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Free! Why $0.00 Is the Future of Business: “Over the past decade, however, a different sort of free has emerged. The new model is based not on cross-subsidies — the shifting of costs from one product to another — but on the fact that the cost of products themselves is falling fast. It’s as if the price of steel had dropped so close to zero that King Gillette could give away both razor and blade, and make his money on something else entirely. (Shaving cream?)
You know this freaky land of free as the Web.”
I wanted to like this article – it deals with concepts that many of us experience in our daily lives such as the reduced of cost for computing and online participation. But several aspects of the article don’t resonate with me. Software and content are free on the surface. What has happened, however, is not a full scale revolution as Anderson suggests (he is, after all, ramping up for publication of another book, so attendant hype and jargon are to be expected). Instead, the value point of content has shifted. Google is definitely not a company built on freedom, openness, running through meadows holding hands, etc. Google is very much concerned with selling and revenue. To compete, however, it has been forced to adopt a different model than what Microsoft was built on. It has managed, however, to adopt the television model – free for users but sponsors/advertisers pay. Facebook is now in a similar position – they need a revenue stream as there current valuation is based on potential, not reality. When generic content is free, then we pay for other things – such as high quality content or first access (such as movies). While certain examples of free-simply-because-it’s-right exist (wikipedia and emerging discussion of P2P and gift-based economies), it is certainly not the norm. Just because something is free on one end of the value continuum does not mean it is no longer to be found on the continuum at all.