Wednesday, October 28, 2009

What Is All the Fuss About Free and Why Anyone Who Is Online Should Pay Attention

If you are doing anything involving the web, most of the really good stuff is free, from basic office and business services like Gmail and Google Docs, to entertainment options like YouTube to iTunes, most of the really good stuff is free, and most of the rest of the stuff that costs money has free options that are very, very capable.

Have all the online business types lost their minds? Is this the beginning of the end of capitalism and the final triumph of socialism? Hardly.

It may be a bit hard to believe, but offering content, services, and knowledge for free has been the path to the growth of businesses associated with the Internet, and to the creation of revolutionary changes in communication, publishing, and a host of other areas.

Chris Anderson, the editor of Wired magazine and the author of The Long Tail, laid out the basic reality of this free economy in his recent book Free: The Future of a Radical Price makes the following general argument:

- The economics of the Internet allows a near zero marginal cost for distribution, so all content is getting cheaper over time.

- The concept of "There's no such thing as a free lunch" is giving way to the idea that a free lunch is not a gimmick to get you to buy something.

- If the good and useful stuff is free, you can't win on price, you have to focus on quality and relevance.

- The challenge for anyone or any business that is online is to create an audience or potential customer base with free services, content, or information, and then work to get something of value from them. While the exchange can be for money, it can also be for intangible things like reputation.

For a more detailed background on the concept of free, check out this Wired article from February 2008, Free! Why $0.00 Is the Future of Business.

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