Freeconomics

The March issue of Wired is free! At least, the first 10.000 people who live in the US can get the magazine sent to them for nothing. The issue features an article by Chris Anderson about the 'free' economy. Why are all these great services on the web free? Low distribution and sunk fixed costs make it possible to offer e.g. free basic services to many people while a small part of your users pay for the premium version. The article states that in the future, getting a free version will be the standard and it will change the way you look at (and chose) service providers. Interesting enough, almost at the same time, Miikka Leinonen published his book 'the Strategy of Giving' that explains his thoughts why companies should think about giving things away for free (the e-book is of course also available for free). He explains that with giving, there's always some kind of reaction at the side of the receiver. His perception changes or his buying attitude if he is alerted to the premium services of the company. And if there's one quote I will never forget from a sales-guru 'People hate to be sold to, but they love to buy!'. So, free is not really free: in this digital age, attention and 'spreading the news' is sometimes just more valuable than earning money right away. Shapiro and Varian wrote the classic book 'Information Rules' to explain the new economic principles for digital products. One of the reactions to Anderson's article just expresses it really well, '21st century capitalism is plain weird.' Amen!