Free: The New Business Model

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Chris Anderson, the editor of Wired, has a new book out that’s getting mucho attention: Free: The Future of a Radical Price. Anderson argues that in the digital age, more and more businesses should and will offer their goods completely for free (to the delight of cheapskates everywhere). Free is not gimmick to entice customers to try something new. Free is a business model. And it can work.

Rather than charging for their product—and often, Anderson is talking about information and content, a la MP3s and newspaper stories—businesses should get on the free bandwagon and figure out other ways of turning a profit. Online ads are one revenue stream, of course. Musicians should capitalize on the added exposure they might get when people download their songs for free.

Does this work in the long run? For some businesses, probably. See: Wikipedia, Google, YouTube. For many others, no way. It’s interesting to note that for months Anderson’s own magazine, Wired, has been rumored to be the next to cease existing, at least as a print publication. He hasn’t figured out a way to give that away for free. At the same time, some print pubs are taking the anti-free path; USA Today, for instance, is launching a paid-for e-edition in August.

Check out interesting reviews of Anderson’s book at the Boston Globe, another newspaper struggling to make ends meet in today’s free-content world, and via Malcolm Gladwell at the New Yorker. No charge for linking you to these stories.