The Future of a Radical Price
Chris Anderson, the editor of Wired and author of The Long Tail ( Nov/Dec 2006), presents a radical new business model for the Age of Information.
The Topic: As the costs of reproducing and transmitting digital products-music, software, writing, pictures, and videos-become cheaper, suppliers flood the market and drive prices down to nothing. How can companies remain profitable? By taking advantage of this trend, argues Anderson, they can lure consumers with promises of free goods and services while boosting income in other areas such as the sale of advertising, customer information, or upgrades and add-ons. "Free" is "an emotional hot button" that drives people to act in irrational, if somewhat predictable, ways, he explains: there's a world of difference in people's reactions between charging even one cent for something and making it free. When Monty Python released its most popular skits to YouTube, it increased DVD sales on Amazon.com by 23,000 percent. Companies that learn to exploit the public's reaction to "free" will have the advantage.
Hyperion. 274 pages. $26.99. ISBN: 9781401322908
NY Times Book Review
"Free is a successful business speech between two covers, pleasant, upbeat and full of anecdotes and bullet points. ... It's stimulating but not uncomfortably challenging." Virginia Postrel
"His advice is pithy, his tone uncompromising, and his subject matter perfectly timed for a moment when old-line content providers are desperate for answers. ... The only problem is that in the middle of laying out what he sees as the new business model of the digital age Anderson is forced to admit that one of his main case studies, YouTube, 'has so far failed to make any money for Google.'" Malcolm Gladwell
"Anderson has clearly put his finger on a pressing problem for businesses, but his one point, fleshed out with only loosely relevant digressions, is stretched a bit too thin. This leads him into increasingly utopian pronouncements about our new era of freeness." Edward King
New York Times
"After beating the drum for giveaways throughout most of his book, Mr. Anderson eventually acknowledges that his idea is in fact not viable. Such are the perils of his sloppily constructed sweeping argument." Janet Maslin
Although Chris Anderson puts forward an intriguing argument in this cheerful, optimistic book, many critics remained unconvinced. They praised his engaging writing style, his amusing examples and anecdotes, and his clear explanations of complicated concepts and technologies, but they still questioned his conclusions. In addition to Anderson's own admission that YouTube-one of his chief examples-has been a financial black hole for Google, reviewers cited their own examples of industries that seem to run counter to Free's generalizations, such as broadcast television's fiscal struggles in the face of premium cable's expansion. Though some trends seem to point in the direction of Free, the jury remains out for the present.