Free v Freemium v Freeconomics

 | 
author/source: Miles Galliford


Free v Freemium v Freeconomics


The launch of Chris Anderson’s excellent new book “Free: The Future of a Radical Price” (US edition) (UK edition) has livened up the debate about how content owners and online service providers make money. Everyone involved with products, content or services that can be delivered from the creator/producer to the user/customer digitally over the Internet should read this book.

Anderson’s argument goes that free has played a big part in business ever since commerce began. Commercial TV and radio stations provide programming for free to consumers and sell the audience to advertisers; retailers offer ‘buy-one-get-one-free’; cell phone companies’ give away free phones in exchange for a 12 month contract, and so on.

However he argues that in all these situations there is a real cost to what is being given away and someone in the chain ends up picking up the bill. The Internet has radically changed the phenomena of free because it provides zero cost global distribution of everything digital. This means:

  • There is unlimited free digital shelf space
  • Each additional copy costs nothing to produce
  • Digital versions are easy to copy and share
  • Global distribution is free and frictionless

Andersen believes this means all digital products and services will, sooner or later, be free . . . and there is nothing you or anyone else can do to stop this trend. This has massive implications to dozens of industries including record companies, publishers, software writers, authors, newspapers, web service owners and many more.

However the book argues that just because something is free it does not mean it cannot make money. For example a musician can give all his songs away but make money from merchandise and gigs; an author can give his books away but make money from consulting, endorsements and public speaking; Google can give all their services away but make money from advertising.

I agree with a lot of what is in the book, but I think the market for digital products and services is more complex than is portrayed. Here are some reviews, views and comments from some of the press and leading bloggers. Unsurprisingly most professional journalists from large newspapers disagree with the key points. Maybe that is why the publishing industry is in such a mess?

This is an interesting and important debate for anyone involved with digital content.