Chris Anderson tries to tally the free economy, counting the money made from advertising, “buy one, get one free” gimmicks, and free services subsidizes by paying customers (like Flickr or MYSQL). The numbers are huge, talking hundred of billions of dollars in each category, if not trillions. Anderson’s point is that free has been a business tool for a long time, using infinite goods like TV shows or loss leaders to sell more valuable scares goods. Companies used to charging large amounts for their goods, like music and movie companies, are finding it hard to understand the free economy and how much money can be made there.
Anderson is promoting his new book, “Free” about leveraging free as a business model and I’m hoping he leads by example, proving the point of his book through his own leadership. “Free” isn’t due in stores until next year when I hope the book is sold extremely cheaply, subsidized by Anderson’s certain to follow speaking tour. The promotion from the book would make Anderson a more sought after and thus highly paid speaker (time is a scare good). Books have a higher marginal cost – the cost of printing, paper, binding, etc. – so some price for production might be need.
Anderson could also release digital copies of the book (and audio) for free online. Matt Mason is doing just that (at least in book form) with his book “The Pirate’s Dilemma” about how file-sharing helps businesses make more money.
To further prove his point, Anderson could release his four year old book “The Long Tail” online for free (and lower the price on those $30 audio book copies).
This is a man trying to change the way companies think about business and the concept of free. I really hope he thinks about it himself.