34 of 37 people found the following review helpful
This review is from: Free: The Future of a Radical Price: The Economics of Abundance and Why Zero Pricing Is Changing the Face of Business (Hardcover)
The author of the book, Chris Anderson, has solid credentials. He is the editor of Wired while he has previously held posts at The Economist, Nature and Science magazines. He is the author of the widely acclaimed and best selling 'The Long Tail'and was the recipient of the Loeb award for best business book in 2007.
The two books, 'The Long Tail' and 'Free' bear a family resemblance in that they are both based on the argument that rapid technological innovation has led to a paradigm shift in business model, product marketing, and cost. But unlike 'The Long Tail', 'Free' lacks an elegant underlying explanation for why some of the new models work and others do not, consequently while 'Free' is interesting is not as compelling as its illustrious sibling.
'The Long Tail' provided an illuminating perspective on the success of internet companies such as Amazon, eBay and Google. These very different companies were all exploiting the internet's capacity to open up niche markets that their rivals with physical facilities, limited precisely by the lack of physical space, could not.
The author divides the idea of Free into four subcategories:cross-subsidies e.g give away the razor, sell the blade;advertising-supported services from radio and television to websites;freemium in which a small subset of users pay for a premium version, supporting a free version for the majority;and non-monetary markets in which participants motivated by non-financial considerations develop things like open-source software and Wikipedia.
Obviously at least the first two categories are old and the author readily acknowledges that. He argues that Free is not new but it is changing. What is different, he argues, is that Free can be more widely applied in the digital era. He argues that while last century's Free was a powerful marketing method, this century's Free is an entirely new economic model.
Beyond the old-fashioned cross-subsidies and free samples, some companies have found new ways to make Free work, but there are not many of them, and the sustainability of others is unclear.
The inability of the author to shed light as to which of these new models are likely to work and which are not is, in my judgement, a flaw in the book.