Wednesday, February 27, 2008
Beware of Freeconomics - The Dangers of Free
A few weeks ago ReadWriteWeb published a piece on this blog entitled The Danger of Free, in which we discussed the rise of free - a marketing strategy where digital products are given away. This month's issue of Wired magazine features a cover story on the topic by editor-in-chief Chris Anderson. The article is a preview of his forthcoming book, called (you guessed it) Free. However in this post we look at two issues that make this new economic model rather worrisome: monopolistic markets and complex transactions.Chris and other advocates of freeconomics argue that with costs of digital products rapidly dropping, it is best to give them away for free. This ensures customer commitment, because people would much rather get stuff for free than pay even a penny for it. Chris cites examples like free web mail, free DVR, free 411 and even $20 airline tickets (not quite free, but getting close) as evidences of the emergence of freeconomics.
While it is true that people like free stuff and it is true that large companies can afford to give away stuff for free, what is not clear yet is whether freeconomics is a good thing.
Read the full article at ReadWriteWebPosted by Nick HaC @ 4:58 PM
