Free! Why $0.00 Is the Future of Business

News Type: Opinion — Seeded on Sat Jul 4, 2009 3:42 PM EDT

Article Source: Wired News

business, free, freeconomics, costs-economy-zero-cheap

At the age of 40, King Gillette was a frustrated inventor, a bitter anticapitalist, and a salesman of cork-lined bottle caps.
[blockquote]
He blamed the evils of market competition.

Rather than spending time maintaining the blades, men could simply discard them when they became dull.

He sold millions of razors to the Army at a steep discount, hoping the habits soldiers developed at war would carry over to peacetime.

A few billion blades later, this business model is now the foundation of entire industries: Give away the cell phone, sell the monthly plan; make the videogame console cheap and sell expensive games; install fancy coffeemakers in offices at no charge so you can sell managers expensive coffee sachets.

Thanks to Gillette, the idea that you can make money by giving something away is no longer radical.
{/blockquote]

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Kokayi

The Web is all about scale, finding ways to attract the most users for centralized resources, spreading those costs over larger and larger audiences as the technology gets more and more capable.

Basic economics tells us that in a competitive market, price falls to the marginal cost.

Charge a single cent for it and you're in an entirely different business, one of clawing and scratching for every customer.

In the traditional media model, a publisher provides a product free (or nearly free) to consumers, and advertisers pay to ride along.

Radio is "free to air," and so is much of television.

This Wired article discusses and illustrates Freeconomics quite well

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#1 - Sat Jul 4, 2009 3:53 PM EDT

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Free! Why $0.00 Is the Future of Business

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