Book Review: Free: The Past and Future of a Radical Price

 Free: The Past and Future of a Radical Price by Chris Anderson

This book takes a look at how free, free as in beer not as in speech, is being used by businesses to make money.  What might quickly come to mind when hearing the premise of the book is that companies have been giving away free sample products all the time, what is the big deal then and why a book?

The short answer is that Free comes in many different versions and some companies have done remarkable well giving away products.  Think Google search as the most immediate example.  Another theme that crops up in the work is that the net generation has come to expect free for most of the web services they use on a daily basis.  There is also the obligatory discussion of Open Source Software and music piracy.  

The idea that interested me the most in reading this was the notion of marginal cost in software: When producing physical goods it takes material and labour to create one more additional unit of output.  In software the cost of creating one more instance of your product is negligible and not worth counting.  A corollary to this theory is that the cost of every software or web service will tend toward zero as time progresses.  Once the initial costs of creating the first copy have been paid for, that is.  That would make software abundant since it's value never appreciates.  Unlike old books let's say, that for the most part are hard to find and increase in value once they get older and become rare.  Rareness in software, if such an idea exists, is an artificially created condition.   Ergo the price of software shouldn't go up.  Ok, bit of a stretch but that is the conclusion that I get out of it.  Software seems to be mostly immune to traditional economic theory because it doesn't behave like other mass produced goods, opening the door to such off the wall pricing strategies as free.

Worth reading, or if time is short the section "Digital Free" covers most of the bases.