Free: The Future of a Radical Price July 6, 2009Posted by David W. King in Uncategorized.
In the digital marketplace, the most effective price is no price at al,
In his new book Free: the Future of Radical Price (due for release July 7), Chris Anderson (The Long Tail) 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.