Anderson has written yet another thought-provoking book, and the title is sure to attract even casual readers. Unlike other texts that talk about free things for users, this book presents every topic in a clear context.
The book is divided into three parts: “What is Free?,” “Digital Free,” and “Freeconomics and the Free World.” These parts consist of 16 chapters and four appendices. The book starts by presenting the 2008 Monty Python experiment: the Monty Python team made their content available for free on YouTube, to blunt the efforts of unauthorized users releasing snippets. This experiment succeeded in bringing significant revenue and new admirers to their TV episodes and movies. Building on this theme of making goods and services available for free, the author points out other success stories, including Jell-O, Gillette razors, Ireland’s Ryanair, and Comcast’s digital video recorder (DVR). Anderson nicely summarizes the main thrust of the book: “While the last century’s Free was a powerful marketing method, this century’s Free is an entirely new economics model.”
Anderson lucidly shows how cross-subsidies support the theme of free items, highlighting three areas: paid products subsidizing free products; paying later subsidizing free now; and paying people subsidizing free people. In this context, Anderson highlights Fred Wilson’s term “freemium,” and then provides several examples of it, such as the free gym membership in Denmark, free conference calls in the US, Web sites such as jicka.com, and the classic free ice water that led to the success of Wall Drug in South Dakota, making it a major force in that area today.
The book then defines “free” in today’s digital economy. The author goes to great lengths to present the material in the way that young people perceive music and software. The easy-to-follow presentation explains how open-source software is free and yet provides a money stream for entrepreneurs. Anderson presents the following examples: free email, Craigslist (www.craigslist.org), Wikipedia (www.wikipedia.org), MapleStory, and Burger King’s Whopper Sacrifice Facebook application. These examples show how the “free” part leads to the “pay” part.
The book has 17 sidebar items that explain how an item or service pitched as free has a revenue source. The sidebar items include relevant data to support the arguments and, in many cases, charts to show where the break-even point lies. For example, the sidebar on free DVRs shows how Comcast reaps huge profits.
One thing that might grab a reader’s curiosity is the author’s explanation of how waste makes sense; he cites the abundance of digital storage space today. The book clearly lays out how all free things have hidden costs, and then presents ten business rules, which include: “If it’s digital, sooner or later it’s going to be free,” and “Free makes other things more valuable.”
A vast audience will enjoy the book’s clear writing style and relevant examples. The author concludes the book with a list of 50 business models that are built on the concept of “free.” There is no separate reference section at the end of the book, since all of the relevant references are incorporated in the text. It should be noted that Anderson takes the theme of “free” full circle: an abridged audiobook version is freely available on the publisher’s Web site (http://www.hyperionbooks.com/free/).
