Open Access News

News from the open access movement

Wednesday, May 21, 2008

More from Chris Anderson on the future of free

Mark Andrews, Post-modern business model: It's free, Vancouver Sun, May 14, 2008.  (Thanks to Allan Cho.)  Excerpt:

...Wired editor-in-chief Chris Anderson wrote about [ways to make money by giving away digital content] when the magazine published Free! Why $0.00 Is the Future of Business in its March issue [PS: Blogged here 2/25/08].

Anderson is the keynote speaker at next week’s Vancouver International Digital Festival (VIDFEST), where he will talk about the main point of that article, that “every industry that becomes digital eventually becomes free.” ...

Reached on the telephone in California, Anderson stressed that his Wired article, which he’s expanding into a book, applies to companies with digital products such as his old employer, The Economist, which recently lifted the restriction that its online articles were available only to paid subscribers, making it free to anyone. Most media companies, however, rely on a third-party revenue model, hoping that advertisers will pay the bills and make them turn a profit.

“No one says you can’t make money from free,” says Anderson who...[added] that microtransactions don’t work.

“They don’t work because of the penny gap,” says Anderson. “They basically have all the psychological baggage of a price, with very little monetary advantage. If [an item] is one cent, then you have to go through all the questions — ‘Should I buy? Is it worth it? How should I pay for it? Is it safe?’ Zero cents takes all that off the table.” ...

“Any product or service that becomes digital will become free,” says Anderson. “That’s not to say that your product will become free, but you will compete with free. That means you need to find a way to justify charging for something that people can get for free.”