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Free: The Future of a Radical Price
Reveals how to run an online business profitably in spite of the Internet's inherently free culture, disseminating the principles of a ''priceless economy'' in six categories that pertain to advertising, labor exchange, and advanced-version fees.
288 pages, Hardcover
First published January 1, 2009
About the author
Chris Anderson
97 books712 followersChris Anderson was named in April 2007 to the "Time 100," the newsmagazine's list of the 100 men and women whose power, talent or moral example is transforming the world. He is Editor-in-Chief of Wired magazine, a position he took in 2001, and he has led the magazine to six National Magazine Award nominations, winning the prestigious top prize for General Excellence in 2005 and 2007. He is the author of the New York Times best-seller The Long Tail, which is based on an influential 2004 article published in Wired, and runs a blog on the subject at www.thelongtail.com. Previously, he was at The Economist, where he served as US Business Editor, Asia Business Editor; and Technology Editor. He started The Economist's Internet coverage in 1994 and directed its initial web strategy. Anderson's media career began at the two premier science journals, Nature and Science, where he served in several editorial capacities. Prior to that he was a physics researcher at the Los Alamos National Lab."
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December 19, 2013
Goodreads says that I'm "finished with Free", but I disagree. I love Free, and while listening to this audiobook (which was free), I was surprised by how much Free I'd taken advantage of in my life without even giving it a thought.
Chris Anderson says that my generation inherently understands (and to a point, expects) Free, and I'm proof of that. Hotmail, Yahoo!, Google, oh my! The internet is like the Free capital of the universe. I've never given a single thought to how these companies could give away their products for free. I have thought about it in regards to the site I'm currently on, though. (That'd be Goodreads.com, for those of you lost on the internet right now. Take the next left at the Grumpy Cat image and then straight on through the XKCD gateway, and you'll find your way home.) I've often said that I would gladly pay a yearly fee (or even donate) to keep the site independent. Ad-free would be nice, too, but whatevs.
Then there's LibraryThing, which is a "Freemium" model. It's free up to the first 200 books you add on the site, and then you have to pay.
I'd used LT before finding GR, and once I found GR, it was all over but the cryin' (as the saying goes) for LT. I did go back very briefly, but the site just doesn't compare. And you can't beat free.
Though even if GR wasn't free, at this point, I'd likely STILL stay, because now I'm hooked. I'm invested in the site... which is a tactic that is also used in Free. Give people a trial so they can see how great your service is, and they'll want to stay even though they have to pay for it.
There's a lot of great info in this book that I'd never thought about, and I was actually surprised at how much Free plays into capitalism. It was fascinating to see the ways in which Free interacts with paid, supplementing and encouraging business innovation and growth.
I appreciated how easy this was to listen to and that it was engaging and entertaining at the same time. A little repetitive at times, but that's to be expected. I also appreciated how even-handed it was. Anderson laid out the pros and cons of Free, including piracy, and how it can be both a positive and a negative force in business, while keeping his own personal opinions about the ethics out of it.
Overall, I quite enjoyed this, and I am glad that I found it at random on Audible. I like random books, but I love random FREE books. :D
Chris Anderson says that my generation inherently understands (and to a point, expects) Free, and I'm proof of that. Hotmail, Yahoo!, Google, oh my! The internet is like the Free capital of the universe. I've never given a single thought to how these companies could give away their products for free. I have thought about it in regards to the site I'm currently on, though. (That'd be Goodreads.com, for those of you lost on the internet right now. Take the next left at the Grumpy Cat image and then straight on through the XKCD gateway, and you'll find your way home.) I've often said that I would gladly pay a yearly fee (or even donate) to keep the site independent. Ad-free would be nice, too, but whatevs.
Then there's LibraryThing, which is a "Freemium" model. It's free up to the first 200 books you add on the site, and then you have to pay.
I'd used LT before finding GR, and once I found GR, it was all over but the cryin' (as the saying goes) for LT. I did go back very briefly, but the site just doesn't compare. And you can't beat free.
Though even if GR wasn't free, at this point, I'd likely STILL stay, because now I'm hooked. I'm invested in the site... which is a tactic that is also used in Free. Give people a trial so they can see how great your service is, and they'll want to stay even though they have to pay for it.
There's a lot of great info in this book that I'd never thought about, and I was actually surprised at how much Free plays into capitalism. It was fascinating to see the ways in which Free interacts with paid, supplementing and encouraging business innovation and growth.
I appreciated how easy this was to listen to and that it was engaging and entertaining at the same time. A little repetitive at times, but that's to be expected. I also appreciated how even-handed it was. Anderson laid out the pros and cons of Free, including piracy, and how it can be both a positive and a negative force in business, while keeping his own personal opinions about the ethics out of it.
Overall, I quite enjoyed this, and I am glad that I found it at random on Audible. I like random books, but I love random FREE books. :D
November 15, 2014
Disclaimer: I won a free copy of this book from Goodreads First Reads.
Free is a pretty comprehensive overview of the free business model. Anderson first outlines the history of free, the economic and psychological reasons behind free, the reason that free can exist in today's digital world, and the ways it differs from so-called "20th century free."
Anderson's points are well made, complete, and interesting to read. However, I do believe that he ignores and/or understates the full implications of free.
He briefly touches on the point that free is not possible without abundance, and that abundance usually comes with a cost. In chapter 15 Anderson uses Athens and Sparta as examples of two civilizations of abundance, mentioning in passing that they were "[s:]upported by massive populations of slaves".
Abundance never comes without a cost, whether it be environmental or social, and abundance never comes without cheap or free labor. American abundance would not have come about without slavery, and today abundance would not be possible without so-called wage slavery. Simply put, if people did not have to work in order to eat and house themselves, most probably wouldn't, and with good reason.
Anderson also seems to think that "waste," (which he always uses in scare quotes) which humans are trained to think of as a bad thing, as a byproduct of abundance is not inherently bad. Waste is why billions of plastic bottles and plastic bags (among countless other disposable things) are thrown away and wind up poisoning our environment and oceans. Waste comes from mountaintop extraction, which brings us cheap coal-powered electricity, and leads to loss of ecosystems, polluted waterways and displaced communities. Waste comes from the wars overseas that keep people in the US knee deep in oil. I don't know how anybody can put such blinders on and say that waste is okay because it gives us free information online.
That nothing comes without a cost is an idea that Anderson tries to debunk, but I can hardly agree with that statement. Industrial pollutants are created in abundance because of the semiconductor industry. While transistors may be made of "sand" (Silicon), Anderson clearly has no idea that Silicon processing uses among the most toxic chemicals ever invented. Silane gas, arsenic gas, hydrofluoric acid, to name just three. The overabundance of cheap electronic gadgets and computers leads to computer waste that is discarded overseas and leads to health problems (and death) in third world countries. The information that I can easily access online for free would not exist without these costs. Just because I am not paying them does not mean they don't exist.
Anderson also seems to believe that technology will eventually solve all of our problems, and that there is no limit to human ingenuity. I find this position to be naive and ignorant of what really drives abundance, which is global capitalism. Perhaps problems will be solved, but only for those with enough money to pay for it.
For example, Anderson holds high hopes that biofuels could be used as a source of free electricity. Aside from the fact that biofuels take away land for food production to make cheap electricity for the rich, growing enough corn to satisfy 100% of the electricity demand in the United States would consume 37% of all of the landmass of the United States. Obviously this is not the last bit realistic.
In summary, I find this book to be somewhat sensationalist without being realistic. While I can't deny that the Internet provides vast resources of information for, as far as my wallet is concerned, little to no cost, I simply can't deny that it comes without any cost whatsoever. Anderson paints a very myopic picture of the wonders of free technology without looking at the larger implications (or completely ignores that they exist).
Free is a pretty comprehensive overview of the free business model. Anderson first outlines the history of free, the economic and psychological reasons behind free, the reason that free can exist in today's digital world, and the ways it differs from so-called "20th century free."
Anderson's points are well made, complete, and interesting to read. However, I do believe that he ignores and/or understates the full implications of free.
He briefly touches on the point that free is not possible without abundance, and that abundance usually comes with a cost. In chapter 15 Anderson uses Athens and Sparta as examples of two civilizations of abundance, mentioning in passing that they were "[s:]upported by massive populations of slaves".
Abundance never comes without a cost, whether it be environmental or social, and abundance never comes without cheap or free labor. American abundance would not have come about without slavery, and today abundance would not be possible without so-called wage slavery. Simply put, if people did not have to work in order to eat and house themselves, most probably wouldn't, and with good reason.
Anderson also seems to think that "waste," (which he always uses in scare quotes) which humans are trained to think of as a bad thing, as a byproduct of abundance is not inherently bad. Waste is why billions of plastic bottles and plastic bags (among countless other disposable things) are thrown away and wind up poisoning our environment and oceans. Waste comes from mountaintop extraction, which brings us cheap coal-powered electricity, and leads to loss of ecosystems, polluted waterways and displaced communities. Waste comes from the wars overseas that keep people in the US knee deep in oil. I don't know how anybody can put such blinders on and say that waste is okay because it gives us free information online.
That nothing comes without a cost is an idea that Anderson tries to debunk, but I can hardly agree with that statement. Industrial pollutants are created in abundance because of the semiconductor industry. While transistors may be made of "sand" (Silicon), Anderson clearly has no idea that Silicon processing uses among the most toxic chemicals ever invented. Silane gas, arsenic gas, hydrofluoric acid, to name just three. The overabundance of cheap electronic gadgets and computers leads to computer waste that is discarded overseas and leads to health problems (and death) in third world countries. The information that I can easily access online for free would not exist without these costs. Just because I am not paying them does not mean they don't exist.
Anderson also seems to believe that technology will eventually solve all of our problems, and that there is no limit to human ingenuity. I find this position to be naive and ignorant of what really drives abundance, which is global capitalism. Perhaps problems will be solved, but only for those with enough money to pay for it.
For example, Anderson holds high hopes that biofuels could be used as a source of free electricity. Aside from the fact that biofuels take away land for food production to make cheap electricity for the rich, growing enough corn to satisfy 100% of the electricity demand in the United States would consume 37% of all of the landmass of the United States. Obviously this is not the last bit realistic.
In summary, I find this book to be somewhat sensationalist without being realistic. While I can't deny that the Internet provides vast resources of information for, as far as my wallet is concerned, little to no cost, I simply can't deny that it comes without any cost whatsoever. Anderson paints a very myopic picture of the wonders of free technology without looking at the larger implications (or completely ignores that they exist).
July 20, 2009
A business classic that everyone should read. Explains 20th century and 21st century economics from a big picture perspective. The basic thesis is that while in the physical world (atoms), products have cost and thus companies can afford to give away small amounts of free samples (5%), or give away cheaper loss-leader related products in order to maintain profits. In the digital world things are reversed as products have little to no marginal cost and companies can afford to give away 95% of the product for free and make money on the remaining 5%.
My Notes
* For physical products free is a marketing tactic. Give away one product to make money on another (cell phones to sell plans, razor blades to sell razors, jello cookbooks to sell jello, etc). This is the concept of a "loss-leader", and is the basis of much of 20th century marketing.
* Value psychology: things that were once paid have a difficult time going free because people think it must not be as valuable anymore. Things that have always been free can still have a high perceived value.
* The Penny-gap: The psychology of a free product versus that of a product costing even one cent is huge. Koppelman says many businesses can't make the leap. Study where truffle is $.15 and kiss is $.01 and 70% choose the truffle, then reduced to .14 and free and now 70% choose the kiss. Free is disposable so we can't make a bad decision by choosing it - it's a psychological thing.
* Products in a truly competitive market tend to fall to the marginal cost. A true competitive market was mostly an economic theory as most real economies have inefficiencies (the products are somehow differentiated). However with digital economies we finally have true competitive markets, with marginal costs so close to zero that it's often rounded down.
* Reputation and attention economies are other important things that motivate people. Time is money! People will pay for status or to save time in a game, even if they wouldn't pay for the entire thing. There has been an explosion in gaming lately as games become free to play then charge as people play (Habbo Hotel, WOW, Puzzle Pirates, Second Life, Club Pengiun, Runescape, etc)
* Giving away your product for free or allowing piracy can be a good thing if you can figure out how to make money from the attention you get as a result. Microsoft would rather people be using pirated versions of Windows & Office than be using a competitor - it establishes them as the market leader and leads to more sales. Bands in China and Brazil give away as many free copies of their album in towns they visit as possible to get everyone to buy a ticket to their concert.
* Google is the best example of the above. They make so much on advertising from their main product (search + advertising), that they can afford to hire thousands of engineers to work on dozens and dozens of quality products that don't need to make money, they just need to establish Google more as a brand people use (gmail, google docs, google calendar, google apps, youtube, blogger, google analytics, google ad manager, and many more)
I was also fortunate enough to interview Chris Anderson about this book: check it out here.
My Notes
* For physical products free is a marketing tactic. Give away one product to make money on another (cell phones to sell plans, razor blades to sell razors, jello cookbooks to sell jello, etc). This is the concept of a "loss-leader", and is the basis of much of 20th century marketing.
* Value psychology: things that were once paid have a difficult time going free because people think it must not be as valuable anymore. Things that have always been free can still have a high perceived value.
* The Penny-gap: The psychology of a free product versus that of a product costing even one cent is huge. Koppelman says many businesses can't make the leap. Study where truffle is $.15 and kiss is $.01 and 70% choose the truffle, then reduced to .14 and free and now 70% choose the kiss. Free is disposable so we can't make a bad decision by choosing it - it's a psychological thing.
* Products in a truly competitive market tend to fall to the marginal cost. A true competitive market was mostly an economic theory as most real economies have inefficiencies (the products are somehow differentiated). However with digital economies we finally have true competitive markets, with marginal costs so close to zero that it's often rounded down.
* Reputation and attention economies are other important things that motivate people. Time is money! People will pay for status or to save time in a game, even if they wouldn't pay for the entire thing. There has been an explosion in gaming lately as games become free to play then charge as people play (Habbo Hotel, WOW, Puzzle Pirates, Second Life, Club Pengiun, Runescape, etc)
* Giving away your product for free or allowing piracy can be a good thing if you can figure out how to make money from the attention you get as a result. Microsoft would rather people be using pirated versions of Windows & Office than be using a competitor - it establishes them as the market leader and leads to more sales. Bands in China and Brazil give away as many free copies of their album in towns they visit as possible to get everyone to buy a ticket to their concert.
* Google is the best example of the above. They make so much on advertising from their main product (search + advertising), that they can afford to hire thousands of engineers to work on dozens and dozens of quality products that don't need to make money, they just need to establish Google more as a brand people use (gmail, google docs, google calendar, google apps, youtube, blogger, google analytics, google ad manager, and many more)
I was also fortunate enough to interview Chris Anderson about this book: check it out here.
November 16, 2013
In Free: The Future of a Radical Price Anderson insists that the way to profit online is to give products away. Of course, the intent of such a proclamation is to startle people unfamiliar with online dynamics -- which makes you wonder what tiny portion of his audience is actually startled. Even people from established industries such as newspapers and network television already know that their products only *appeared* to be free or nearly free to the consuming public. Their product certainly didn't appear to be free to advertisers. And if they didn't know that or recognize the significance, then they surely know it now.
Anderson acknowledges that "Free" (yes, he capitalizes it throughout the book) isn't really free and it is not really new, but then says to his reader that he's still going to call it Free-- as well as new and radical -- anyway. So, what are the ostensibly new, free business models?
* Direct Cross-Subsidies: buy one can of soup, get one can of soup free; get a free razor, pay for the razor blades; get a free phone with your lifetime phone plan.
* Three-Party Market: Also known as advertising. The 50 ct daily newspaper isn't completely free, although the alternative weekly or daily often is. The 50 cent cost of the daily, though, never sustained the true costs of producing the paper. So what does? The advertisers. It's true, a lot of consumers don't think like that. When they get their Redbook magazine subscription for $15, they're not really thinking about the advertising. But surely, Redbook's business stakeholders *are* thinking about advertising -- and always have been.
* Freemiums: this is a business-model that is, indeed, more well-known online. A version of it can be seen when you get a weekly paper free at the newstand, but pay for it's delivery to your doorstep. Another version is free tickets for students, but paid tickets for the employed. It's an old model, it's just exploited far more online.
How does free work online? You get a stripped down version for free, but if you want more features, then you pay. The classic example is Flickr. The principle of the longtail pulls in thousands of users who would never pay even $25/yr to upload photos. The more hardcore photographers -- remember, a group that has grown manifold with the introduction of digital cameras -- are the people will feel constrained by the limitations of a free Flickr account. Hence, they pony up for more features. Flickr is free to cheapskates, comes at a very affordable price to power users.
Anderson exclaims that Flickr "doesn't even use advertising." But this isn't exactly true. Anderson appears to have been blinded by the very circuitous path to payment that is actually part of the psychology of free. It's not just that power users are paying for premium accounts, subsidizing the cheapskates. Flickr is also supported by advertising. How? When a user uploads a photo, information is pulled out of the EXIF data embedded in digital images. That data is used to create a link to the camera she used to take the photo. That link to, say, a Canon camera goes to a product listing page. When you click another link to find out more details or read reviews, you end up at Yahoo's shopping pages. Voila! Guess who's paying? Advertisers. Yahoo owns Flickr, and it owns it in order to drive consumers to its shopping pages where they present millions of eyeballs to advertisers.
Flick is both a Freemium model *and* a Three-Party Marketing model. Flickr *is* supported by advertising, it's just not an obviously direct path.
Thus, the biggest take-away for business developers and executives is that circuitous is the word of the day. Someone really is paying, and may be paying a great deal; the path to that payment is circuitous. Making money in such an environment requires a lot more creativity and not just a steel constitution, but a titanium one. The titanium constitution would be necessary for managing the psychological stress and risks involved in cooly calculating that such circuitous paths will not only make money, but won't be a nightmare to manage in terms of being able to monitor whether your gamble is truly paying off.
* * NonMonetary Markets: Anderson's favorite example of a nonmonetary market is Wikipedia. The claim is that the nonmonetary economy works according to altruism. He isn't persuasive at all. For instance, Anderson's other examples make it clear that altruism isn't operative. You exchange your labor for access - to get something, not out of the goodness of your heart. Google gives away its 411 service in order to gain access to your labor: you are giving Google data which will help them improve their voice recognition service. It's "free" only because the psychology of free works on you - and quite well on Anderson as well. Google expects to make money *later*. It's using your free labor, so it doesn't have to pay people now, to make money later.
As I mentioned above, anyone making decisions about long-term strategies like this is going to need a titanium constitution.
As you can see, though, there's nothing new or free about these models. Someone is paying, somewhere, somehow. What might be new is that the path to payment is more circuitous. But I don't think that's true either. Have you ever wondered how Reader's Digest Sweepstakes makes money? Well, it certainly isn't just because it's a marketing gimmick to increase subscriptions. That's part of it, but that's a lot of effort to go through, just to get more eyeballs to their pages so those eyeballs can read advertisements.
Reader's Digest is also collecting data. Sure, there's the obvious marketing and demographic data. If you buy a Redbook subscription are you also the kind of person who also orders a Sports Illustrated?
That's always good information if you're a business product developer, a marekter, etc. But more, Reader's Digest historically created what was called the 'Sucker List.' If you don't respond to their tempting million dollar sweepstakes, you're not much of a sucker. Valuable data: you're not worth the time of companies that need you to be a little bit of a sucker in order to buy their products. If you haphazardly and quickly fill out their sweepstakes form without buying a sub -- remember, no sub required! -- then you are a bit more of a sucker. They also know you're quick to make decisions. Perhaps even spontaneous. If you wait on the decision but eventuallyl enter without buying a subscription, you're not quite as quick and freewheeling as others. If you fill out the sweepstakes and buy a subscription because somehow you imagine this will increase your chances at winning, you're a bigger suckers than people who don't buy a sub. If you buy multiple subscriptions, you're a bigger suckers. If you keep filling out the sweepstakes and keep ordering subscriptions as you go through the sweeps process, you're yet another level of sucker. And so forth.
All of this is valuable information. Your name goes on the sucker list and those lists are sold depending on the suckers a company wants to target. Spammers do something similar when they track who opens the mail, who opens and clicks a link, who tries to use a link in the email to unsubscribe, and so forth. People who are responsive to spam by opening it to begin with are more valuable than people who never open it at all. The list of those kinds of email addresses is more valuable to spammers.
Is there anything new about what Anderson describes in his book? Well, Anderson wants you to think so, but I don't think he's persuasive. Anyone with a little bit of business acumen and time to reflect on their business models, already knows about freemiums and three-party marketing models. It's a useful book if FUD -- Fear, Uncertainty, and Doubt -- has infected your C-level execs. That is, you can use it to help you walk your FUD-infected execs through the various models, identify them with some useful keywords, and assure them that there's no new and scary here at all.
The book is also useful to put you in touch with a brief overview of the psychology of free. This is probably the most important thing business developers need to understand today: why does (not really) free work, why do people think they're getting something for free or at a bargain when they're not, and how can we exploit that to create products and services that make profits? How can we get people to do work for us (exchange their labor for something we give them for free) without them realizing or caring that they are giving away their labor-time and we are making a profit? It worked before the Web, too: gas stations and fastfood restaurants do it when you pump your own gas and draw your own soft drinks.
As I said a couple of years ago: Web 2.0 is really just Tupperware 2.0. The longtail was in effect with models such as Tupperware and Avon. Those business models are still around, and they only fell out of favor as the companies struggled to deal with the loss of their nearly "free" labor: housewives. Why? Because the labor they used to exploit the longtail, homemakers, went away as women entered the labor market in droves. Avon floundered for awhile as it figured out how to take advantage of working women instead of relying on homemakers who wanted to make extra money. Now, it targets working women who need to supplement their incomes.
The longtail was never new. What was possibly new was that the capital costs required to launch such a venture has dropped significantly. Similarly, Free isn't new either.
In sum: Free? Nothing is free. It really isn't. In a capitalist market economy, someone is paying. Even so, I'd recommend you check this book from the library. It'll be free. Naw. The books are paid for by taxes. So, read this book to understand the rhetoric and psychology of free. Once you understand how we are tricked into thinking things are free, you too will be able to exploit that psychology for fun and profit!
Anderson acknowledges that "Free" (yes, he capitalizes it throughout the book) isn't really free and it is not really new, but then says to his reader that he's still going to call it Free-- as well as new and radical -- anyway. So, what are the ostensibly new, free business models?
* Direct Cross-Subsidies: buy one can of soup, get one can of soup free; get a free razor, pay for the razor blades; get a free phone with your lifetime phone plan.
* Three-Party Market: Also known as advertising. The 50 ct daily newspaper isn't completely free, although the alternative weekly or daily often is. The 50 cent cost of the daily, though, never sustained the true costs of producing the paper. So what does? The advertisers. It's true, a lot of consumers don't think like that. When they get their Redbook magazine subscription for $15, they're not really thinking about the advertising. But surely, Redbook's business stakeholders *are* thinking about advertising -- and always have been.
* Freemiums: this is a business-model that is, indeed, more well-known online. A version of it can be seen when you get a weekly paper free at the newstand, but pay for it's delivery to your doorstep. Another version is free tickets for students, but paid tickets for the employed. It's an old model, it's just exploited far more online.
How does free work online? You get a stripped down version for free, but if you want more features, then you pay. The classic example is Flickr. The principle of the longtail pulls in thousands of users who would never pay even $25/yr to upload photos. The more hardcore photographers -- remember, a group that has grown manifold with the introduction of digital cameras -- are the people will feel constrained by the limitations of a free Flickr account. Hence, they pony up for more features. Flickr is free to cheapskates, comes at a very affordable price to power users.
Anderson exclaims that Flickr "doesn't even use advertising." But this isn't exactly true. Anderson appears to have been blinded by the very circuitous path to payment that is actually part of the psychology of free. It's not just that power users are paying for premium accounts, subsidizing the cheapskates. Flickr is also supported by advertising. How? When a user uploads a photo, information is pulled out of the EXIF data embedded in digital images. That data is used to create a link to the camera she used to take the photo. That link to, say, a Canon camera goes to a product listing page. When you click another link to find out more details or read reviews, you end up at Yahoo's shopping pages. Voila! Guess who's paying? Advertisers. Yahoo owns Flickr, and it owns it in order to drive consumers to its shopping pages where they present millions of eyeballs to advertisers.
Flick is both a Freemium model *and* a Three-Party Marketing model. Flickr *is* supported by advertising, it's just not an obviously direct path.
Thus, the biggest take-away for business developers and executives is that circuitous is the word of the day. Someone really is paying, and may be paying a great deal; the path to that payment is circuitous. Making money in such an environment requires a lot more creativity and not just a steel constitution, but a titanium one. The titanium constitution would be necessary for managing the psychological stress and risks involved in cooly calculating that such circuitous paths will not only make money, but won't be a nightmare to manage in terms of being able to monitor whether your gamble is truly paying off.
* * NonMonetary Markets: Anderson's favorite example of a nonmonetary market is Wikipedia. The claim is that the nonmonetary economy works according to altruism. He isn't persuasive at all. For instance, Anderson's other examples make it clear that altruism isn't operative. You exchange your labor for access - to get something, not out of the goodness of your heart. Google gives away its 411 service in order to gain access to your labor: you are giving Google data which will help them improve their voice recognition service. It's "free" only because the psychology of free works on you - and quite well on Anderson as well. Google expects to make money *later*. It's using your free labor, so it doesn't have to pay people now, to make money later.
As I mentioned above, anyone making decisions about long-term strategies like this is going to need a titanium constitution.
As you can see, though, there's nothing new or free about these models. Someone is paying, somewhere, somehow. What might be new is that the path to payment is more circuitous. But I don't think that's true either. Have you ever wondered how Reader's Digest Sweepstakes makes money? Well, it certainly isn't just because it's a marketing gimmick to increase subscriptions. That's part of it, but that's a lot of effort to go through, just to get more eyeballs to their pages so those eyeballs can read advertisements.
Reader's Digest is also collecting data. Sure, there's the obvious marketing and demographic data. If you buy a Redbook subscription are you also the kind of person who also orders a Sports Illustrated?
That's always good information if you're a business product developer, a marekter, etc. But more, Reader's Digest historically created what was called the 'Sucker List.' If you don't respond to their tempting million dollar sweepstakes, you're not much of a sucker. Valuable data: you're not worth the time of companies that need you to be a little bit of a sucker in order to buy their products. If you haphazardly and quickly fill out their sweepstakes form without buying a sub -- remember, no sub required! -- then you are a bit more of a sucker. They also know you're quick to make decisions. Perhaps even spontaneous. If you wait on the decision but eventuallyl enter without buying a subscription, you're not quite as quick and freewheeling as others. If you fill out the sweepstakes and buy a subscription because somehow you imagine this will increase your chances at winning, you're a bigger suckers than people who don't buy a sub. If you buy multiple subscriptions, you're a bigger suckers. If you keep filling out the sweepstakes and keep ordering subscriptions as you go through the sweeps process, you're yet another level of sucker. And so forth.
All of this is valuable information. Your name goes on the sucker list and those lists are sold depending on the suckers a company wants to target. Spammers do something similar when they track who opens the mail, who opens and clicks a link, who tries to use a link in the email to unsubscribe, and so forth. People who are responsive to spam by opening it to begin with are more valuable than people who never open it at all. The list of those kinds of email addresses is more valuable to spammers.
Is there anything new about what Anderson describes in his book? Well, Anderson wants you to think so, but I don't think he's persuasive. Anyone with a little bit of business acumen and time to reflect on their business models, already knows about freemiums and three-party marketing models. It's a useful book if FUD -- Fear, Uncertainty, and Doubt -- has infected your C-level execs. That is, you can use it to help you walk your FUD-infected execs through the various models, identify them with some useful keywords, and assure them that there's no new and scary here at all.
The book is also useful to put you in touch with a brief overview of the psychology of free. This is probably the most important thing business developers need to understand today: why does (not really) free work, why do people think they're getting something for free or at a bargain when they're not, and how can we exploit that to create products and services that make profits? How can we get people to do work for us (exchange their labor for something we give them for free) without them realizing or caring that they are giving away their labor-time and we are making a profit? It worked before the Web, too: gas stations and fastfood restaurants do it when you pump your own gas and draw your own soft drinks.
As I said a couple of years ago: Web 2.0 is really just Tupperware 2.0. The longtail was in effect with models such as Tupperware and Avon. Those business models are still around, and they only fell out of favor as the companies struggled to deal with the loss of their nearly "free" labor: housewives. Why? Because the labor they used to exploit the longtail, homemakers, went away as women entered the labor market in droves. Avon floundered for awhile as it figured out how to take advantage of working women instead of relying on homemakers who wanted to make extra money. Now, it targets working women who need to supplement their incomes.
The longtail was never new. What was possibly new was that the capital costs required to launch such a venture has dropped significantly. Similarly, Free isn't new either.
In sum: Free? Nothing is free. It really isn't. In a capitalist market economy, someone is paying. Even so, I'd recommend you check this book from the library. It'll be free. Naw. The books are paid for by taxes. So, read this book to understand the rhetoric and psychology of free. Once you understand how we are tricked into thinking things are free, you too will be able to exploit that psychology for fun and profit!
January 5, 2022
This book was written during the initial years of the Social Media/Apps boom when people hadn't gotten used to the idea of being the product themselves (i.e. their data being sold to the highest bidders).
While everyone gleefully lapped up the 'free' services offered by the Apps, Chris was one of the first popular writers to ominously predict what would happen when we ourselves became the product.
Must read for all 21st Century Internet users.
While everyone gleefully lapped up the 'free' services offered by the Apps, Chris was one of the first popular writers to ominously predict what would happen when we ourselves became the product.
Must read for all 21st Century Internet users.
April 22, 2010
At the beginning of Free, Chris Anderson presents a generalized dichotomy toward "Free." Some—mostly the older users—are suspicious of Free and insist they will have to pay somewhere down the line. Many younger users, on the other hand, think that Free, on the Internet at least, is a truism. Anderson says his goal is to convince us that neither camp has it completely right and that the truth lies somewhere in the middle.
This is an attitude that we can apply to the Internet in general. As newspapers and record labels have found, approaching the Internet like it's another form of print doesn't work. The rules are different, and in that respect, the Internet is a game-changer. Yet the difficulties the Internet presents us are not all new and unique to that medium, and this is not the first Free crisis in history. Indeed, the most important thing I learned from Free can be expressed as another truism: the more things change, the more they stay the same.
Let's level for a moment and crowd onto the same page (or pixel): this is popular economics. Anderson is a businessman, so he knows his economics, but he's chosen to distill it in an accessible way that isn't always rigorous, favouring the simple explanation over complicated economic theory. As someone who is intelligent about most things but stupid when it comes to economics, I'm glad he did that. Had he chosen otherwise, I would not have read this book. But if you're looking for a textbook on economic theory, you'll be disappointed. This book has no bibliography (which actually surprised me) and very few footnotes. That being said, Anderson treats his topic with the nuance and subtlety it deserves.
Free offers a granular analysis of exactly what types of Free economies you'll find, both offline and online. There's freemium, gift economies, cross-subsidies, etc. Sometimes it gets a little technical, but what matters is that Anderson is unambiguous in his division of the Free world; not all Free is created equal, and he shows us examples of each case. Moreover, he stresses that the idea of Free as a marketing tactic is far from new.
What the Internet changes about Free is that it drives marginal costs for the producer to zero. Microprocessor production has become so efficient that microchips are essentially "too cheap to meter," as Anderson puts it, which means that bits, unlike atoms, are in abundant supply. In the physical world, Anderson has to make tough decisions about which articles get the finite and valuable page space in Wired. Online, he can allocate as much space as his content creators need. That is the almost science fictional difference provided by the Internet, and if you wrap your head around this key point, you're well on your way to understanding Free.
The paradigm case for Free online services is, of course, Google. Anderson spends a lot of time discussing Google (although not as much as one might think), and he also looks at how other companies have used Free to compete with Google. In particular, he presented a brief case study on how Yahoo! prepared for the competition of Gmail in 2004 by introducing unlimited email storage (as compared to Gmail's 1 GB and increasing email storage). I liked this example, because it belies the critics of Free who claim that it will somehow eradicate capitalism and no one will make money any more. Google's profits show that those who embrace Free instead of viewing it as a threat can still be successful.
Free's value to the average reader comes in the connections it makes between practice and business. I know that Google gave away most of its services for free because it made money off ads. I also know that Google collects an amazing amount of data about people, companies, and websites as we browse the Web. Yet I didn't consciously connect these two and realize that one reason Google makes its services free is to facilitate data collection. It sounds sinister (and certainly has that potential), but it's also brilliant. Anderson's example is Google's 411 service, which was free of charge. Google didn't stand to make much money from that service if it did charge; by giving it away for free, it acquired voice data for use in its voice search and recognition algorithms. For businesses, this is another example of how Free can be better in the long-term. For readers, it raises awareness of the motives a company has behind its offerings of Free. In both cases, the message is the same: Free can sometimes be the most beneficial path for a company to pursue.
From Gillette to Jell-O, Anderson has enough anecdotes of companies creating successful products (or in some cases, entirely new markets) with a Free strategy. Aside from showing that Free works, these examples are valuable because they considerably pre-date the Internet, and they demonstrate that the phantom of Free has lingered over our economy for a long time.
Newspapers decry the availability of free news online; music labels complain about piracy. We're seeing pressure on governments to regulate and legislate these companies back into profitable business models. This is somewhat ironic, since if these companies really believed in a free market (small F, note), they should be changing those models, not asking for a rule change. It's important to recall, however, that this situation is not new. Lawrence Lessig points this out in Remix , and Anderson reiterates it in Free. New technology has always presented challenges to incumbent businesses:
Does that sound familiar? "Who is to pay for music downloads and how?" "Who is to pay for ebooks and how?" The technology and the content might have changed, but the question remains the same: who's going to pay? Radio did find a solution—advertising—but then when it became viable to play recorded music over the radio, this triggered another crisis in revenue for recording artists. So the cycle began again.
We found solutions to those crises. So why are people so doubtful that we'll find solutions to the current crisis? Maybe I'm just not being empathetic enough for the poor newspapers and recording labels. Yet I can't help but think that trying to legislate a way toward a static situation in the face of changing technology is a losing endeavour. Best to adapt now, get ahead of the curve, and be the trend-setter.
So in case you can't tell, I liked Free. It was accessible, but not over-bearing, in its analysis of the Free economies. Although "Free" may be a radical price, this is not a radical book; it offers sound advice that can probably be repackaged as common sense. Even if you aren't planning to start your own business any time soon, I would still recommend this book to you, for the simple reason that it raises awareness of how companies use Free to make money. And when companies make money, the older generation is right: someone pays, somewhere. But the Internet has changed that too, because more than ever, consumers interact with companies on a very personal level. So it behoves you to know where the money's going (and whence it comes). Read Free, be savvy.
This is an attitude that we can apply to the Internet in general. As newspapers and record labels have found, approaching the Internet like it's another form of print doesn't work. The rules are different, and in that respect, the Internet is a game-changer. Yet the difficulties the Internet presents us are not all new and unique to that medium, and this is not the first Free crisis in history. Indeed, the most important thing I learned from Free can be expressed as another truism: the more things change, the more they stay the same.
Let's level for a moment and crowd onto the same page (or pixel): this is popular economics. Anderson is a businessman, so he knows his economics, but he's chosen to distill it in an accessible way that isn't always rigorous, favouring the simple explanation over complicated economic theory. As someone who is intelligent about most things but stupid when it comes to economics, I'm glad he did that. Had he chosen otherwise, I would not have read this book. But if you're looking for a textbook on economic theory, you'll be disappointed. This book has no bibliography (which actually surprised me) and very few footnotes. That being said, Anderson treats his topic with the nuance and subtlety it deserves.
Free offers a granular analysis of exactly what types of Free economies you'll find, both offline and online. There's freemium, gift economies, cross-subsidies, etc. Sometimes it gets a little technical, but what matters is that Anderson is unambiguous in his division of the Free world; not all Free is created equal, and he shows us examples of each case. Moreover, he stresses that the idea of Free as a marketing tactic is far from new.
What the Internet changes about Free is that it drives marginal costs for the producer to zero. Microprocessor production has become so efficient that microchips are essentially "too cheap to meter," as Anderson puts it, which means that bits, unlike atoms, are in abundant supply. In the physical world, Anderson has to make tough decisions about which articles get the finite and valuable page space in Wired. Online, he can allocate as much space as his content creators need. That is the almost science fictional difference provided by the Internet, and if you wrap your head around this key point, you're well on your way to understanding Free.
The paradigm case for Free online services is, of course, Google. Anderson spends a lot of time discussing Google (although not as much as one might think), and he also looks at how other companies have used Free to compete with Google. In particular, he presented a brief case study on how Yahoo! prepared for the competition of Gmail in 2004 by introducing unlimited email storage (as compared to Gmail's 1 GB and increasing email storage). I liked this example, because it belies the critics of Free who claim that it will somehow eradicate capitalism and no one will make money any more. Google's profits show that those who embrace Free instead of viewing it as a threat can still be successful.
Free's value to the average reader comes in the connections it makes between practice and business. I know that Google gave away most of its services for free because it made money off ads. I also know that Google collects an amazing amount of data about people, companies, and websites as we browse the Web. Yet I didn't consciously connect these two and realize that one reason Google makes its services free is to facilitate data collection. It sounds sinister (and certainly has that potential), but it's also brilliant. Anderson's example is Google's 411 service, which was free of charge. Google didn't stand to make much money from that service if it did charge; by giving it away for free, it acquired voice data for use in its voice search and recognition algorithms. For businesses, this is another example of how Free can be better in the long-term. For readers, it raises awareness of the motives a company has behind its offerings of Free. In both cases, the message is the same: Free can sometimes be the most beneficial path for a company to pursue.
From Gillette to Jell-O, Anderson has enough anecdotes of companies creating successful products (or in some cases, entirely new markets) with a Free strategy. Aside from showing that Free works, these examples are valuable because they considerably pre-date the Internet, and they demonstrate that the phantom of Free has lingered over our economy for a long time.
Newspapers decry the availability of free news online; music labels complain about piracy. We're seeing pressure on governments to regulate and legislate these companies back into profitable business models. This is somewhat ironic, since if these companies really believed in a free market (small F, note), they should be changing those models, not asking for a rule change. It's important to recall, however, that this situation is not new. Lawrence Lessig points this out in Remix , and Anderson reiterates it in Free. New technology has always presented challenges to incumbent businesses:
Radio Broadcast magazine announced a contest for the best answer to the question "Who is to pay for broadcasting and how?" . . . The winning entry sought a tax on vacuum tubes as an "index of broadcast consumption." . . . There were some suggestions that advertising might be the answer, but it was by far from a popular solution. It seemed a shame to despoil this new medium with sponsored messages.
Does that sound familiar? "Who is to pay for music downloads and how?" "Who is to pay for ebooks and how?" The technology and the content might have changed, but the question remains the same: who's going to pay? Radio did find a solution—advertising—but then when it became viable to play recorded music over the radio, this triggered another crisis in revenue for recording artists. So the cycle began again.
We found solutions to those crises. So why are people so doubtful that we'll find solutions to the current crisis? Maybe I'm just not being empathetic enough for the poor newspapers and recording labels. Yet I can't help but think that trying to legislate a way toward a static situation in the face of changing technology is a losing endeavour. Best to adapt now, get ahead of the curve, and be the trend-setter.
So in case you can't tell, I liked Free. It was accessible, but not over-bearing, in its analysis of the Free economies. Although "Free" may be a radical price, this is not a radical book; it offers sound advice that can probably be repackaged as common sense. Even if you aren't planning to start your own business any time soon, I would still recommend this book to you, for the simple reason that it raises awareness of how companies use Free to make money. And when companies make money, the older generation is right: someone pays, somewhere. But the Internet has changed that too, because more than ever, consumers interact with companies on a very personal level. So it behoves you to know where the money's going (and whence it comes). Read Free, be savvy.
September 15, 2018
The gist of it is that the price of almost everything will gradually be driven towards being free (in its various forms). Considering this book was released in 2009, in the eight years since, we can already see how much of it turned out to be true. An informative read overall.
October 19, 2013
We've heard that information wants to be free. We're all for it as long as we are on the receiving rather than the giving end. The value of Chris Anderson's work is in showing us exactly how "free" can work. It turns out it's not a new idea: think radio and television in the days of antennas. Most Google services are free (paid for by ads). On-line textbooks can be free by selling add-ons such as the right to print chapters, study guides, audio summaries of chapters, downloads to electronic book readers, etc. MIT's courses can be given away because you still can't buy the degree. On-line games can be free because 10% or so of users will ante-up for extras or premium versions that enhance the game experience. Free trial versions of software obviously rely on users buying the product after the trial. Put your book on-line for free and recoup your money on the lecture circuit and through consulting fees. If you're an unknown rock group, give away free CDs until you build your audience. If you're a known rock group, try giving away your songs on-line for free or for "whatever you think is fair" and you might average $6 a CD and still make a killing while you build up your concert tour audience. Give away the printer or the cellphone and make your money on ink cartridges and calling plans. Anderson, editor of Wired and former editor of US business for the Economist, catalogs a lot of good ideas and in the process convinces us that "Free" is here to stay.
April 12, 2017
Great Book !! I love the way that he explained things by using the concept of economics.
August 4, 2021
I thought this was a really illuminating audio-back as someone who works in the tech industry.
Meaning I understood many of the basic principles that make the software industry different from regular ones (zero marginal cost for software products) but I hadn't really grasped many of the economic implications.
It was cool learning about all the different marketing and monetizing strategies.
It's something that I had never really thought about.
Meaning I understood many of the basic principles that make the software industry different from regular ones (zero marginal cost for software products) but I hadn't really grasped many of the economic implications.
It was cool learning about all the different marketing and monetizing strategies.
It's something that I had never really thought about.
February 23, 2017
من أمتع الكتب التي قرأتها مؤخرًا، يتناول المؤلف مفهوم المجانية، كيف استخدم قديمًا في الترويج للمنتجات (من أبرز أمثلة ذلك العينات المجانية من أي منتج)، إلى أن وصل أن قامت عليه مباحث جديدة في علوم الاقتصاد Freeconomics وبنيت عليه كبرى شركات العالم التي تقدم جل خدماتها مجانًا مثل جوجل وفيسبوك ..الخ، وضرب فيه أمثلة غريبة على استخدام المجانية لدر أرباح مهولة، وعرج على المنظور السيكولوجي لتقبل النفس لمفهوم المجانية ورد فعلها تجاهه.
وكيف أن استخدام المجانية صار حتميًا في حالات تنافس تجارية عديدة.
يقدم الكتاب تجارب اقتصادية بارعة، وتأريخًا سريعًا لفلسفة الاقتصاد تجاه مفهوم المجانية،وإجابة عن كثير من الأسئلة والشكوك المطروحة حولها، كذلك شرح كيف تقدم بعض شركات الطيران رحلات مجانية، وكيف تقدم شركات الأجهزة كاميرات فيديو مجانية (كيف تحصل الشركات ثمن هذه المنتجات)، وكيف يمكن لكتاب أن يكون مجانيًا، وقد جعل المؤلف الحصول على نسخة إلكترونية من هذا الكتاب متاحًا بالمجان، وقد فسر ذلك - من ضمن هذه النماذج - بانتشار اسم الكتاب وذيوع صيته مما يزيد الإقبال على محاضراته التي يلقيها - والتي يشتري جمهوره تذاكرها - وهو ما يكون استثمارًأ له.
وكيف أن استخدام المجانية صار حتميًا في حالات تنافس تجارية عديدة.
يقدم الكتاب تجارب اقتصادية بارعة، وتأريخًا سريعًا لفلسفة الاقتصاد تجاه مفهوم المجانية،وإجابة عن كثير من الأسئلة والشكوك المطروحة حولها، كذلك شرح كيف تقدم بعض شركات الطيران رحلات مجانية، وكيف تقدم شركات الأجهزة كاميرات فيديو مجانية (كيف تحصل الشركات ثمن هذه المنتجات)، وكيف يمكن لكتاب أن يكون مجانيًا، وقد جعل المؤلف الحصول على نسخة إلكترونية من هذا الكتاب متاحًا بالمجان، وقد فسر ذلك - من ضمن هذه النماذج - بانتشار اسم الكتاب وذيوع صيته مما يزيد الإقبال على محاضراته التي يلقيها - والتي يشتري جمهوره تذاكرها - وهو ما يكون استثمارًأ له.
August 19, 2009
A su favor es que es un libro entretenido, que se lee muy rápidamente, y que pone encima de la mesa un necesario debate sobre cómo las empresas deben empezar a redefinir sus modelos de negocio ante la inmensidad de contenidos libres y gratuitos que están disponibles en la Red.
En su contra, creo que es un libro con algunas contradicciones sorprendentes y demasiadas simplificaciones a la hora de argumentar y defender el modelo de gratuidad de los contenidos en Internet. Estas contradicciones hacen que la tesis del autor pierda credibilidad.
Creo que el autor confunde la puesta en marcha de estrategias de marketing y ventas basadas en contenidos gratuitos con la definición de modelos de negoci basados en la gratuidad. Chris Anderson defiende que el futuro de los negocios que utilicen Internet es ofrecer sus productos de forma gratuita. No crean que el autor plantea este modelo de negocio como una opción a considerar; su tesis indica que todas aquellas empresas que tengan como base Internet tendrán que optar por la gratuidad como única alternativa. Según el autor, Los creadores de contenidos en la Red -ya sean libros, noticias, música o cine, entre otros- deberán regalarlos en Internet y esperar obtener ingresos a través de la publicidad, patrocinios, intercambio de mano de obra, etc.
A lo largo de los últimos años hemos visto cómo el modelo de la gratuidad, que ha sido defendido interesadamente por algunas empresas y creadores de opinión, ha funcionado en unas pocas empresas, básicamente en buscadores y operadores de telefonía, mientras que la industria creadora de contenidos -ya sean medios de comunicación o editoriales- ha obtenido escasos retornos.
Creo que todas las personas que formamos parte de esta transformación digital, ya sean blogueros, evangelistas de la Web 2.0, emprendedores de la web social, docentes de escuelas de negocios o autores de libros, debemos ser más críticos y exigentes con los planteamientos de las personas que están definiendo directa o indirectamente el futuro de la sociedad digital.
No estoy hablando sobre si aciertan o no predecir el futuro, como economista tengo ya asumido que es una tarea imposible, más bien estoy señalando que debemos exigir a estos creadores de opinión una mayor coherencia en sus argumentaciones y en sus propias actuaciones. No pueden abogar por una cosa y luego hacer otra. Eso se llama incoherencia, ya sea en un mundo analógico o digital
En su contra, creo que es un libro con algunas contradicciones sorprendentes y demasiadas simplificaciones a la hora de argumentar y defender el modelo de gratuidad de los contenidos en Internet. Estas contradicciones hacen que la tesis del autor pierda credibilidad.
Creo que el autor confunde la puesta en marcha de estrategias de marketing y ventas basadas en contenidos gratuitos con la definición de modelos de negoci basados en la gratuidad. Chris Anderson defiende que el futuro de los negocios que utilicen Internet es ofrecer sus productos de forma gratuita. No crean que el autor plantea este modelo de negocio como una opción a considerar; su tesis indica que todas aquellas empresas que tengan como base Internet tendrán que optar por la gratuidad como única alternativa. Según el autor, Los creadores de contenidos en la Red -ya sean libros, noticias, música o cine, entre otros- deberán regalarlos en Internet y esperar obtener ingresos a través de la publicidad, patrocinios, intercambio de mano de obra, etc.
A lo largo de los últimos años hemos visto cómo el modelo de la gratuidad, que ha sido defendido interesadamente por algunas empresas y creadores de opinión, ha funcionado en unas pocas empresas, básicamente en buscadores y operadores de telefonía, mientras que la industria creadora de contenidos -ya sean medios de comunicación o editoriales- ha obtenido escasos retornos.
Creo que todas las personas que formamos parte de esta transformación digital, ya sean blogueros, evangelistas de la Web 2.0, emprendedores de la web social, docentes de escuelas de negocios o autores de libros, debemos ser más críticos y exigentes con los planteamientos de las personas que están definiendo directa o indirectamente el futuro de la sociedad digital.
No estoy hablando sobre si aciertan o no predecir el futuro, como economista tengo ya asumido que es una tarea imposible, más bien estoy señalando que debemos exigir a estos creadores de opinión una mayor coherencia en sus argumentaciones y en sus propias actuaciones. No pueden abogar por una cosa y luego hacer otra. Eso se llama incoherencia, ya sea en un mundo analógico o digital
September 8, 2009
I read this book primarily because it was, well, free, and because Chris Anderson is a well known author due to The Long Tail (which I never read but heard a lot about). In the introduction he describes how as he researched the book he encountered two different reactions to it - the younger crowd (under-30 I think it was) thought that the ideas were basically self-evident while the older crowd thought that there was no such thing as free and that there is no way you could build a business model on giving things away.
I'm no longer under 30 but I guess am close enough to it and involved enough in technology that the ideas in this book were to me of the self-evident variety. There was nothing in here that I hadn't read about before or seen in practice somewhere. It's a useful read for people curious about how business models can in fact be built on free, and a good book for people who badly misunderstand the whole "information wants to be free" slogan - Anderson does a good job communicating his ideas in an understandable way. But for the technologically savvy there's not much here.
I'm no longer under 30 but I guess am close enough to it and involved enough in technology that the ideas in this book were to me of the self-evident variety. There was nothing in here that I hadn't read about before or seen in practice somewhere. It's a useful read for people curious about how business models can in fact be built on free, and a good book for people who badly misunderstand the whole "information wants to be free" slogan - Anderson does a good job communicating his ideas in an understandable way. But for the technologically savvy there's not much here.
October 24, 2014
Obviously this is written by someone who barely passed Econ 101 or Media/Marketing History core coursework for his bach's degree. Its a shame that so few journalist today have received a decent classical education in order to understand what is research, what is analysis and what is valuable literature. I almost expect to find a "free" copy of this book in the waiting room when I go in for my very costly root canal. This book tries to convince you not to fear the free. If you just came off reading Shell's Cheap as I have then thats not possible. You know that free always cost someone, just not someone you particularly care about living often on the other side of the planet. Read the Moneyless Manifesto and at least its the sort of free towards things that can have meaning like food, shelter, clothing, healthcare and education. Save your time and instead take your grandmother to the movies or treat her to dinner. At least she can share what the Great Depression was like.
p.s. And the digital copy blows.
p.s. And the digital copy blows.
October 30, 2011
Крис Андерсън описва как “Безплатното” променя света
http://www.knigolandia.info/2011/03/b...
“Безплатното не е сребърен куршум. Подаряването само по себе си няма да те направи богат. Трябва да помислиш творчески как да превърнеш репутацията и вниманието, които получаваш от безплатното, в пари. Всеки човек и всеки проект ще изисква различен отговор на това предизвикателство, а понякога нещата изобщо няма да се получат. Това е като всичко друго в живота - загадка е само защо хората обвиняват безплатното за собствената си липса на въображение и неиздръжливост на евентуален провал”.
http://www.knigolandia.info/2011/03/b...
“Безплатното не е сребърен куршум. Подаряването само по себе си няма да те направи богат. Трябва да помислиш творчески как да превърнеш репутацията и вниманието, които получаваш от безплатното, в пари. Всеки човек и всеки проект ще изисква различен отговор на това предизвикателство, а понякога нещата изобщо няма да се получат. Това е като всичко друго в живота - загадка е само защо хората обвиняват безплатното за собствената си липса на въображение и неиздръжливост на евентуален провал”.
December 23, 2020
Its is one of the most relevant books in present time as it reflects current and future style of business.
It is published in 2009 but still very significant in current times.
It is a must read and its freely available in soft format on net
It is published in 2009 but still very significant in current times.
It is a must read and its freely available in soft format on net
May 31, 2017
This was one of the most interesting books I have read in a while that makes one consider advantages in marketability. I appreciated the historical references and have enjoyed telling people about these stories, especially Jello. Definitely a must-read.
Read
September 5, 2017Loved this book. Some of the ideas may seem self-evident but taken as a whole, Anderson is pointing out some very relevant and often looked-over economics of the digital age. Highly recommend it for anyone interested in marketing.
April 29, 2011
Breezy, accessible, and generous. I came away with a truckload of new ideas and some interesting new viewpoints about Internet economics.
November 6, 2018
Free: The Future of a Radical Price is an enjoyable listen on Audible. It's a great value at the sticker price of $0.00. Chris Anderson does a great job of covering the history of free offerings to generate business. He also covers all the ways we take advantage of free services today without a second thought.
It was a fascinating take on the economics of specific business models. For a business owner, there were a few great ideas interspersed throughout the text. There were also a number of examples of how companies had used "free" services and products to their advantage, which could certainly jog entrepreneurial thinking.
My criticisms with the book are that it was overly optimistic. There were a few occasions I rolled my eyes. As someone who has lost money to piracy, I know many of the fixes Chris Anderson suggests don't always work or scale. I wish there was some mention of this in the text to dull the rose-tinted glasses.
It was a fascinating take on the economics of specific business models. For a business owner, there were a few great ideas interspersed throughout the text. There were also a number of examples of how companies had used "free" services and products to their advantage, which could certainly jog entrepreneurial thinking.
My criticisms with the book are that it was overly optimistic. There were a few occasions I rolled my eyes. As someone who has lost money to piracy, I know many of the fixes Chris Anderson suggests don't always work or scale. I wish there was some mention of this in the text to dull the rose-tinted glasses.
February 20, 2017
Great book and even a better price... Free! Chris Anderson does a great job explaining multiple ways to make money by giving away products/services for free. He does an even better job explaining the difference between giving it away and charging $0.01.
While reading this book, I came up with several ideas to give away products & services and hopefully increase market share and profits. Unfortunately, due to conventional thinking, pulling the trigger on these ideas may be tough. However, I would recommend others read this before they find themselves competing against a competitor that beats them to give away their products.
While reading this book, I came up with several ideas to give away products & services and hopefully increase market share and profits. Unfortunately, due to conventional thinking, pulling the trigger on these ideas may be tough. However, I would recommend others read this before they find themselves competing against a competitor that beats them to give away their products.
June 5, 2017
This was a pretty good book detailing a business method to increase profits; as much of an oxymoron as it seems, to increase business profits, give some products away for free (but only small amounts or some loss making products). This was obviously an example, as this audiobook was free on Audible.
That being said, this is a well known tactic so devoting an entire book to explaining it seemed pretty pointless.
That being said, this is a well known tactic so devoting an entire book to explaining it seemed pretty pointless.
February 15, 2017
Encontro-me nos laboratórios informáticos da UAB enquanto escrevo este post. Digo isto, porque pela primeira vez me apercebi que os teclados dos computadores sao diferentes dos que estou habituado a utilizar em Portugal. Por essa razão, nas palavras nao vão aparecer quais queres acentos gramaticais. Isto vai tornar a leitura um pouco difícil para aqueles que lerem este post.
A razão do mesmo é um livro que acabei de ler nos dias transactos. O autor é Chris Anderson, já conhecido por outro livro: The Long Tail.
Na obra o autor tenta demonstrar como no contexto actual a indústria do entretenimento está a migrar do mundo físico para o mundo digital. Sitio onde surgiu uma cultura diversificada e novos modelos de negócios que focam-se em vender pouco a muitos.
Neste sentido, Chris Anderson no livro que eu quero falar analisa como a internet proporcionou um novo mercado de negócios baseados no conceito mercado livre e grátis.
Recorrendo à analise de varias empresas que conseguiram fazer da norma "pouco para muitos" o seu principal método de trabalho e com isso tornarem-se grandes multinacionais, Chris Anderson aborda no seu livro o conceito da Gift Economy. A Wikipedia é um dos melhores exemplos que se pode dar sobre aquele conceito, pois foi nela que encontrei a seguinte informacao e pela qual nao tive que retribuir nada em troca, ou quase nada....
In the social sciences, a gift economy (or gift culture) is a society where valuable goods and services are regularly given without any explicit agreement for immediate or future rewards (i.e. no formal quid pro quo exists).[1] Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community. The organization of a gift economy stands in contrast to a barter economy or a market economy. Informal custom governs exchanges, rather than an explicit exchange of goods or services for money or some other commodity.
Various social theories concerning gift economies exist. Some consider the gifts to be a form of reciprocal altruism. Another interpretation is that social status is awarded in return for the gifts.[2] Consider for example, the sharing of food in some hunter-gatherer societies, where food-sharing is a safeguard against the failure of any individual's daily foraging. This custom may reflect concern for the well-being of others, it may be a form of informal insurance, or may bring with it social status or other benefits.
Um dos maiores exemplos do que é abordado por Chris Anderson, e também analisado no livro é o lancamento do álbum In Rainbows por parte da banda Radiohead em 2007. Através do seu site a banda pôs ao dispor dos interessados o download gratuito do album.
Os que quisessem, poderiam efectuar um pagamento monetário do valor que achassem apropriado. À primeira vista, a ideia que surge é que o álbum foi descarregado sem alguém alguma vez ter dado um valor monetário pelo mesmo e que a banda não teria qualquer retorno lucrativo. Contudo, e como Chris Anderson nos demonstra na sua análise, o lucro dos Radiohead manifestou-se na publicidade que obtiveram pelo acto inédito, o que pela sua vez se reflectiu na possibilidade de dar mais concertos, bem como na criação de um misticismo e feticismo pela edição do álbum na forma tradicional com uma serie de extras atractivos.
Em suma, tratou-se de uma estratégia de marketing que resultou muito bem. O que nos mostra que o gratuito é apenas uma ideia errada.
A razão do mesmo é um livro que acabei de ler nos dias transactos. O autor é Chris Anderson, já conhecido por outro livro: The Long Tail.
Na obra o autor tenta demonstrar como no contexto actual a indústria do entretenimento está a migrar do mundo físico para o mundo digital. Sitio onde surgiu uma cultura diversificada e novos modelos de negócios que focam-se em vender pouco a muitos.
Neste sentido, Chris Anderson no livro que eu quero falar analisa como a internet proporcionou um novo mercado de negócios baseados no conceito mercado livre e grátis.
Recorrendo à analise de varias empresas que conseguiram fazer da norma "pouco para muitos" o seu principal método de trabalho e com isso tornarem-se grandes multinacionais, Chris Anderson aborda no seu livro o conceito da Gift Economy. A Wikipedia é um dos melhores exemplos que se pode dar sobre aquele conceito, pois foi nela que encontrei a seguinte informacao e pela qual nao tive que retribuir nada em troca, ou quase nada....
In the social sciences, a gift economy (or gift culture) is a society where valuable goods and services are regularly given without any explicit agreement for immediate or future rewards (i.e. no formal quid pro quo exists).[1] Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community. The organization of a gift economy stands in contrast to a barter economy or a market economy. Informal custom governs exchanges, rather than an explicit exchange of goods or services for money or some other commodity.
Various social theories concerning gift economies exist. Some consider the gifts to be a form of reciprocal altruism. Another interpretation is that social status is awarded in return for the gifts.[2] Consider for example, the sharing of food in some hunter-gatherer societies, where food-sharing is a safeguard against the failure of any individual's daily foraging. This custom may reflect concern for the well-being of others, it may be a form of informal insurance, or may bring with it social status or other benefits.
Um dos maiores exemplos do que é abordado por Chris Anderson, e também analisado no livro é o lancamento do álbum In Rainbows por parte da banda Radiohead em 2007. Através do seu site a banda pôs ao dispor dos interessados o download gratuito do album.
Os que quisessem, poderiam efectuar um pagamento monetário do valor que achassem apropriado. À primeira vista, a ideia que surge é que o álbum foi descarregado sem alguém alguma vez ter dado um valor monetário pelo mesmo e que a banda não teria qualquer retorno lucrativo. Contudo, e como Chris Anderson nos demonstra na sua análise, o lucro dos Radiohead manifestou-se na publicidade que obtiveram pelo acto inédito, o que pela sua vez se reflectiu na possibilidade de dar mais concertos, bem como na criação de um misticismo e feticismo pela edição do álbum na forma tradicional com uma serie de extras atractivos.
Em suma, tratou-se de uma estratégia de marketing que resultou muito bem. O que nos mostra que o gratuito é apenas uma ideia errada.
January 7, 2022
A lot of good ideas and points made but the book is really showing its age. Hopefully Chris Anderson will release an updated edition.
May 16, 2011
Posted on my book blog.
I bought this book hoping it would help me understand a little better the economics of the internet world. There's no doubt that the internet was built around the concept of Free, but like with every other topic I'm interested in, I missed reading a systematic study about what (if anything) had changed, and how. This book does a decent job at it, but it wasn't perfect.
It gives a historical account of Free, the different meanings it can have, and how people react to it. It goes into the web world and those that have benefited from it, and those who have not, and why. It starts off well, but after a while, I felt like I was reading the same thing over and over again. It gets better again towards the end, but I struggled to keep going in the middle since not much was being added to the discussion.
Also, this felt very much like a one-sided account. Of course Free is good for many things and there is no way you can compete with it, but that doesn't mean everyone benefits from it. The author gives as an example the singer Sheryl Crow, who according to him, should be thankful more people are listening to her songs for free, because they can afterward buy tickets to her concerts and merchandise. But he never talks about movies (and other industries, but I'm using this as an example). What should the movie industry do, if everyone expects to always see movies for free? The short answer throughout the book is "find another way to make money", but that's easier said than done.
Speaking from experience with friends and the like, it's obvious people stop valuing things they get for free. A lot of people don't care about the work that goes into making a movie, or a song, or a book. Granted, a lot of people do, but what I'm getting at is, you can't just focus on the good things. Nowadays, lots of people expect others to work for free (internships, anyone?) while they themselves expect to be paid. Free isn't all that simple.
Anyway, back to the book. I expected to see bit more from the other side of the discussion, and it was repetitive, but still, a decent book on the topic.
I bought this book hoping it would help me understand a little better the economics of the internet world. There's no doubt that the internet was built around the concept of Free, but like with every other topic I'm interested in, I missed reading a systematic study about what (if anything) had changed, and how. This book does a decent job at it, but it wasn't perfect.
It gives a historical account of Free, the different meanings it can have, and how people react to it. It goes into the web world and those that have benefited from it, and those who have not, and why. It starts off well, but after a while, I felt like I was reading the same thing over and over again. It gets better again towards the end, but I struggled to keep going in the middle since not much was being added to the discussion.
Also, this felt very much like a one-sided account. Of course Free is good for many things and there is no way you can compete with it, but that doesn't mean everyone benefits from it. The author gives as an example the singer Sheryl Crow, who according to him, should be thankful more people are listening to her songs for free, because they can afterward buy tickets to her concerts and merchandise. But he never talks about movies (and other industries, but I'm using this as an example). What should the movie industry do, if everyone expects to always see movies for free? The short answer throughout the book is "find another way to make money", but that's easier said than done.
Speaking from experience with friends and the like, it's obvious people stop valuing things they get for free. A lot of people don't care about the work that goes into making a movie, or a song, or a book. Granted, a lot of people do, but what I'm getting at is, you can't just focus on the good things. Nowadays, lots of people expect others to work for free (internships, anyone?) while they themselves expect to be paid. Free isn't all that simple.
Anyway, back to the book. I expected to see bit more from the other side of the discussion, and it was repetitive, but still, a decent book on the topic.
Read
August 3, 2011The great clash documented in this book is between the atom economy, which is in the business of selling stuff, such as food, clothing, cars, CDs and the byte economy, which is the business of selling knowledge, image, access and convenience through products that have no physical presence.
As a late-stage baby boomer myself, I have had my own difficulties wrapping my brain around ways of thinking that come naturally to the generation that has never known a non-digital world. How to proceed with the kind of cause-and-effect thinking we are used to, and embrace what (to us) might be a brilliant, but non-obvious solution for monetizing something? for building a business? We oldsters see value in things made of atoms, and things made of atoms are inextricably linked to a certain overhead that we explain as "the cost of doing business." There is a certain division of labor (management, sales, administrative) that oversees the selling of atoms, and there (seemingly) are only so many acceptable models for selling them.
So it is pleasant to a materialistic rationalist such as myself to get this perspective from Anderson: "Economics has little place for morality for the same reason that evolution is unsentimental about extinction -- it describes what happens, not what SHOULD happen." In other words, there is no right or wrong way to model a business, in moral terms, just different ways to model them. The Protestant habit of equating business success with divine blessing or validation is just a sloppy habit of anthropomorphizing, and unfortunately, we can't even hope it's on Evolution's To Do list to relieve humanity of this habit, because then we fall in to the trap of ascribing value to Evolution's work and method.
Anderson adds tremendous value to this book by providing well-thought out example business models at the end.
As a late-stage baby boomer myself, I have had my own difficulties wrapping my brain around ways of thinking that come naturally to the generation that has never known a non-digital world. How to proceed with the kind of cause-and-effect thinking we are used to, and embrace what (to us) might be a brilliant, but non-obvious solution for monetizing something? for building a business? We oldsters see value in things made of atoms, and things made of atoms are inextricably linked to a certain overhead that we explain as "the cost of doing business." There is a certain division of labor (management, sales, administrative) that oversees the selling of atoms, and there (seemingly) are only so many acceptable models for selling them.
So it is pleasant to a materialistic rationalist such as myself to get this perspective from Anderson: "Economics has little place for morality for the same reason that evolution is unsentimental about extinction -- it describes what happens, not what SHOULD happen." In other words, there is no right or wrong way to model a business, in moral terms, just different ways to model them. The Protestant habit of equating business success with divine blessing or validation is just a sloppy habit of anthropomorphizing, and unfortunately, we can't even hope it's on Evolution's To Do list to relieve humanity of this habit, because then we fall in to the trap of ascribing value to Evolution's work and method.
Anderson adds tremendous value to this book by providing well-thought out example business models at the end.
July 25, 2009
I'm almost finished with the book (note: the free Kindle version seems to have a lot of typographical errors) and have highlighted some of the thought-provoking quotes. FREE: The Future of a Radical Price It's a bit stodgy and slow to read -- however, the author writes about behavorial economics as it relates to "free" and I think that big business would find this book compelling.
The currency of ideas is what most interested me in reading FREE: The Future of a Radical Price in the first place, so those portions of the book are holding the most appeal. Chris Anderson included a Thomas Jefferson quote that I love:
Only thirty-two of the Top 100 companies today make things you can hold, from aerospace and motor vehicles to chemicals and food, metal bending and heavy industry. The other sixty-eight traffic mostly in ideas, not resource processing
The currency of ideas is what most interested me in reading FREE: The Future of a Radical Price in the first place, so those portions of the book are holding the most appeal. Chris Anderson included a Thomas Jefferson quote that I love:
He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me
May 7, 2011
This book examines the free economy, focusing on the changes to business and society caused by the ease and availability of free digital services and products. For a topic that might seem like it might be dry, it's explored in a very interesting way in this book.
The book starts by discussing free products and services that have been around for a long time, such as "buy one get one free" deals at stores. The author discusses the psychology of receiving things for free -- a topic that is fascinating in its own right, and has been covered well in other books (some of which are cited here) -- and how our brains treat "free" and "non-free" in dramatically different ways, even when the absolute difference in price is negligible (as with a free product versus something that can be bought for a few cents).
The heart of the book talks about the concurrent rise of free products and services, and digital products and services. Anderson presents many examples of business built around a free model, and uses them to explore different facets of the free economy. A significant part of the discussion focuses on pirated media, and that's some of the most interesting parts of the book.
A good chunk of the book seems to target people who are considering how a free model may affect their business, but this book should be read by anyone who is interested in the way that computers have affected, and continue to affect, all of our lives.
The book starts by discussing free products and services that have been around for a long time, such as "buy one get one free" deals at stores. The author discusses the psychology of receiving things for free -- a topic that is fascinating in its own right, and has been covered well in other books (some of which are cited here) -- and how our brains treat "free" and "non-free" in dramatically different ways, even when the absolute difference in price is negligible (as with a free product versus something that can be bought for a few cents).
The heart of the book talks about the concurrent rise of free products and services, and digital products and services. Anderson presents many examples of business built around a free model, and uses them to explore different facets of the free economy. A significant part of the discussion focuses on pirated media, and that's some of the most interesting parts of the book.
A good chunk of the book seems to target people who are considering how a free model may affect their business, but this book should be read by anyone who is interested in the way that computers have affected, and continue to affect, all of our lives.
Read
August 9, 2011Ça me fascine de voir comment les idées les plus simplistes peuvent être transformées en des livres qui ont les apparences d’une recherche rigoureuse et abordant tous les aspects du problème, alors qu’ils passent 240 pages à éluder le principal aspect du problème. L’idée, ici : la gratuité. Chris Anderson, mieux connu pour une idée simple, The Long Tail, à partir de laquelle il a tissé une longue traîne de conférences et de revenus pour lui-même, tente la même chose avec Free, mais sa démonstration tombe à plat. 240 pages pour fournir un état de la situation (bien documenté, aucun doute) visant à nous convaincre que la gratuité est à l’honneur dans le numérique (avions-nous besoin d’être convaincu?) mais surtout, introduire subtilement (pas si subtilement) l’idée que tout peut être gratuit, pour autant qu’on sache s’y prendre : par exemple, tout donner gratuitement dans l’espoir que la publicité rentre, ou bien donner un produit gratis (vos chansons) pour que les gens paient pour un deuxième produit (vos concerts). Ça a marché avec Google, avec RadioHead, dit-il, alors pourquoi pas vous, et vous, et vous, et vous?
Il réussit l’exploit de ne reconnaître du bout des lèvres que dans le tout dernier paragraphe de la dernière page que, euh, non, « Free is not enough »... ce qui est tout le contraire de la direction dans laquelle il nous entraînait (subtilement...) depuis 240 pages.
Il réussit l’exploit de ne reconnaître du bout des lèvres que dans le tout dernier paragraphe de la dernière page que, euh, non, « Free is not enough »... ce qui est tout le contraire de la direction dans laquelle il nous entraînait (subtilement...) depuis 240 pages.
June 8, 2019
I feel we may be decades away from truly realizing the economic changes caused by digitization changes the way music other media as well as software, games, etc. are distributed and marketed. Even though this book is a decade old, I feel it is still insightful how Anderson from his vantage as Editor-in-Chief of Wired magazine, a position he took in 2001, sees the history and landscape. Obviously billions are being made on free (Google, etc.) and billions lost (newspapers, artists and record labels). Anderson explores the disruption, paths forward, and the psychology of the consumer confronted with these new realities.
As a matter of fact, it is that this book has held up so well when commenting on fast-changing technology largely why I ratted it so highly. One thread is about how science fiction has considered such "post-scarcity" economics philosophically:
This goes along well with how I am considering my current re-viewing of the first couple seasons of Star Trek.
As a matter of fact, it is that this book has held up so well when commenting on fast-changing technology largely why I ratted it so highly. One thread is about how science fiction has considered such "post-scarcity" economics philosophically:
Science fiction is what writer Clive Thompson calls “the last bastion of philosophical writing.” It’s a sort of simulation, Thompson says, where we change some of the basic rules and then learn more about ourselves. “How would love change if we lived to be five hundred? If you could travel back in time to reverse decisions, would you? What if you could confront, talk to, or kill God?”
This goes along well with how I am considering my current re-viewing of the first couple seasons of Star Trek.
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