learned how to compete with Linux. Not only does this give short shrift to the Open Source story (full disclosure: my husband is an Open Source guy), but explained from Anderson's Wired-centric point of view, the Open Source example comes across as a geek-insider story whose point will be lost on a lot of non-techie readers, whom Anderson should be trying to reach.

"Free" has some interesting ideas, but needed more incisive analysis and editing. The book is trying to be many things--an argument, a history, and a strategic business guide, and for this reader, it fell short of the target.

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).

Chris Anderson cites Ryanair, the low-cost European airline, as an example of how airfare can be "free". Ryanair is more an example of "Gotcha Capitalism" than free. I have no problem with the extras that Ryanair charges but there are hidden unavoidable fees - such as fee for booking with a debit or credit card and the cost of getting from some far-flung airport into the city you supposedly paid to be flown to. This is in addition to the "avoidable" charges for on-line check-in, priority boarding fee, checked baggage fee, name change fee etc. Ryanair is reported to be seriously considering charging passengers to use the toilet on their flights.

This is not free in the same sense that information is free on the web. Ryanair is no Google. It is no Youtube. It is no Skype. It is no cnn.com. Anyone who had paid three times the listed fare for a Ryanair flight will understand.

Chris Anderson seems to be confusing nickel and diming with free.

I recommend reading "Gotcha Capitalism" as an alternative: Gotcha Capitalism: How Hidden Fees Rip You Off Every Day-and What You Can Do About It

I have serious doubts about the strength of Anderson's research since I knew that parts of his previous book "The Long Tail" was really a lot of conjecture rather than being based in fact and there has been a decent amount of controversy about his not citing his references for this book and a lot of what he used is Wikipedia. Wikipedia is helpful, but at the same time can be edited by just about anyone and sometime be totally wrong.

The most valuable thing to take away from this book is that things are always being driven to a price of 0. In most businesses floors are usually (incorrectly in my opinion) drawn at marginal cost or some other price floor to prevent prices from going too low. When you remove the impact of a marginal cost the price will inevitably drive down towards 0. The main examples that are given in this book are things like MP3's or DVD's since digital mediums like those are reproducible at basically no additional cost and no loss in quality. Anderson goes on to explain how these models upset traditional pricing models for these markets and new methods of making a profit must be thought up and implemented.

Overall, this was an interesting idea, but since the vast majority of our commerce is not for digital products it tends to disconnect from those markets and their pricing models.

While I don't usually enjoy books on economic principles, I do love books on computer history and start-up Internet companies. I loved the PBS mini-series, Triumph of the Nerds and its follow-up about the Internet, Nerds 2.0. Discovering how companies start and sometimes fail fascinates me. (After I write this, I will purchase the DVDs of Nerds 2.0. Perhaps you should as well).

Chris Anderson's Free satisfies my desire to read about the success of companies in the digital age. A writer for Wired magazine, Anderson offers this seemingly contradictory hypothesis: companies will make money by giving away things for free. He uses two powerhouse companies to frame his argument: Gillette and Google. King Gillette (yes, that's his name) was a struggling salesman and inventor who come up with a genius idea: give away the razor and sell the blades. Because of this, an entire industry of disposable razors was born. That is why today the razor is free or cheap, but the blades cost two bucks each. Gillette makes up whatever money they "lost" on the lower price of the razor. I suppose this is why heroin peddlers give away the first few tastes for free (not that I have any idea if this is true from personal experience. All my drug-trade knowledge comes directly from The Wire).

Much of the book focuses on Google, as it provides an excellent success story of a company giving away free services (email, search engine, documents, maps, you name it) but is incredibly profitable. Free examines how this works and why.

The essence of free in the digital world is summed up in three commodities that are "too cheap to meter" and they can be given away: bandwidth, storage, and processing. Because these can be given away, companies should find ways to give away services and content.

Music and digital piracy is discussed several times in the book. According to Anderson, if it is digital, it will one day be free. He addresses the discussion of music piracy, and seems to lean on giving it away for free. He uses musician Derek Webb as an example. He gave away music content online if users provide email and a zip code. Using the zip codes, he sent invitations to shows around the U. S. He found that more people were coming to his shows and buying merchandise, making up for the money he "lost" in giving away his music. (This is coincidental, but iTunes is currently playing Derek Webb's music as I type. I don't even like Derek Webb. Does he have my zip code?)

I thoroughly enjoyed this book, and it helped me see possibilities for a new economy in the digital age. While I don't have a business, it still helped me to look for ways in which I can give away content online (this blog, for example) to gain something (your applauding and gushing comments, perhaps).

Most importantly, reading this and The Shallows: What the Internet Is Doing to Our Brains together makes me be weary of the power held by Google.

By the way, I listened to a free audio book of this work. Strangely enough, when I was at a bookstore last week, I had the temptation to purchase a copy of it to review. Chris Anderson knows what he is talking about!

Chris Anderson's book Free: The Future of a Radical Price, is an excellent compilation of evidence and examples persuading us to buy into the concept that Free is here to stay. But with so much technological change, we don't need much convincing that another dramatic shift is upon us. One way Americans deal with scarcity is uncovered in the ironic determination to eradicate starvation decades ago; now today's generation is combating obesity. This ironic relationship defines the path for his book, detailing how the future of business will make money around the notion of Free. According to Anderson this isn't a fad, these new models like "freemium" are here to stay.

As a customer, there is a huge difference between what is free and what is cheap. Citing Dan Ariely, professor at Duke University, he highlights "zero is not just another price, it turns out, zero is an emotional hot button," (p 63). The concept of Free is important because the majority of company's today strive in an environment where raising demand for one thing, is gained by giving a complimentary item away for free. This is showcased in the story of Gillette razors.

The meat of Anderson's book sits on the concept of Moore's Law, which concludes the cost of technology is cut in half every few years and even quicker at times. With costs like this, companies are able to shift business models by focusing on making profit through programs like Google's Adsense or thrive off the premium service subscribers from sites like Flickr or Amazon. Anderson provides a lot of evidence to back up his hypothesis with case studies from Microsoft, Craigslist and the Chinese music market, as well an easy to understand account of economics.
Taking a look at the freemium model, one of the categories Anderson describes as the most popular web business model, raises two questions. One, he mentions that people don't often value items they get for free as much as things they pay for. But we see in his analysis of loyalty to social networking sites like Facebook that users would actually convert to paying customers because they value the network of friends so much. In this case, I would argue the value is not monetary; it is the gravity of the network. It is hard to mimic the success of services that have gained popularity from viral marketing due to taking advantage the notion on Free.

Two, looking at the ratio of free users to customers who have premium services, I question how this switch takes place, and if this concept of having the top 5% carrying the rest was reached through trial and error. Anderson cites Jonathan Handel and his reasons why Free will stick around, one being that people believe everything should be free (regarding media). Long term, this notion of Free changes businesses dramatically, but are economists wondering what will happen if those free products or services escalate?

Anderson talks in length about scarcity, and we see with Moore's Law that storage and bandwidth is getting cheaper, thus the reaction for companies to increase their free offerings without losing money. We could say that customers create content at a specific rate (and that rate likely won't increase on an individual level due to time constraints) that will not keep up with the exponential amount that technology costs decrease. Will fewer customers upgrade to premium services because they'll never reach a ceiling? What will that model look like? Or is it safe to assume that if customers are given more space on Flickr, they will fill it? Or more game time, they will play it? This brings into question how big the free economy is, but it is not just a numbers game.

Contradictory to the idea of scarcity is music. There are so many different ways to access music without legally purchasing it that a "piracy paradox" has emerged in China. This is a refreshing look at piracy and an excellent addition to the discussion of Free. "Piracy is a form of zero-cost marketing, which brings their work to the largest possible audience," (p 200). This hits on the idea of "max strategy" which uses Free to reach the biggest audience, even if all avenues don't make money. It would be nice to see this strategy being used in the United States, although dealing with inflated egos might be the first hurdle to cross.

Still skeptical about this Free idea? The conclusion of the book serves up a nice array of objections to this model, as well a precise rebuttal from Anderson. Overall this book is a must read for any entrepreneurs struggling with their current business model, and students in programs like the Masters of Communication in Digital Media. The Internet has become a whirlwind of links, brilliant ideas, and scams that are sometimes hard to breakdown; Anderson does a great job painting a clear picture. With everyone having Internet access and the cost to create so low, it's nice to have a book to put things into perspective by easily explaining why you can make money by giving things away for Free.

[...].

Chris Anderson's Free: The Future of a Radical Price was a fresh, yet conventional take on product promotion in today's market. Anderson demonstrated the benefits that giving away products or services for free can have on companies' sales or demand of certain products. As the concept of "free" has been used in the past for product promotion, the use of technology has created a whole new meaning to the concept. In the age of the internet and unlimited information, companies need to come up with creative ways to lure customers in and have customers actually pay for products rather than "stealing" them off the internet.
As certain industries are opening up to this concept over the internet (ie. Music, movies), Anderson reminds readers that there are hidden costs of free for both consumers and companies. These costs can range from the lack of value in the free product, to increasing environment concerns, to decrease in product quality. Anderson does a great job at pointing out the advantages and the disadvantages of free.
I liked Free by Anderson much more than The Long Tail, also by Anderson and was about the infinite amount of choices offered on the internet. I thought Anderson explored and developed his thoughts more so in Free than in The Long Tail. The concept of "free" is not new, however, I would recommend this book to business owners, even if their business isn't done primarily over internet. Sometimes business owners feel that giving away products or services for free will hurt their business, when in fact; it could really help their business. I enjoyed this book and would recommend it to others.