Daniel Patricio
Rethinking how we communicate, collaborate and innovate
Chris Anderson and the Economics of the $0.00 Price Tag
In: Free
7 Jul 2009
Chris Anderson, the famed editor of Wired Magazine who is most famous for his coining of the Long Tail business strategy and most recently his proclamation of Free as the future of business, recently published Free: The Future of a Radical Price.
In an age where we have seen lawyers at the stoop of anything even smelling of free, Anderson says that free should be encouraged by the marketing team, product development and the executive board not just pirates and copyright violators.
I believe that all companies give away something free, eg. time with an account manager at a bank, customer service when you have a problem and even a sales person spending time to guide you through a decison.
In our digital world this balance is in flux. Consumers are still spending money and always will, if a product or service serves a gap or a need. The issue is what customers want to pay for is a) not being offered b) not what the companies want to sell.
When the first caveman banged on two rocks for his friends and asked for some wooly mammoth in exchange, he wasn’t selling plastic discs, he was selling music.
Music is not about selling plastic discs and today, customers don’t value plastics discs as much as they used to. Despite the resistance from the industry and their legal team, Chris Anderson, asks could free be the future price?
This doesn’t mean companies shouldn’t make money, it just needs to come from somewhere else and it might not be the model they want or have used in the past.
Anyways back to the book, it is available online – for free of course on Scribd, however I have been kind enough to post it up here for you.
Will you be reading it online or order a copy from the book store, or do you think all this talk of free is ridiculous?
- Tags: Economies of Free, Free
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About
The world around us is changing and we all are looking for the leaders to show us where this road will take us.
Ambitious and passionate in equal measure, Daniel Patricio is a digital marketing and community strategist who develops social media campaigns and consults to brands on marketing in the digital age.
He is the founder and CEO of Orange Rhino Media and founded GenY Toronto a meetup for young people in the startup, marketing and tech industries.
He has worked, consulted and advised to national and international brands in the pharmaceutical, banking, cosmetics, liquor, university and small business sectors.
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2 Responses to Chris Anderson and the Economics of the $0.00 Price Tag
Alex Ikonn
July 13th, 2009 at 2:26 am
Hey Daniel,
Yes and no is the answer to your question. The free movement is alive and well at the moment but there are of course great thinkers like Malcolm Gladwell that believe that " this a passing trend" as he mentioned in his review of Chris Anderson's book in the New Yorker. Gladwell argues that the cost of infrastructure or research is too high to make product free and even digital giants like Youtube are struggling by offering lots of free by losing a half a billion dollars in a year.
The problem with free at times is that many people don't appreciate it and simply just take advantage as the case with Youtube or those restaurants that offer pay what you think it is worth. However, the Youtube model is still young and I am confident that a profitable advertising model is in the works.
Also, I agree with you that free should be offered in junuction with other paid services. Many people might ask you on occasion why you offer so much valuable knowledge on your blog for free and one of them is definitely to add value to the community but the other is that there will also be people who still don't understand the value that you are giving away for free and will hire you (if you offer the services) to explain it or make it work for them.
My final word is that companies should definitely offer free content but still have a paid model that will keep you from having your furniture being taking away by creditors.
Alex "Free" Ikonn
danielpatricio
July 14th, 2009 at 5:37 pm
The way I view free is it is a marketing strategy not a business model.
YouTube isn't necessarily something that needs to generate revenue for Google, sure it may cost them half a billion dollars to maintain (though I have heard that number has been exaggerated) it is a drop in the bucket of the 20+ billion dollars on advertising.
Google makes money off advertising not video. YouTube is a marketing avenue for them to drive traffic to their services that bring in the revenue – people spending more time online.
It is something that I have really been thinking about lately and I was up late last night writing a follow up blog post. I will keep you posted.